Nepal Between China and India

By Ankit Panda

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Tika P. Dhakal discusses Nepal’s geopolitical circumstances between India and China.

In October 2019, President Xi Jinping became the first Chinese leader to visit Nepal. Relations between China and the Himalayan state have been quickly advancing in recent years amid growing concerns in India and elsewhere that Kathmandu is decisively pivoting toward Beijing. Xi’s visit elevated ties between the two countries a “strategic partnership of cooperation.” To probe Nepal’s geopolitical circumstances between its two giant neighbors, The Diplomat’s senior editor, Ankit Panda, spoke to Tika P. Dhakal, a foreign affairs commentator from Nepal. Apart from writing regular column in Kantipur Daily, Dhakal engages with regional think tanks and the strategic affairs community.

The Diplomat: Has Nepal started an irreversible geopolitical shift away from India, or is this perception exaggerated?

Tika P. Dhakal: Your question partially points to the right direction in both its parts. Nepal today is making every effort to open up more connectivity links with China. The 2016 agreement on expanding trade and transit network with China, on Nepal’s part, was an expression of intent for the diversification of dependence on India. The slew of agreements that were signed during President Xi Jinping’s visit this October was a continuation of what was agreed then. The Nepali conscience has for a long time viewed connectivity with China not only as trade option, but also a means of negating India’s leverage over Kathmandu’s decision-making in both domestic and international affairs. As a landlocked nation and having been surrounded by India from three sides, China in the northern border remains the only option for Nepal to harness the kind of strategic autonomy sovereign nations generally aspire to achieve. At the same time, Nepal is deeply aware of the irreplaceable nature of her relations with India. One would say Nepal today is increasingly self-assured of her ability of doing business with China and India in her own terms. This confidence is rising under current administration led by Prime Minister KP Sharma Oli.

How much of Nepal’s interest in a closer relationship with China is driven by a desire to hedge its economic reliance on India?

As I said before, Nepal sees connectivity with China both as a measure of stepping up business opportunities as well as the one which would bring ‘independence’ in her own decision-making. Economic reasons are of course highlighted. But the underlying reasons are far more important, which outweigh — in view of what Nepal experienced throughout the constitution making process during 2015 autumn and subsequent five months in the form of the border blockade — the economic options alone. A closer relationship with China rules the average Nepali mindset as an existential lifeline, for which no price appears to be too expensive, at least at the moment. But Nepal is equally sensitive to the fact that she cannot afford to jeopardize relations with India. It is a delicate balancing act the country is out to play.

In your view, what, if anything, could India do in the coming years to incentivize Nepali leaders from further pursuing closer ties with China?

This is going to be an uphill task. If there is one thing the strategic community needs to take into account as regards Nepal, it is to understand Nepal’s sensitive positioning. Nepal is certainly closer to India from cultural, linguistic, civilizational and geographical points of view. Relations with India, therefore, are irreplaceable.

This dependence on India, at the same time, has had both pluses and minuses. On the plus side, Nepali political leaders have looked at India for support at difficult times. First generation of Nepali leaders like Mananmohan Adhikari and BP Koirala actively participated in India’s independence movement. On the minus, what has gone wrong on the side of Nepalese leadership since 1950s is that they depended too much on India’s leverage for effecting domestic political changes, which naturally made India take Nepal for granted. To overcome resultant trust deficit, both countries must interact intensively at three different levels: government, political leadership and most importantly academic. A narrative of economic interdependence may be developed. For example, it would be good if an increasing number of Indians recognizes that Nepal, a small economy in itself, is the seventh largest remittance provider to India. The number of rational Nepal and India experts in each other countries seems to be thinning, which then points to the need of investment in human resources. Top politicians jumping from one summit to another will not be sufficient. Having said this, Nepal is still likely to keep her possibilities with China open, which should not be seen otherwise as the two countries do share a 1,400 km long border.

Which outcomes of Xi’s visit to Nepal are the most significant in your view?

The most far reaching, I believe, is the statement made by Chinese President Xi Jinping that Nepal would no longer remain landlocked and that Nepal now would be landlinked. This is a huge political statement, which will be remembered and recorded for centuries to come. Enthusiasts of strategic affairs in Nepal often recall Chinese leader Mao Zedong as goading to then Nepalese King Mahendra in 1961: Let us build the Araniko Highway; India will start treating you with little more dignity. Xi’s statement captures the Nepalese imagination at a similar level. All proposed development projects seem to focus on achieving the goal of that single statement Xi made.

Do you see risks for Nepal in growing closer to China or are the expected upsides much greater than any possible downsides?

Opportunities with China may take some time to come to fruition while the risks are more immediate. In pursuing closer links with China, Nepal needs to have much more intense engagements with India and western democracies. A mature conduct of foreign affairs would not upset any of the existing friends. I see India’s discomfort a big challenge and a major determinant of the future course of agreements with China. How Nepal manages this difficult journey she has embarked on will be the spectacular thing to watch in the days ahead.