Delhi’s Diminishing Dominance: Has India finally lost its strategic clout to China in Nepal?

Modi and Oli

2nd January 2021

The Annapurna Express

The recent visit of India’s Chief of Army Staff General M. M. Naravane to Kathmandu from 4-6 November marked a high-level exchange between India and Nepal. Though covered positively in both the countries, beneath the fanfare of his visit lies a situation brimming with complexities. His dash to Kathmandu comes months after a diplomatic feud over a territorial dispute between the neighbours. Incidentally, he himself had accused Nepal of ratcheting up the issue with India at the behest of China; Nepal’s other neighbour, which currently has engaged India in a deadly clash in Ladakh. Does this visit reflect India’s eagerness to repair its ties with Nepal owing to its anxiety over China’s increasing clout in its neighbourhood?  In reality, despite being more influential in Nepal, India must account for the “China” factor in its future frictions with Nepal.


Indo-Nepal Ties and Nepal’s tilt towards China


India’s relationship with Nepal is amongst its closest within South Asia primarily due to their shared Hindu demography and kinship-based ties in the bordering regions. The Treaty of Peace and Friendship signed in 1950 which symbolises their “special” relationship brought Kathmandu into Delhi’s tight embrace allowing India to “guide” Nepal’s foreign policy and providing it the ability to intervene in Kathmandu’s internal affairs. However, in the past three decades, a simmering discontent against India’s overt dominance over Nepal has emerged due to Delhi’s frequent interference in its domestic politics and its ability to impose blockades. India’s alleged role in fomenting large scale protests by ethnic minorities and a crippling blockade in 2015 when Nepal brought about constitutional reforms without “consulting” Delhi, triggered the worst deterioration of their ties. With its economy in ruins after a devastating earthquake, the blockade only aggravated Nepal’s woes, leading to a spike in anti-India sentiments, and stimulating Nepal’s proactive tilt towards China. 


 Willing to expand its own influence across the Himalayas, Beijing has sought to utilise this situation to its favour by signing agreements for transit and investments with Nepal with a desire to break India’s monopoly. Its increasing ties with Kathmandu has helped it penetrate India’s neighbourhood, providing Nepal with a counterbalance against Delhi’s overwhelming domination.


Disputed Regions between India, China and Nepal

Map showing the disputed region; currently administered by India but claimed by Nepal. / Source: BBC


It thus appeared that an emboldened Nepal objected sharply to the inauguration of an Indian border road passing through Lipulekh on May 8, claiming Lipulekh-Kalapani-Limpyadhura as its territory. It also deployed its forces, summoned Delhi’s envoy and pushed for a law in its Parliament seeking to formalise its claims. Nepal’s reaction amidst a border crisis with China has surprised Delhi; initially downplaying the diplomatic row, it ultimately decided to send its Army Chief to Kathmandu to mend the ties. While the urgency may be viewed as Delhi’s diminishing dominance in the Himalayan state, such is not the case on ground. 


Delhi First, Beijing Later: Nepal’s destiny


Aiming to overshadow Delhi’s sway over Nepal, Beijing has begun pouring tremendous capital there. Consequently, China has overtaken India in terms of infrastructure funding, FDI and developmental assistance to Nepal as a part of its chequebook diplomacy in South Asia – gaining strategic influence in India’s neighbours like Pakistan, Bangladesh, Sri Lanka, Nepal and the Maldives by offering economic benefits. 


While the cash inflow has indeed bought Beijing some traction in Dhaka, Colombo, Male and Kathmandu, the latter stands out differently. Unlike the other three capitals where certain governments are distinctly identified as being either pro-India or pro-China, in Kathmandu, as one former Nepali Prime Minister explains, there is a non-partisan political understanding and an implicit agreement that India will remain their most important neighbour. India employs nearly 8 million Nepalis in its economy, and offers port services to Nepal for trade. As a leading Nepali economist states, China cannot easily wean Nepal off its dependence on India despite the investments. Finally, with diversified support bases amongst different parties and factions of Kathmandu’s political landscape, India’s political influence will remain unmatched by China, which has only found favour amongst the Communist Parties in Nepal.


What is then the trigger behind Nepal’s sudden moves?


Interestingly the Lipulekh feud does not necessarily reflect China’s increasing leverage over Nepal as much as it exhibits Kathmandu’s own desire to reset its relationship with Delhi. For years Nepal has been trying to modify the 1950 Treaty to engage with its huge neighbour on a less “special” and more “equal” relationship, displaying a desire to move out of its “India-locked” and not just a landlocked status. Specifically, the Lipulekh-Kalapani-Limpyadhura dispute has been lingering since 1991. Delhi’s refusal to acknowledge the dispute has only fuelled antagonism in Kathmandu. Furthermore, the blockade of 2015 has been a crucial trigger for rise in “Nepali nationalism”, which is now being identified as synonymous to “anti-Indianism”. That the timing of Nepal’s map-war coincided with the Ladakh clash, has been misread as Nepal’s current PM, KP Sharma Oli pushing Delhi at Beijing’s behest. It is worth questioning that if India had been in possession of the disputed land for more than six decades why did Nepal decide to strongly assert its claim by drawing a map including these areas only now? Also, India’s border road was not constructed overnight; Kathmandu must have been aware of its construction much before it was inaugurated on 8 May 2020. Therefore to claim that the inauguration of the border road suddenly outraged Nepal is also unjustified. The answer lies in Nepal’s internal political dynamics. With the Oli government battling criticism over its handling of COVID-19, India’s inauguration of the border road in fact threw him a lifeline, allowing him to distract his opponents and gain public support by standing up to Delhi. 


At the same time, Oli was receptive towards meeting General Naravane; had this flare-up been actually supported or engineered by Beijing as perceived, Kathmandu’s stance would have been tougher. This suggests that even if Delhi may be disliked for its hegemonic attitude, successive governments in Nepal will continue relying on it, whether for their country’s economic sustenance or even for their own political survival by ramping up nationalist agenda; China’s role in fomenting the Delhi-Kathmandu strain is exaggerated. In fact the crisis proves that Kathmandu’s reaction was to draw Delhi’s attention and not to challenge it.


How is Delhi managing the crisis?


Delhi is also to blame for the situation; its discomfort with Kathmandu’s desire for attaining strategic autonomy is perplexing when it itself has pursued the same with Moscow and DC. Delhi’s patronizing attitude towards Nepal can lead to actual rise in China’s weight at the expense of India. As experts note, for Delhi, Nepal has long represented a subordinate partner within South Asia where it can flex its geopolitical muscles to impose its will; its inactivity over the dispute or even blatant refusal to resolve it has the potential to push Nepal closer to China. However, by being insensitive to Kathmandu’s demands, it is ceding its own geostrategic space in Nepal, paving the way for Beijing’s enhanced significance in the region. The current crisis with Nepal is one of the many wherein Delhi has faced heat from its much smaller neighbours which have detested its big-brother attitude in South Asia. As mentioned before, not just Nepal, but political parties in India’s other smaller neighbours have frequently attempted to bring China into their own relationships with India. And Beijing has not shied away from such invitations, and has been making steady inroads into the Indian Subcontinent, more so courtesy of Xi Jinping’s pet project – the Belt and Road Initiative


Is the China Factor Relevant?


The founding monarch of the Kingdom of Nepal, Prithvi Narayan Shah had once described his nation as a “yam between two rocks”. While he was then referring to the Qing Dynasty on one side and the East India Company on the other, his description is still relevant for modern Nepal’s geopolitical reality – a small buffer state between two giants. While being insignificant this time, any future tension between Nepal and India is bound to carry Chinese imprint, and with it the possibility of Delhi’s aggressive response in form of its arm-twisting policies like imposition of blockades. Nepal’s nationalism and India’s hegemonic behaviour can feed each other, drawing China in. Moreover, India’s Ladakh clash with China has not cooled off, as both the militaries have been stockpiling tonnes of rations and building up troop levels to prepare for a tough standoff throughout the winter. Directly or indirectly, the increasing Sino-Indian geo-strategic competition will eventually spill over into India’s neighbourhood. 


As such the General’s visit signals a welcome change of intent on India’s part, displaying its readiness to engage with Nepal in a dialogue, a change in India’s attitude towards Nepal will always be beneficial for both; it will address Nepal’s concerns over its sovereignty and will help Delhi keep Beijing at bay.

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