Mountainous Question – China’s growing influence in Nepal means India’s diplomacy and project delivery will need to improve

Source: The post is based on the following articles

“Why China is happy with Nepal’s new PM” published in the Indian Express on 3rd January 2023.

“Mountainous Question – China’s growing influence in Nepal means India’s diplomacy and project delivery will need to improve” published in the The Times of India on 3rd January 2023.

Syllabus: GS 2 – India and its neighbourhood- relations.

Relevance: About India-Nepal relations.

News: Recently, Pushpa Kamal Dahal “Prachanda” has become the new Prime Minister of Nepal. He was the leader of the third-largest party in parliament and was not even considered a serious contender for the post. But some last-minute political moves ensured his Prime Ministership.

He will face a mandatory vote of confidence in parliament. His failure to secure a vote of confidence would work in favour of the single-largest party which, under such circumstances, would gain the first opportunity to form the government as per article 76(3) of the constitution.

What are the Chinese concerns with the previous government in Nepal?

The previous PM dampened the prospects of the execution of China’s Belt and Road Initiative by stating that Nepal would prefer projects under grants over loans.

The Nepal parliament also ratified the $-500 million Millenium Challenge Corporation (MCC) compact in February. This effectively overruled Chinese objections and awarded two mega hydroelectricity power projects — West Seti and Seti Water — with a combined production capacity and worth of 1200 MW and $2.4 billion to the US.

Hence, China sent multiple messages that attest to engagement with and interest in recent developments in Nepal.

Why China is happy with Nepal’s new PM?

The new PM was inspired by the ideologies of Mao Zedong. China’s acting ambassador met the Nepalese PM to congratulate him on the same day as his elevation.

He also conveyed that China had lifted the suspension of business and supply of goods from the Rasuwa-Kerung and Hilsa-Parang 2 checkpoints that had not been commissioned for use since the Covid-19 pandemic hit.

A high-level Chinese team was already in Kathmandu to conduct a feasibility study for the ambitious Kerung-Kathmandu railway line, a major project under the BRI.

What India can do to counter the Chinese involvement in Nepal?

-India needs to reach out and build equally robust ties with all political stakeholders in Nepal, be they on the left, right or centre.

-Given its geographic position, it is natural for Nepal to seek infrastructure investment from both India and China. India should be competitive and prove to Nepal that Indian projects are best suited for the Himalayan nation than the Chinese.

-Many Indian projects in the past were marred by delays due to local environmental objections, cost overruns and the selection of poor local contractors. Hence, India should help Nepal correct these and deliver on big-ticket infrastructure like the Arun III hydroelectric project by the scheduled deadlines.

-Further, India should also maintain close political communication to avoid disputes like the one over territory in the Kalapani region