Indo-Nepal Trade Relations- A Historical Analysis of Nepal's Trade with the British India

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Indo-Nepal Trade Relations celebrates the Nepalese struggle against the British Raj's callous moves of suppression and subjugation. It is a first comprehensive Nepalese attempt to explore the economic implications of the dark pages of Nepal's history of trade with British India. Analytically examining the major aspects of Indo-Nepal trade relations, Dr. Upadhyaya, explores the mood of suspicion that shaped Nepalese attitude towards the British India. The British Govt., explains Dr. Upadhyaya, was interested not just in Indo-Nepal trade but also secretly plotted to capture its supremacy over the Tibetan trade through Nepal. But the Nepalese resistance to the imperialist British moves sprang from the fact that commercial activities of the British Raj had ultimately established their colonial rule in India.

A detailed analysis of the means of transport and communication, different trade routes and variety of commodities that passed through them provide a measure of growth that Indo-Nepal trade witnessed. Nepal enjoyed a favourable balance of trade on account of large exports.

Dr. Upadhyaya largely focuses on the major issues of economic history such as commercial policies and monopolies volumes and exchange of commodities, commercial taxes, currency, market and prices of commodities, system of barter and credit and payment of debt.

The book is a must for economists, historians, policy-makers and scholars interested in knowing the history of Nepalese resistance against Imperialism.

The present thesis seeks to analyse the nature and extent of Indo-Nepal trade relations during 1858-1914 and to explain the causes of its fluctuations from time to time. The political and cultural relations between the two countries have been covered in numerous books by foreign and Nepalese scholars. But economic and trade relations have not received adequate attention from historians. This study is a modest attempt to fill this gap during a major part of the long Rana regime, when the pattern of Nepal's commercial relations with British India underwent a significant change. I have tried here to indicate the process of this change and analyse the circumstances under which it took place.

In his book titled Indo-Nepal Trade in the Nineteenth Century Dr Jahar Sen has discussed some aspects of Indo-Nepal trade. It is the first attempt in this field. In it he has not dealt with some of the most important aspects of Indo-Nepal trade, such as commercial policies, rates of customs duties, taxes, transaction of commodities, smuggling, growth of market and trade centres and the impact of this trade on Nepal. The major thrust of Dr Sen's work is British interest in Nepal. Consequently his treatment of Indo-Nepal trade remains lopsided. Another limitation of his work stems from his inability to have access to the documents of the Foreign and Finance Ministries of Nepal which are a rich source of information.

Political and diplomatic aspects of Indo-Nepal relations have been dealt with in numerous monographs. I have therefore only briefly touched on such political and diplomatic aspects as had some bearing on the commercial contacts between the two countries. The main area of my investigation has throughout remained trade and commerce between the two countries. As far as possible I have tried to check and correlate evidence culled from the National Archives of India with that from Nepalese sources. Reports on Indo-Nepal trade published by Regmi Research Centre, Kathmandu, the Bengal and North Western Provinces Governments and the Gazetteers edited by W.W. Hunter and P.C. Roychaudhury are extremely useful and I have used them extensively. Sifting and selecting documents and private papers kept in the record section of the Foreign Ministry of Nepal and the Charkhal Adda record section and Kaushitosakhana under the Ministry of Finance in Nepal took a lot of my time because no catalogue or index has been prepared for consulting them for research purposes. Apart from official records and private papers, newspapers and journals in Nepali and English have helped me considerably in understanding Indo-Nepal trade relations properly, and in reconstructing its history during the period under study.

I have had to face numerous difficulties in collecting relevant materials, which are neither classified nor kept systematically and properly in the Nepalese Ministries. But even more difficult was to get permission for access to the documents available in the Foreign Ministry of Nepal.

The British occupation of India was a classical example of imperialism gradually spreading its tentacles over the entire life of an ancient, culture. Beginning as a trading company in the era of mercantilism, the British dragged India through the period of industrial capitalism and ultimately converted it into the exporter of raw materials and importer of finished goods in the age of finance capitalism.

It was this colonial India whose trade relations with Nepal (1858-1914) Dr Upadhyaya proposes to examine in this book. Secure in their mountainous vastness, extremely proud of their freedom in their land-locked country, the Nepalese were very suspicious of the motives of the British. They had already had a foretaste of British diplomacy and armed might in 1816. They had also perceived how India had been pulverised in course of the preceding hundred years morally as well as materially. They had seen the Nepalese proverb- The tradesman brings the Bible, the Bible brings the bayonet'-fully exemplified in India. So there was in this respect remarkable continuity and consistency in the attitude of the Rana Prime Ministers that they were always suspicious of British motives. Aware of the Indian precedent, they were extremely reluctant to allow the free entry of colonial Indian traders into Nepal. The Nepalese Government never permitted the penetration of British capital and enterprise in Nepal. Even commercial activities were to remain within specified limits prescribed through mutual agreements arrived at from time to time between the contracting parties.

To keep trade within reasonable limits, the Nepalese Government pursued a carefully worked out policy of monopolies especially in case of timber which covered a sizable percentage of Nepalese exports. This policy was also favoured because of the high profits derived from the lucrative Indo-Nepalese trade in which senior civil and military officers of Nepal were engaged. Rulers sold monopoly rights to merchants who remitted a share of their profit to the Prime Minister. Monopoly also served to divert the attention of the elite (Sardars, notables, officers intellectuals, etc.) from politics to commerce, which brought them handsome profits. Apprehensive of political and territorial designs characteristic of British imperialism, the rulers of Nepal refused to be beguiled by the prospects of material prosperity dangled before them by the colonialists.

The writer has made an in-depth study of the commercial transactions between Nepal and British India round which political and cultural relations between the two revolved. Fluctuations in trade relations were there from time to time, but these ups and downs were not always due to economic and commercial causes; often non-commercial factors interceded to alter its pattern and the commodities involved in transactions between the two countries. There were fluctuations due to the changing politics and attitudes of the governments of the two countries, particularly in the case of the Nepalese Prime Ministers. Their attitude towards this trade reflected change rather than continuity. The Prime Ministers were often dictated by the motives of personal gains and occasionally by their whims and caprices.