Nepal’s policymakers are used to a delicate balancing act. But the constant maintenance of equilibrium between Chinese and Indian interests keep it from forging a stronger relationship with either country. A guest post by Arthur de Liedekerke.
In a new level of bilateral engagement, Nepal and China have announced they will hold their first-ever joint military drills, a move which is perceived as “unconventional and alarming” according to a senior Indian defence analyst speaking to The Hindu.
Sandwiched between China and India, Nepal has often found itself at the heart of the Sino-Indian geopolitical rivalry. And unfortunately for Nepal, you can choose your friends but not your neighbours. In the words of the 18th-century king who unified the country, Prithvi Narayan Shah, it’s situation is comparable to that of “a yam between two boulders”.
Historical context
India perceives Nepal as belonging to its traditional sphere of influence. Bound by history, cultural and socio-economic linkages and a long and open border, these two countries share a unique, albeit complicated, bond.
On the other hand, the Himalayan nation has become a “major concern of China.” Its vast water resources and Beijing’s regional ambitions are part of the reason. China is also intent on ensuring Nepal does not become a rear base for Tibetans in exile argues Shyam K.C, Research and Development Director of the Asian Institute of Diplomacy and International Relations (AIDIA).
India, for historical reasons, has played the larger role in domestic Nepalese politics. But in recent years, plagued by sticking points such as the ‘Madhesi issue’ (a minority group living in southern Nepal with close ties to India) and persistent accusations of Indian interference in Nepal’s domestic politics, this special relationship has thawed.
China has seized on this opportunity to ramp up its diplomatic seduction: aid packages have poured in and trade agreements have flourished. In exchange, it has secured political support for its ‘One China’ policy and greater cooperation on limiting the flow of Tibetans attempting to cross the Nepalese border into India (where the Dalai Lama is based).
The complex reality with which Nepal must contend is reflected in its foreign policy. Kathmandu’s traditional and official stance has been one of maintaining “equidistance” in its relations with both neighbours — equally close or equally distant. In practice however, it appears to be a perpetual balancing act, swinging back and forth between alignments with India or China.
Chinese investment
The election of Nepal’s new prime minister, Pushpa Kamal Dahal (also known as Prachanda), in August 2016 irked the Chinese. Perceived as more pragmatic than his China-friendly predecessor K. P. Oli, Prachanda’s first trip abroad was to New Delhi in September 2016. This did little to assuage the Chinese concerns of India increasing its clout at their expense. As a result, Chinese state media released a number of strongly worded op-eds against Nepal and a string of bilateral projects in Nepal, such as the Gautam Buddha International Airport in Lumbini, were rumoured to be put on hold.
Unhappy at the prospect of Pranab Mukherjee’s visit to Nepal — the first by an Indian president in 18 years — Chinese President Xi Jinping postponed his planned trip to Nepal in October 2016. A few months later, wielding the proverbial carrot as well as the stick, Beijing pledged Rs 15.80 billion (roughly $250 million) to Nepal for post-quake reconstruction activities.
The opposite is equally true. Any suspicion of a pro-China tilt in Nepal’s political establishment triggers a strong Indian reaction. In late 2015 India, wary of developments surrounding the adoption of a new Nepalese constitution, supported a Madhesi-enforced economic blockade of Nepal’s southern border. This led to a major disruption in supply routes and sparked a fuel shortage in the country.
Capitalising on the subsequent surge in anti-Indian sentiment, China hurriedly stepped in to offer Nepal a petroleum supply deal. India has since decided to counteract: on Monday March 28, 2017, state-owned India Oil Corporation signed an agreement with Nepal Oil Corporation to supply 1.3 million tonnes a year of refined fuels to Nepal and to help extend the Amlekhgunj-Raxaul pipeline.
Similarly the visit of Chinese Defence Minister, Chang Wanquan — the first Defence Minister to visit Nepal in 16 years — on March 23 to discuss China’s ‘One Belt, One Road’ initiative worried India. It hardly appears to be a coincidence that the Indian Army Chief, General Bipin Rawat, arrived in Kathmandu on March 28, hot on the heels of his Chinese counterpart.
Stuck between a rock and a hard place
Beyond the politics, however, the conflicting agenda of Beijing and Delhi often have very tangible economic consequences for Nepal. India and China calibrate their economic assistance and investments in the country according to realpolitik considerations, making Nepal’s economy hostage to the dynamics of Sino-Indian competition. Should Nepal loose its strategic interest for either or both of these actors due to, for instance, persistent political instability, this would be a “real tragedy for the country” in the words of Dr. Nischal Pandey, Director of the Centre for South Asian Studies.
Economically dependent on India for most of its fuel, food and medicinal supplies, landlocked Nepal is highly vulnerable to any upset in this bilateral relationship. Although it has attempted to reduce this reliance in the past couple of years by using China as a bargaining chip, the “China card” has shown its limits in terms of trade and transportation given the difficult geographical terrain.
The incumbent Nepalese administration has been at pains to downplay this black and white scenario and repeatedly insisted it wishes to play the role of a “dynamic bridge” between its larger neighbours in order to foster further “tri-party understanding” in a kind of win-win-win configuration. Dr. Pandey, suggests that “if it is unlikely that small pieces in the chessboard will influence the overall posturing of India and China,” countries like Nepal could set the stage for further “India-China cooperation” and benefit from “cross-border connectivity, trade, transit, and investment”.
But if cordial relations with both its northern and southern partner are undoubtedly desirable, it constricts the country’s ability to pursue truly ambitious partnerships with either China or India at the risk of disrupting this fragile equilibrium. As former Brigadier General of the Nepal Army Umesh K. Bhattarai explains in The Himalayan Times, “where Nepal wants to incline for its betterment is a burning question.”
Arthur de Liedekerke works at the European Parliament. He writes in his capacity as an external analyst for the Global Governance Institute, a Brussels-based think-tank. He has previously collaborated with outlets such as The Diplomat, Politico, and New Eastern Europe.
