India and Nepal officially opened South Asia’s first cross-border oil pipeline on Tuesday, a project seen as part of New Delhi’s efforts to increase its influence in the Himalayan nation where China is also making deep inroads. Indian Prime Minister Narendra Modi and his Nepal counterpart KP Sharma Oli joined the inauguration ceremony by video link from their respective capitals. India funded the 3.24 billion rupee (US$45 million) pipeline project, which has an annual capacity of two million metric tonnes and will enable Nepal to import fuel from India at a lower cost. India is Nepal’s sole supplier of oil, which is currently carried on tankers via road to the landlocked country. How India’s neglect drives Nepal into China’s outstretched arms The 69km pipeline, built by state-owned Indian Oil Corporation (IOC) in cooperation with Nepal Oil Corporation, was completed 15 months ahead of schedule, officials said. “This is a matter of satisfaction that South Asia’s first cross-border petroleum pipeline has been completed in record time. This has been completed in about half of the expected time,” Modi said. The pipeline will supply oil from Motihari in the eastern Indian state of Bihar to Amlekhgunj in Nepal. Traditionally India has been slow to implement projects despite ambitious plans, and has often faced criticism from politicians in Nepal for what they see as meddling by their much bigger neighbour. However, the implementation of India-funded projects in Nepal gained momentum following talks between Modi and Oli last year, officials said. The Himalayan republic is a natural buffer between India and China, which is also pouring aid and investment into Nepali hospitals, roads and hydroelectric plants. India and Nepal, which share a 1,751km border, have close religious and cultural bonds and tens of thousands of Nepalis work in India. The pipeline is the “best example of connectivity in the field of trade and transit … between Nepal and India,” Oli, flanked by his cabinet ministers, said in a televised video address. Oli said Nepal’s government had cut the cost of petrol by about two US cents a litre from Tuesday to benefit consumers as the pipeline would cut oil transport costs. “It will not only save time, reduce cost, lessen road traffic and reduce air pollution in transporting petroleum products from India to Nepal, but will also open avenues in Nepal for expanding similar pipelines across the country,” Oli said. Nepal consumes about 2.66 million tonnes of oil and about 480,000 tonnes of cooking gas, currently carried in trucks from half a dozen Indian depots to different points in Nepal. The pipeline will save Nepal about $8.7 million a year in transport costs for fuel, Birendra Goit, a spokesman for Nepal Oil Corporation, said. Did Nepal snub India for China with military drill decision? Tanker trucks have been used to transport the oil products from storage facilities in India to Nepal through crowded border points. The trucks are believed to be one of the main reasons for clogging up the already narrow border check points between Nepal and India. Disturbances in the border area have in the past led to disruptions of the supply. Ethnic protests in southern Nepal in 2015 against the country’s new constitution led to the closure of the border for months, leading to severe shortages of oil in Nepal. Oil tankers were not allowed to pass through the border points and motorways in southern Nepal were blocked by protesters demanding changes in the constitution. Nepal restores US$2.5 billion hydropower plant contract to Chinese firm People were forced to travel on bus roofs and cut down trees to cook food, and schools were forced to shut. It was also at the time when Nepal was just recovering from a devastating earthquake that damaged an estimated one million structures and people were trying to rebuild their homes. The protest and the closure of the border by the Madhesi ethnic group also put a strain on relations between Nepal and India, which supported the ethnic group. The protests fizzled out after a few months, but it took years for the two countries to mend their ties.