Nepal seeks balance as China and India jockey for clout

Neeta Lal says the new prime minister’s choice of Delhi as his first foreign destination is as much an expression of seeking to reset ties with India as a message to China

PUBLISHED : Monday, 19 September, 2016, 4:30pm
UPDATED : Tuesday, 10 October, 2017, 1:14pm

Pushpa Kamal Dahal’s four-day visit to India – his first since taking over as Nepal’s prime minister for the second time – is as much about resetting ties with New Delhi as about sending out a message to Beijing. A landlocked country, with borders fringing both India and China, Nepal holds a shaky balance between its two giant neighbours.

[Dahal’s] choice of India as the first port of call is an indication that Nepal has not (yet) waltzed into China’s orbit

India has traditionally considered Nepal a natural ally, based on cultural and historical affinities and a long open border. India is also Nepal’s biggest trade partner, and donor and supplier of essential goods and energy. With Beijing, Nepal’s collaboration is relatively recent, premised on China’s larger plan to expand its influence across South Asia.

Speculation was rife in the run-up to the visit by Dahal, also known as Prachanda, that he might visit China ahead of India. But his choice of India as the first port of call is an indication that Nepal has not (yet) waltzed into China’s orbit, and recognises India’s “special interest” in it. But an astute Prachanda also sent a special envoy to Beijing to soothe its anxieties over lacklustre progress of projects connecting China and Nepal to reduce dependence on India.

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It is believed that President Xi Jinping (習近平) is irked by Nepal’s lack of enthusiasm for his signature “One Belt, One Road” initiative to build infrastructure and establish new trade routes across the region.

Even so, with its frenetic infrastructure building across Nepal, China has managed to gain a foothold in Kathmandu. The two sides inked a deal to extend the Tibet rail network to Kathmandu, create special economic zones for Chinese firms and seal a long-term agreement for petroleum imports.

These have left Delhi rattled as its own long-standing proposals for hydroelectric plants and trade and transit corridors in Nepal remain bottlenecked by bureaucracy.

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India–Nepal ties had been tense during the previous administration of Nepali prime minister K.P Oli, who liked playing the China card to capitalise on Delhi’s insecurities. Prachanda, however, is keen to recreate an environment of trust. Delhi is also working on a series of projects with Kathmandu, including an east-west rail link and another hydropower plant that may be built with Indian grant aid. Prachanda and Indian Prime Minister Narendra Modi have also pledged to “not allow” their territories to be used against each other and to set up an oversight mechanism to review progress of economic and development projects.

To what extent India and China will succeed in limiting each other’s influence in Nepal only time will tell. But with both jockeying for more clout in the tiny Himalayan nation, riveting geopolitical theatre is guaranteed.

Neeta Lal is a Delhi-based editor and senior journalist