[Answered] Analyze how China is trying to increase its influence in Nepal. What are the challenges and implications for India?

Introduction: Give a brief context of the question.

Body: Highlight factors showing China’s increasing influence in Nepal & challenges for India.

Conclusion: Way forward.

India and Nepal share deep social, cultural, strategic, political, and economic ties that have been forged over many centuries. India is Nepal’s largest trade partner & source of the largest FDI. The bilateral trade between both nations is over US $11 billion. Over the past few years, China’s efforts to increase its influence in Nepal have been a subject of concern and interest, both for Nepal and its neighbour, India.

How is China trying to increase its influence in Nepal?

  • Infrastructure: China has been actively involved in Nepal’s infrastructure development, including the construction of all-weather roads, bridges, and hydropower projects. The Belt and Road Initiative (BRI) has played a significant role in fostering economic ties between the two nations. Both countries have agreed to intensify the implementation of projects like the Trans-Himalayan Multidimensional Connectivity Network.
  • Security interests: Nepal’s northern border with China lies entirely with Tibet and China sees security cooperation with Nepal as critical in controlling Tibetan matters. Hence, China is following security diplomacy vis-à-vis Nepal.
  • Economic relations: China is the second largest trading partner of Nepal. China has been investing in various sectors of Nepal’s economy, such as manufacturing, tourism, and telecommunications. This can be viewed from the fact that Chinese exports to Nepal were valued at $1.74 Billion last year.

What are the challenges & implications for India?

  • Strategic interest: China may use its “security diplomacy” with Nepal to interfere in the internal affairs of Nepal which may result in Nepal slipping into China’s sphere of influence, which will not be in India’s strategic interest.
  • Terrorism: Close cooperation of China with Nepal may pose security risks to India’s northeast as there will resurgence of Terrorist organizations and insurgent groups operating in India’s northeast aided by Chinese weapons, counterfeit Indian currency & Mao’s ideology.
  • Environmental concern: Some infrastructure projects backed by China have faced criticism for their environmental impact and concerns about Nepal’s sovereignty and debt sustainability which will impact the fragile Himalayan ecosystem.
  • Distrust towards India: Post the 2015 standoff incident there has been a change of perception in Nepal towards India because of India’s big brother attitude, India’s indifferent attitude towards revisiting the 1950 India-Nepal Treaty of Peace and Friendship & approach to deal with boundary issues & water treaties. Some Nepalese ethnic groups dislike India because they think that India meddles too much in Nepal’s politics and interferes with their political sovereignty.


India should cooperate with Nepal on multiple dimensions, abide by its Neighbourhood First Policy & focus on completing infrastructure projects on time while staying out of Nepal’s domestic affairs so that A friendly and favourable Nepal can act as a vital buffer between India and an increasingly aggressive China.

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