India & Nepal: China Lurks But Here Is How We Can Deal With It

Nepal, India indeed have a ‘roti-beti ka rishta’. But tiny Nepal is also determined to maintain strategic autonomy.

Neighbouring nations seldom enjoy trouble-free ties, regardless of their overarching commonalities. Nepal’s 18th century founder, King Prithvi Narayan Shah, had colourfully described his nation as a ‘yam between two boulders’.

King Mahendra (1956-72) had observed: “The one single factor that is permanent in Indo-Nepal relations is geographical contiguity and cultural oneness.”

Nepal and India indeed have a ‘roti-beti ka rishta’. Tiny Nepal is also a proud nation determined to maintain its strategic autonomy.

It feels discomfited at its over dependence on India and complains of being ‘India locked’.

India, on the other hand sees Nepal as a buffer, and desires a friendly government there. As such, there are some differences in the manner in which the neighbours perceive each other.

India-Nepal Ties, As We Know It

Nepal did conclude a bilateral Treaty of Peace and Friendship with India in 1950, under which both sides pledged to extend national treatment to each other’s citizens. It was further agreed that, Nepal would be free to import – from or through India – arms, ammunition or warlike material, necessary for its security. However, in practice Nepal has derived the benefits of the 1950 Treaty, without assuming reciprocal obligations, and yet maintained that the Treaty is unfair. She has periodically sought its revision.

Nepal established diplomatic ties with China in 1955 and also signed a Peace and Friendship Treaty during Premier Zhou’s visit in 1960. 

Earlier, it had concluded a bilateral boundary agreement. Premier Zhou described Nepal-China relations as ‘blood-ties’. Not too subtly, Foreign Minister Marshal Chen Yi often stated: “China will side with Nepal in case of any foolhardy attempt to attack Nepal by foreign army.”

What Has China Got To Gain Out Of Friendship With Nepal?

Other than befriending India’s immediate neighbours, China’s main objective in cultivating Nepal is to ensure that they are on the same page on Tibet. Before its occupation by China in 1950, Nepal had maintained close relations with Tibet, and had almost no ties with China.

Tibetans fleeing to India often use Nepal as a transit point. Under Chinese pressure, Nepal has been turning them back, even though they are certain to be persecuted by Chinese authorities. Earlier this month, Nepal forced the Tibetan community to cancel a public celebration of the Dalai Lama’s birthday by withholding clearance, on ‘security’ grounds.

India & Nepal’s Deep-Rooted Connection

All the same, India has remained Nepal’s biggest developmental and trade partner, as well as principal security provider. Some 8 million Nepalis live and work in India, comprising one fourth of its total population. The valiant Nepali Gorkha soldiers are an integral part of the proud legacy of the Indian Army.

50,000 Nepalis continue to serve in the Indian armed and para-military forces. Over 126,000 Gorkha pensioners reside in Nepal. India remains committed to their welfare.

Nepal also sources its POL (petrol, oil and lubricants) and power requirements from India. It is ironical that it faces widespread power shortages, despite being blessed with a commercially feasible hydropower potential of 42,000 MW.

Its present installed capacity is just 1100 MW. Numerous initiatives have been taken by India over the preceding decades, to build hydroelectric power plants, virtually at no cost to Nepal. However, an inbred suspicion of India and short-sighted politics have successfully scuttled Indian efforts.

Is Only Nepal To Blame?

A large section of the political elite is averse to sharing hydropower generated from Nepalese waters with India. That it has been going waste over millennia or that Nepal has remained trapped in poverty, is of little consequence to them. Just the Pancheshwar multi-purpose dam project for example, agreed upon in 1996 and designed to generate 4,800 MW of electricity annually, could have transformed the country’s fortunes.

On the other hand, Bhutan which has been engaging constructively with India, has succeeded in registering a higher per capita income (PCI) than its partner. In 2017, the PCI of Bhutan, India and Nepal was USD 2,870, USD1,850 and USD 866 respectively.

So, is only Nepal to blame? Not at all. Truth be told, Nepali leaders have generally been insecure, and in modern times they never failed to play the China card against New Delhi.

India on the other hand has sometimes been prescriptive, meddlesome and heavy-handed, accentuating the Nepalese sense of vulnerability and suspicion.

Nepal’s Neutrality During 1962 Sino-Indian War

Former Foreign Secretary MK Rasgotra recalls in his memoirs, that Prime Minister Indira Gandhi, told him before he took office as Ambassador in Kathmandu in 1973, not to trust ‘Nepal’s rulers’, who said one thing and did the opposite’.

India duly noted Nepal’s neutrality during the 1962 conflict with China (and the Doklam standoff in 2017).

Next, King Birendra crossed India’s security redline by importing anti-aircraft guns in August 1988 from China and sending its military personnel there for training. Livid, India imposed an economic blockade that caused unprecedented hardship to Nepal.

Normalcy was restored in 1990, but the trust gulf had widened. Nepal has often accused India of trying to destabilise governments not to its liking.

On the other hand, China worked closely with the monarchy till it lasted, and next with the party in power. It used its economic clout effectively to gain the favour of Nepali decision makers. It also did much better than India in speedily implementing developmental projects.

“If Nepal enhances its relations with China in the areas of trade and connectivity, rail, roads and air, then how come it is a disadvantage to India?” One should not consider Nepal as its satellite, cautioned former PM Madhav Nepal. It is a fact that Nepal has encountered trade and transit difficulties at Indian ports, especially Kolkata. Naturally Kathmandu has been exploring alternatives.

Can India & China Work Together in Nepal?

In the aftermath of the ill-advised 2015 blockade on the entry of Indian products into Nepal by the Madhesis in Terai, to press for their political rights that India condoned, China senses an opportunity.

In 2016, a trade and transit treaty was concluded, which grants Nepal access to four Chinese ports. 

They further agreed to speed up a feasibility study on FTA.

China is now planning a railway link to Kathmandu from Lhasa, that could be operational within 5-7 years, and provide Nepal access to Chinese sea ports, even if not economically viable. In June 2018, Nepal formally joined the Chinese BRI (Belt and Road Initiative), signing agreements worth USD 2.4 billion for infrastructure development.

S Jaishankar (now External Affairs Minister) had inter alia written (Economic Times, August 2018) – “Chinese power is a fact of life….Our footprints will overlap in South Asia and beyond, and India would be judged by the quality of its delivery… This requires India…to invest generously and non-reciprocally in the growth of its neighbours…Investing in South Asian connectivity is today the smartest move we can make.”

The big question remains if India can walk the talk. We need to take the lead in rebuilding trust. 

We should forthwith agree to revise or scrap the 1950 Treaty if Nepal so prefers. Given her size and capabilities, India will do well to make few demands of its neighbours, except where it pertains to her legitimate security concerns.

Can India and China work together in Nepal, for example, by undertaking joint hydropower projects? It is hoped that Indian diplomacy has the nimbleness to evolve with the times.

(The writer is a former High Commissioner to Canada, Ambassador to South Korea and Official Spokesperson of the Ministry of External Affairs. He can be reached at @AmbVPrakash. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)