Nepal and International Relations

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October Analysis

Nepal and India

Border disputes with India remained the key stumbling block to reset political relations between the two countries. A task force formed by the Nepal government to identify/gather evidence and suggest a strategy on border dispute submitted its report after three months listing evidences and recommending that Nepal engage in talks with India to reclaim the territory.[1] In the meantime, Nepal has also started studying India’s proposal to connect Kathmandu with a railway line from Raxaul. India has asked Konkan Railway Corporation to carry out a Detailed Project Report.[2]

PM Oli rejigged his cabinet on October 15, removing Minister Ishwar Pokhrel from the Defence Ministry to the Office of the Prime Minister and the Council of Ministers. He kept the Ministry of Defence for himself.[3] The move, which came on the eve of Indian Army’s Chief of Staff General MM Naravane’s visit to Nepal, was interpreted by Indian observers as an attempt to appease India as Minister Pokhrel had been critical of India and the Indian Army.[4] In addition, there were growing difference between the Nepali Army and Minister Ishwar Pokhrel in recent months and the rejig was an indication that PM Oli was listening more to the concerns of the Nepali Army rather than his own minister. Defence Minister Ishwar Pokhrel was removed from his defence portfolio on the eve of Naravane’s visit.

On October 21, Samant Kumar Goel, chief of India’s Research and Analysis Wing (R&AW), visited Nepal on October 21 and held dialogue with Prime Minister K P Oli. Politicians and observers criticized Prime Minister Oli for meeting with India’s intelligence chief to restart political dialogue; the meeting allowed PM Oli’s detractors within the party to attack him.[5] Both India and China have engaged in visible and well publicized events as they hold talks with Nepali political leaders, indicating that they may as well be sending a message to each other. In particular, a faction of the NCP, led by Madhav Kumar Nepal and Pushpa Kamal Dahal have remained close to China in recent months. Dahal was particularly critical of Goel’s visit as he was not informed about it.[6] A few days later, the Vijaya Dashami greeting issued by PM Oli contained a map of Nepal without the new claimed border areas in Kalapani, which was seen as another evidence of PM Oli’s attempts to apepase India.[7]

There were discussions in Nepal around why India had chosen an intelligence chief as its special envoy and whether the Indian government had handed over its Nepal policy to the RAW.[8] In any case, given the history of RAW’s role in Nepal, his meeting with Nepal’s Prime Minister did not go well with the Nepali public and degraded PM Oli’s image. In its editorial, The Hindustan Times noted that while Goel’s visit demonstrates RAW’s clout in Nepal and the Indian government’s decision to engage with PM Oli, “New Delhi must be careful that “normalcy” in ties should not come at the cost of narrowing down its interests in Nepal.” It added that “only a stable, inclusive, democratic Nepal—led by a regime which knows the value of special ties with India and engages with China within certain boundaries—can help keep the regional security environment balanced.”[9]

The Chief of Army Staff Indian Army, General MM Naravane, visited Nepal on November 3 and was bestowed with the highest honours, almost erasing the bitterness generated by his comments regarding China and Nepal in May 2020.[10] The military of the two countries have, from time to time, helped mediate dialogue and channel communications when formal political relations between the two countries have broken down. Indian foreign secretary Harsh Singhla is likely to follow General Naravane and resume dialogue on border disputes through the Joint Technical Level Boundary Committee. Although India opened its border with Nepal on October 22, the Nepal side will open it only on November 15.

Nepal-China

Nepal’s relations with China has not been very smooth in recent months. There’s been lack of progress in pursuing agreements with China, differences on trade and transit, and even border disputes.

Nepal’s agreements with China, signed during President Xi Jinping’s visit to Nepal in October 2019, are in limbo despite efforts by the two sides to push forward the projects.[11] Now questions are being raised whether the delays are due to Covid-19 and bureaucratic hurdles or cooling down of political interest. Prime Minister KP Oli’s behavior in recent months indicate that the reason may be more political as pro-Chinese forces inside the NCP have now grouped against him and are criticising him for promoting the interests of India and the US.

Similarly, Nepal’s linkage to China has suffered as a result of China showing reluctance to fully operate the main transit points in Gyirong and Tatopani. There are also issues about trade. Nepal has been seeking concessions for export of about 512 goods to China since the 1980s, China is still to consider Nepal’s request. China has been offering concessions to about 8000 goods, but Nepal does not have comparative advantage on goods from this list. On the contrary, China has been enjoying exponential growth in exports to Nepal in the last several years.[12]

Meanwhile, some local and political representatives from Humla have been raising questions over China’s encroachment of Nepali border, Nepal’s government officials[13] and the Chinese are insisting that no such encroachment has taken place.[14] Chinese media has been making the issue personal by bringing in the Nepali Congress and MP Jiwan Bahadur Shahi, for spreading “fabricated” reports.[15] While NC has claimed that China has indeed encroached Nepali territory[16], Shahi has pushed back by outlining evidences and challenging China to back its claim with evidence.[17] The stance by MPs like Jiwan Bahadur Shahi raises the prospect that Nepal government may be trying to protect Chinese interests rather than protecting its own national interests, while pro-Chinese sections in Nepal are claiming that it is an attempt by western and pro-Indian forces to contain China in Nepal. India’s view is that China is trying to limit India’s influence in Nepal and expanding operations close to the Nepal-India border by procuring huge amounts of land.

India and the US

Nepal’s cooling down of relations with China comes on the heel of increased pressure from India and the US. On October 25-26, India and the US held a two-plus-two ministerial meeting, forging an understanding for institutionalised intelligence sharing arrangement and cooperation on unmanned underwater and space platforms called Basic Exchange and Cooperation Agreement (BECA).[18]

During the meeting two sides also discussed China’s “aggression” in Ladakh, peace in Afghanistan and terror in Pakistan. The Joint Statement on the Third U.S.-India 2+2 Ministerial Dialogue said the two countries intend to expand cooperation under the Comprehensive Global Strategic Partnership forged during US President Donald Trump’s visit to India on February 20, 2020. The joint statement talked about cooperation during the COVID-19 pandemic; shared vision for the Indo-Pacific and global leadership; advancing the defense and security partnership; strengthening bilateral U.S.-India cooperation; and nurturing people–to-people bonds.

India held the first of two phase the annual naval exercise in Malabar from November 3-6, which marked the “strategic convergence” of the Quad—India, US, Japan and Australia. The next exercise will be held on November 17-20. The stated objective of the exercise is to maintain secure and open sea lanes and perceive Chinese Navy as a threat. Australia took part in the exercise after a gap of 13 years. China criticized the Quad as a “huge security risk” and has tried to push back against recent US moves to forge strategic alliances in the South and East Asian region through various means.[19]

Columnists in the Global Times questioned the extent of US backing and said India-China relations was already sour and the US incitement was unlikely to further dampen the ties. Despite several rounds of talks, India and China continue to bolster their military capability at the border points. Indian experts are upbeat about continuation of US-India relations after transition of power in the US despite the existence of several irritants. The primary points of contention between Indi and the US are, India’s defence purchases from Russia, India’s ties with Iran, US position on domestic social and human rights issues, and differences in trade.[20] According to US officials, partnership between US and India is based on “shared security and geopolitical goals, shared interests, and shared values.”[21]


[1] https://kathmandupost.com/national/2020/10/07/task-force-suggests-dialogue-as-basis-for-reclaiming-areas-disputed-with-india

[2] https://www.newindianexpress.com/world/2020/oct/06/after-indias-proposal-nepal-starts-discussion-on-kathmandu-raxaul-railway-2206550.html

[3] https://kathmandupost.com/national/2020/10/15/with-a-cabinet-rejig-oli-sows-seeds-of-conflict-in-the-ruling-party

[4] https://www.hindustantimes.com/india-news/nepal-pm-oli-s-cabinet-reshuffle-holds-an-outreach-message-to-india/story-a820jW7jDvkS3hQa7Pd93N.html

[5] https://kathmandupost.com/national/2020/10/22/india-intelligence-chief-s-sudden-dash-for-kathmandu-raises-many-an-eyebrow

[6] https://kathmandupost.com/politics/2020/10/31/oli-extends-an-olive-branch-to-dahal-but-the-latter-remains-unconvinced

[7] https://indianexpress.com/article/world/controversy-over-old-map-of-nepal-in-kp-oli-dussehra-greeting-card-6878975/

[8] https://kathmandupost.com/national/2020/10/29/india-spy-chief-visited-nepal-last-week-questions-remain-if-delhi-has-handed-its-nepal-policy-to-the-spooks

[9] https://www.hindustantimes.com/editorials/stay-focused-on-the-big-picture-in-nepal-ht-editorial/story-6MKWB688Svz48lgBx1jgZL.html

[10] Naravane said at the time that Nepal was claiming Kalapani at the behest of China. Also see https://www.hindustantimes.com/india-news/gen-naravane-to-call-on-pm-oli-on-friday-as-nepal-to-reinvigorate-ties-with-india/story-g0a7ql6Gs9paGTje2uw3tJ.html

[11] https://www.nepalitimes.com/latest/nepal-china-agreements-are-stuck/

[12] https://myrepublica.nagariknetwork.com/news/china-hands-nepal-list-of-188-products-it-wants-to-import-ignoring-a-previous-list-of-512-products/

[13] https://mofa.gov.np/press-statement-on-news-report-on-nepal-china-border/

[14] https://www.globaltimes.cn/content/1203736.shtml

[15] https://www.globaltimes.cn/content/1206402.shtml

[16] https://thehimalayantimes.com/nepal/main-opposition-nc-reiterates-china-has-encroached-nepali-territory/

[17] https://www.onlinekhabar.com/2020/11/908867

[18] https://edition.cnn.com/2020/10/27/asia/us-india-defense-china-intl-hnk/index.html

[19] https://www.scmp.com/news/china/diplomacy/article/3105948/us-led-quad-huge-security-risk-asia-chinese-foreign-minister

[20] https://timesofindia.indiatimes.com/india/biden-will-continue-strengthening-india-us-relationship-say-experts/articleshow/79109875.cms

[21] https://www.thehindu.com/news/national/india-and-us-have-been-too-cautious-on-china-says-us-official/article32837418.ece

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