Nepal’s Indo-China Dilemma


Modi in Janakpur

Modi’s nationalist sentiments, social base, and foreign policies enhancing India’s image had him win the election

Narendra Modi was sworn in as the Prime Minister of India for the second consecutive term on May 29, 2019, with his BJP winning the majority in the Lok Sabha Elections. With this, there has been a sharp attention shift in Nepal’s diplomatic and political circle as Nepal became the first country among BIMSTEC member states to confirm its attendance to witness Modi take his Prime Ministerial oath.

Modi’s nationalist sentiments, social base, and foreign policies enhancing India’s image had him win the election. He repositioned himself as people’s leader nationally and a global ally. India, under Modi’s service, developed relations with various countries in a dynamic and comprehensive way. The Modi-led government had carved its foreign policies under two main agendas-territorial integrity and global engagements for socio-economic development. India’s recent territorial conflicts have been contested over two different cases with China and Pakistan following the Pulwama attack and the Doklam standoff, whereas India’s foreign policy towards Nepal is geared to secure a strong Indian influence through economic and security means. 

Possible implications of Indian election in Nepal

Modi’s fresh victory will further Nepal-India ties, with Nepal facing a diplomatic dilemma to maintain a geopolitical balance between its immediate neighbors. Nepal may face a strong push for America-initiated Indo-Pacific Strategy (IPS), in which India is a strategic partner. In terms of IPS, America was engaging in Nepal previously through India, but as America detected an emerging challenger and its involvement in Nepal, it has altered its strategy into direct engagement in the country. On the other hand, China has been engaging not only through infrastructural projects but is also securing projects related to cyber security of Nepal.

After Modi’s government comes to power, it can be expected that the issues at halt between Nepal and India can take a high run. Modi is to soon receive a joint report on Eminent Persons’ Group (EPG) made by Nepal-India last year. The report addresses solutions to settle border related issues like issuance of identity card for the cross border travelers, digital monitoring surveillance, and narrowing border entry points. The report was submitted six months ago, but India refused to receive it, disagreeing with some content and informed the authorities that they will only receive a modified report after a new government is formed. India-funded projects in Nepal will probably expedite too during Modi’s term.

Nepal is the current Chair of SAARC, and the future of this regional organization depends on India-Pakistan relations. India will less likely be attentive towards SAARC as it is giving BIMSTEC a push for regional engagement, isolating Pakistan completely.

Modi kept his voters motivated with core nationalistic sentiments against Pakistan and Muslims, pursuing his politics of Hindu nationalism. Nepal may possibly experience the effect of this applied strategy as Nepali politicians have good ties with Modi, and the Nepalis, mainly from the southern, belt are sentimentally attached with his victory.

India’s current position in Nepal

The Indian focus on Terai, the economic blockade of 2015, and demonetization drive in 2016, weakened the political alliance that Nepal-India had been enjoying for years. PM Oli played his nationalism card against the Indian blockade and landed on the Prime Ministerial post in 2017. Since then, the distance with India grew wider while with China, Nepal got closer. Nepal signed the Belt and Road Initiative (BRI), withdrew from BIMSTEC joint military drill in Pune, participated in a 10-day long military exercise with China, and signed the Transit and Transportation Agreement, ending dependency on India for third-country trade.

As Nepal is geographically located between two regional giants, the country encounters threats and opportunities at once. Both India and China practice ‘Neighborhood Policy’ engaging with its neighbors economically. China initiated $ one trillion worth BRI project – has proposed a new framework to the international community for global connectivity. Nepal has signed nine projects with China under BRI, which has broken Indian monopoly on Nepal’s economy since Chinese investments have flown in the country in an astonishing amount.

India may cooperate with China economically, but will resist strategically

India has traditionally been the largest trading partner of Nepal, but it has now realized that maintaining its position and influence in Nepal has become more difficult than before. Indian government will more likely share the economic benefit they can enjoy from Nepal, rather than competing against China. India’s presence will play a role to balance Chinese grasp in Nepal’s economy. Nepal should also not ignore the motives of projects entering its soil, and the trends and outcomes of the projects that the investors have undertaken in the past.

The newly formed Indian government will make attempts to oppose Chinese dominance in the region. Its initiation already started when India boycotted Belt and Road Forum for the second time, making only Pakistan and Nepal from South Asia to attend the conference. Relations between India and Japan is fostering too, and an assumption can be made that the action is in play to weaken China’s influence.

Having an open border with Nepal, India is concerned about China reaching its doorstep through Nepal. Hence, India will tactically play in Nepal’s southern belt to stop China encroaching India.

As Nepal plays its neighbor card when necessary, it has also become a playground for both India and China whenever the two countries feel the need for it. Modi’s elevation to power for an additional term may accelerate diplomatic dilemma for Nepal, but it will still contribute to India’s socio-economic success in possible ways willingly or unwillingly. Nepal defying influences is futile, rather it should focus on how to gain from hosting a competition for regional power and improve the lives of Nepali people.  

Author: Kunja Rai

Photo: Prabhat Jha

This article first appeared in The Kathmandu Post on June 10, 2019.

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