Whenever the Nepal-India relationship is discussed, it usually brings into mind special relationship between the two countries, open border, free movement and people-to-people affiliation, but in fact it is more than that. The bilateral relations between Nepal-India are founded mainly on the age-old connection of history, geography, natural resources, language, values of democracy and the contacts amongst the population.

India has only ‘noted’ different political proceedings mainly the 2015 Constitution and the recent Kalapani Region inducted in the map of Nepal endorsed by the legislature. These are important and have geostrategic and geopolitical impacts for Nepal and Nepal-India relations. And for once, all the political parties are united on both the resolutions. While the Ministry of Foreign Affairs (MoFA), Nepal has time and again requested for bilateral talks, India has remained silent, indicative of a reluctance to start a dialogue with the K P Sharma Oli-led government. Nepal-India is bound by a special relationship, geopolitical and strategic compulsions, and strategic vision.

Strategic vision constraints

Looking at recent history, ‘new Nepal’ emerged as a republic, federal and secular country after two decades. India played a crucial role in orchestrating the 12 point agreement between the Nepal Communist Party Maoists (NCPM) and the Seven Party Alliance (SPA). The Maoists leadership at the later stage of the conflict was sheltered in India and it gave a political advantage to India. Several reports have come out that has shown that some nations were financing the movement to influence the Maoists leaders for either bringing them to the table for peaceful settlement or with a long-term scheme of altering Nepal and abolishing the monarchy. It can be said that the Nepali Army lacked strategic farsightedness in international politics and Nepal’s position in the power rivalry.

Nepal-India has endorsed policies, agreements, and treaties’ without visualizing the future impact on its relationship and sensitivities. It didn’t plan any strategic planning or an ‘exit strategy.’

China-US rivalry & India-China competition

The China-US power rivalry and India-China competition have led to many political events in the Himalayan country.  The rivalry and competition are inviting strategic compulsions for nations like Nepal that is at the center of the arc of the Himalayas. Nepal known to be the buffer between communist China and democratic India neither cannot be linked nor can remain locked. Political actions to border disputes are appearing to lead to trust deficit and reluctance and suspicion for cooperation. 

US Secretary of State Mike Pompeo says the free world must change China or 'China will change us.' The China-US rivalry is more prominent than ever before. Pompeo said “We know that the People’s Liberation Army is not a normal army. Its purpose is to uphold the absolute rule of the Chinese Communist Party (CCP) elites, and expand a Chinese empire, not to protect the Chinese people.”

In the US India Business Council (USIBC) in July this year, Pompeo reiterated the importance of India in the region, “US desires a new age of ambition in the US-India relationship.”

“We don't just interact on a bilateral basis. We see each other for what we are great democracies, global powers, and really good friends,” he said, adding that, “It's important that democracies like ours work together, especially as we see more clearly than ever the true scope of the challenge posed by the Chinese Communist Party."

"It's important that democracies like ours work together, especially as we see more clear than ever the true scope of the challenge posed by the Chinese communist party."

China’s growing influence 

China’s growing interest in Nepal, along with its ambitious BRI project, and other engagements appear equally appealing to the general eye, and more so to competitive national politics in Nepal. The China Pakistan Economic Corridor (CPEC) is vital for Pakistan and more so for China, as it needs it to be linked to the Indian Ocean to project its power. China’s Belt and Road Initiative (BRI) has met with enthusiasm in Nepal as it is felt  it will reduce dependency and will give it leverage in the conduct of geopolitical and economic relations with countries in the trans-Himalayan region and beyond.a

With 20 deals and over $500 million pledged in aid during President Xi Jinping’s visit to Nepal in 2019, China is fulfilling the right political needs in Nepal. President Xi in his visit stated that Nepal will become from a landlocked country to a land-linked country. Now, there are 48 flights a week from China, and half of all new Chinese FDI in Nepal go to tourism. Jyatha in Thamail is known more as China town with more Chinese owned hotels and restaurants than of Nepalese. China tops in foreign tourists' arrival in Nepal. 

The website of Nepal’s Ministry of Foreign Affairs shows that China is the largest source of foreign direct investment in Nepal. Chinese investors committed to spending over $8.3 billion in Nepal during the Nepal Investment Summit concluded in Kathmandu in March 2017. China’s economic potent has and will continue to sway policy deliberation in countries including Nepal. The ongoing parliamentary discussion on the Millennium Challenge Corporation projects is an example of many geostrategic compulsions Nepal’s political powers may adhere to. The project was to help increase the availability of electricity and lower transportation costs and also to spur investments, and accelerate economic growth. But has been mired in controversy as NCP leaders are divided on the issue after the US Embassy in Nepal pointed out it to be a part of the Indo-Pacific Strategy. But one of the major factors that have led to this situation is due to the rivalry between the US and China in Nepal.

China has committed to spending over the US $ 8.3 billion in hydropower, cement, herbal medicine, and tourism. China’s political, tourism, economy, and military relation with Nepal is greater than before. Nepal is one of the founding members of the Asian Infrastructure Investment Bank, dialogue partner in the Shanghai Cooperation Organisation and Asia Cooperation Dialogue. China is an observer of the South Asian Association of Regional Cooperation (SAARC). 

The CCP and NCP has increased its affiliation, but will the closeness prolong, as is known that this is causing discomfort to both India and the US. The Nepal government expects grand economic support from China for its domestic commitments for development, at least before the next election. 

The rise in China’s political influence was also witnessed in the recent internal power struggle that was seen in the ruling NCP. As intra-party row intensified with voices growing for Oli to step down, China intensified its political meetings with different factions. It also showed the increasing strong bond between CCP and NCP.

The implementation of the projects under the BRI will intensify under Trans-Himalayan Multidimensional Connectivity Network. China has provided four seaports and three land ports for Nepal’s trade with third countries though it is an issue as the ports are more than 2000 km away while the two ports of India - Kolkata is 774 km, and Visakhapatnam is 1194 km. The three strategic north-south corridors (Kaligandaki, Gandaki, and Koshi) connecting China with India and feasibility of Nepal East West Railway Network to Kathmandu-Pokhara and Lumbini are being assessed. 

The arc of the Himalayas is being assessed by both China and India for their influence right from the eastern to the western edge. The incident in the Galwan Valley region – where a brutal brawl between Indian and Chinese forces left at least 20 Indian soldiers dead – is a point in case. 

As Nepal is showing keenness, China is slowly crafting its way to Kathmandu. Nepal is leaving its long traditional policies vis-a-vis with India. However, The ruling party is trying to give the impression that it is trying to maintain the same relationship with China that it shares with India.

Nepal’s special relationship with India 

With all this said India is still and will remain Nepal’s largest trade partner and the largest source of foreign investments. India provides transit for almost the entire third-country trade.  Total trade with India was about the US $ 8.2 billion. 

Five treaties and agreements guide and shape Nepal-India proximity with “special relationship.” The 1923 Nepal-Britain Treaty is also believed to be crucial in the history of Nepal for acknowledgment of Nepal’s independence and the right to conduct foreign policy. The 1947 British-India-Nepal Tripartite Agreement involving the three governments is a defence treaty allowing rights and continuation of Nepali citizens in both the British and Indian armies. This continues till today though equal benefits continue to be a contested argument. India and Nepal initiated their relationship with the 1950 Indo-Nepal Treaty of Peace and Friendship and which cemented their “special relationship.”

The deep-rooted people-to-people free movement, and employment opportunities for more than six million people working in India, including the Gurkhas, help Nepal’s economy a great deal. The twelve-point agreement signed in Delhi between Seven Political Parties and the Communist Party of Nepal (Maoist) in 2015, replacing the Interim Constitution of 2007, brought about fundamental changes, which abolished the 240-year-long monarchy rule, and institutionalized republicanism, federalism and secularism for the first time. 

Nepal is a small country but unlike other small countries like Singapore-Malaysia and New Zealand, it has not been able to progress much on national strategies or on following pragmatic foreign policies. It is yet to achieve prosperity.

Time to redefine special relationship with India

As a republic, with federalism and secularism, along with power rivalry and competition, political parties in Nepal have argued for revisiting the special relationship that has stood as a pillar in the Nepal-India bond. 

After the Galwan clashes, it has emerged that one has to have policies to restrain Chinese economic influence, two, bilateral security competition arrives with boundary disputes, three, BRI projects and its security impact, and four, security competition in India’s neighbourhood. 

Nepal and India both have a long approach and short strategy, partly because the depth/scope of change is misjudged. Nepal changed enormously between 1996 to 2015 in ways that multiple Indian administrations have misinterpreted.

Nepal is India’s closest ally and neighbour that is looking to Delhi to redefine its special relationship. Nepal-India's special relationship requires constructive furthering especially during the pandemic time that has impacted jobs and development efforts in the nation. It is also time to execute grand projects of water connectivity and the Raxaul-Kathmandu railway link that India is agreeable to by offering financial and technical support. 

What is needed between the two countries is close cooperation and not competition – this is obligatory in the Nepal-India relationship – and of course, no confrontation both at political and people-to-people relations, as this will lead to a catastrophic situation. 

Nepal must first strengthen its foreign policies and develop its governance capabilities; and secondly have transparent assurances from China and should arrive at an understanding, even if this necessitates some give and take.

While this is happening, Nepal-India should work together hand-in-hand on new economic and infrastructure projects that will lead to substantial benefits to the Nepalese citizens and, moreover, will address the vulnerabilities that appear in Nepal as a country, which is engaging with China and other great powers. 

(The writer is a Nepal Army veteran and a strategic analyst. The views expressed are personal)