India has a China-sized problem in Nepal but must capitalise on current momentum
While China has gone about reshaping the regional and even international order, exerting intense gravitational pull over smaller states around India’s periphery, India has remained complacent and insulated.
In a recent interview to The Hindu newspaper, External Affairs Minister S Jaishankar expanded on the enormity of the challenge India faces from a rising China that has launched massive economic and influence operations through trade and connectivity projects to win friends and gain favour among India’s closest neighbours — states that form part of India’s strategic backyard. Jaishankar’s comments betray a tacit admission that India has long been taking relationship with nations on its continental neighbourhood and the Indian Ocean region for granted.
China has not let this ball drop, and Beijing’s growing activism through a mixture of chequebook diplomacy and political interference has got India worried and on the defensive. While China has gone about reshaping the regional and even international order, exerting intense gravitational pull over smaller states around India’s periphery, India has remained complacent and insulated. That is changing now.
As Jaishankar told Suhasini Haidar in the interview, “China today… is impacting every region of the world in trade in connectivity and so, the South Asian region cannot be impervious, cannot be insulated from the rest of the world. When I see global changes, I can’t say, you know, I don’t like these global changes. I must gear up and be competitive myself. I should obviously improve my connectivity, my trade, my education, my medical travel, my institutional linkages. And that is precisely what I am doing.”
Nowhere is this competition for influence evident than in Nepal, whose foreign policies are tipping pointedly towards China despite India sharing an open border and a multidimensional bond stretching over millennia in history, culture, religion, tradition, religion, politics, people-to-people and socio-economic engagements. Yet it is China that is making deep inroads, gaining favour in its politics and polity, drawing Nepal into its orbit and India is getting the sharp end of the tip. This obviously hasn’t happened in a day, but China’s increasing footprint and a spate of infrastructure projects with Nepal removes the buffer zone and brings multiple strategic and security threats for India.
Like any other small state sandwiched between two giants, Nepal seeks to profit from both by playing one against the other, but Kathmandu may find the tightrope walk unsustainable, chiefly because China isn’t a rule-taker, but a rule maker. It will come bearing big investments, but its largesse will carry an influence tag that Nepal will not be allowed to ignore.
Let’s cite an example. Nepal’s recent souring of the relationship with India was centred around New Delhi’s road-building activities. India’s inauguration of the Dharchula-Lipulekh road in the territory over which it exerts sovereign control drew so much ire from the KP Sharma Oli government that Kathmandu came up with a new map and added territory under India’s control as its own and validated the cartographic aggression through its Parliament. All the while we were bombarded with an outpouring of Nepali nationalism and anger towards India on its streets.
Meanwhile, credible reports from multiple sources emerged that China is steadily encroaching into Nepalese territory. News agency ANI reported in June this year, citing a report prepared by the survey department of Nepal’s agriculture ministry that China has encroached on 10 places comprising about 33 hectares of Nepali land, by diverting the flow of rivers which act as a natural boundary.
According to the report, “a total of 10 hectares of land has been encroached on in Humla district as Chinese construction works diverted Bagdare Khola river and Karnali river. Six hectares of Nepali land has been encroached on in Rasuwa district as the construction work in Tibet brought diversions in Sinjen, Bhurjuk and Jambu Khola.” The document apparently warned that Nepal would lose more lands if proper steps are not taken in time.
A corroboration of the fact that China is eating into Nepali villages in the guise of road construction work came from opposition leader Jivan Bahadur Shahi, a member of Nepali Congress Party who revealed that China has started construction activities on the encroached land and is even “preventing trucks laden with food supply meant for people in Humla district,” and Chinese security personnel are chasing away Nepali people from the area. Strikingly, the Oli government, that went hammer and tongs at India, denied all reports of Chinese encroachment despite public protests.
China obviously maintains that the areas in question fall under its jurisdiction but the development is a test case of Chinese expansionism and its mode of operation where it either buys or bullies smaller states into silence. Nepalese prime minister Oli, who has survived inter-party factionalism and political turmoil — thanks to China’s political interference and Beijing-brokered peace between the Oli and Prachanda factions of the Nepali Communist Party — knows better than to irk the Chinese.
Beijing has ramped up its investments in Nepal, pledged nearly $500 million (€436.9 million) in financial aid when Chinese president Xi Jinping visited Nepal last year. In the current fiscal, over 90 percent of foreign direct investment in Nepal is from China, and millions of yuan have been pumped into infrastructure and hydropower projects. A trans-Himalayan Tibet-Nepal rail link is also on the anvil and China has given Nepal access to its sea and land ports to slash Kathmandu’s reliance on Indian ports for commerce.
But Chinese investments come with conditions. Media in Nepal has been warned not to carry articles that injure Chinese “sensibilities”. Xi, the first Chinese president to visit Nepal in 22 years, after his meeting with Oli last year warned that “anyone attempting to split China in any part of the country will end in crushed bodies and shattered bones… and any external forces backing such attempts dividing China will be deemed by the Chinese people as pipe-dreaming!” — a reference to the pro-Dalai Lama Tibetans who reside in Nepal. As a gateway to the Tibet Autonomous Region, Beijing wants Kathmandu to stop Tibetans from using Nepal as the transit point in their visit to the Dalai Lama in India.
Nepal is also keen to keep its relationship going with India, mindful of the fact that it cannot be seen to tilt entirely within the Chinese sphere of influence while sharing a close geographical space with India.
In recent weeks there has been an attempt at a thaw driven by a determination from both sides to move ahead despite differences over the boundary issue. India has sent its spy agency chief, army chief and foreign secretary Harsh Vardhan Shringla in back-to-back visits to Nepal.
Shringla’s visit, in particular, drew a positive response from Kathmandu. The foreign secretary, who is of Sikkimese descent and is fluent in Nepali, impressed the audience at the Asian Institute of Diplomacy and International Affairs (AIDIA) in Kathmandu during his visit last month. He did a “candid review” of the bilateral relationship with Nepal during his interaction with Oli and held a string of high-level meetings with bureaucrats, representatives of Nepali Congress, Madhesi parties, handed over 2,000 vials of the antiviral Remdesivir to Nepal and went to Gorkha district and inaugurated three schools that have been established with help from India.
He also told the audience during his AIDIA address that “India's development and modernisation are incomplete and intrinsically and symbiotically linked to the development and modernisation of neighbouring countries such as Nepal”. Shringla’s charm offensive seemingly translated into some results as reports emerged that Kathmandu has finally given the green signal to India’s Konkan Railway Corporation Limited to carry out a Detailed Project Report (DPR) to connect Kathmandu with Raxaul railway station in India, Indian media reported quoting local media in Nepal. The total length of the rail line is expected to be 136 km to be built at a cost of about three trillion Nepali rupees.
While this is a positive sign, the task is cut out for India. Oli is facing renewed pressure at home due to political instability and return of factionalism in the ruling Communist Party. The Nepalese prime minister recently convened an all-party meeting to stave off inner-party pressure on him to resign and to mitigate a new challenge — anti-federalism and pro-monarchy rallies in different parts of Nepal from agitators who are marching on Kathmandu’s streets, demanding scrapping of the federal system and return of the king to what they chanted “save the country”.
The meeting, however, ended badly for Oli. The opposition tore into him for his inept leadership Amid the political uncertainties in Kathmandu that may ripen the ground further for Chinese political activism, Nepali foreign minister Pradeep Gyawali’s upcoming visit this month should further melt the ice, but the scale and nature of Chinese challenge in Nepal won’t be mitigated by a few visits. To maintain its influence, India must deliver speedily on the projects and extend strategic altruism towards Nepal. India cannot afford a pause or drop in the trajectory of bilateral ties.
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