Brief Historical Context
- Nepal’s Prime Minister K.P. Sharma Oli is visiting China – something that India is usually uncomfortable with. The good news is that after assuming PMship of Nepal, the Nepalese PM made the first visit to India ( Why? )
- Those of you who are are aware of regional geopolitics of India should note that (a) India works closely with countries like Nepal, Bhutan, Bangladesh and Maldives etc to keep them under Indian influence. (b) India is not comfortable with either of these countries having close ties with China.
Objective of the visist
- Consolidating the Oli regime’s support from the ‘nationalist’ constituency that stands for reducing dependence on India and keeping Madhes and Janjatis marginalised in Nepali polity.
- Sending a strong message to India that Nepal has a viable option in mobilising support from China.
What has triggered this objective?
- Because of India’s support to Madhesi agitation against a discriminatory constitution adopted in September 2015.
- Resulted in restricted supply of essential goods to Nepal causing hardship to Nepal’s people and it generated strong anti-India sentiments among the country’s hill communities.
- Is it first time that Nepal has played China Card? ( Playing China Card Means that – If India doesn’t agree to our terms and conditions, we can always go to China. In short , we dont need India.)
- Now there is a set pattern of the Kathmandu regime flashing the China card whenever it runs into difficulties with its own people and India lends support to the Nepali people’s cause.
Outcome of the visit?
- Mr. Oli concluded 10 important agreements and memoranda of understanding (MoU)s during this visit to China. They cover the fields of transit and trade, connectivity and infrastructure, energy exploration and storage, banking, scholarships and training.
- Some of these agreements are projected as historic and unprecedented, particularly those related to transit through China and rail and road connectivity between Nepal and China.
- These agreements appear to be higher on symbolism than on substantial commitments for delivery. For Example China has agreed to provide the Tianjin seaport for transit of Nepali goods imported from third countries.( Tianjin is located at a distance of 3,000 km from Nepal, as against 1,000 km from the Haldia port in India being currently used by Nepal).
- But in principle, it breaks Nepal’s complete dependence on India for all its imports.
- Moreover Nepal’s infrastructure in its northern region to connect with the proposed Tianjin transit facility is still not in place.
- Similarly, the proposal on connectivity of Nepal with the Tibet rail network will also take time. Under the present MoU on rail connectivity, Chinese commitments are for feasibility studies and technical support only.
- Rail connectivity between Tibet and Nepal is also a political issue for the Chinese authorities. They have to decide on the extent to which Tibet can be opened up to the outside world through land connection.
What Nepal has to give?
- Nepal’s infrastructure and connectivity projects will have to be subjected to Chinese ‘One Belt, One Road’ (OBOR) priorities.
- Nepal will also have to “facilitate” and “encourage” Chinese investment
- Most of the Chinese commitments are loans, of which only 25 per cent will be interest free.
- Nepal must also be aware of the unease and discomfort that countries like Sri Lanka and Myanmar experienced in their deepening economic engagement with China.
Roadblocks in effective implementation of this agreement
- Beijing doubts whether the Oli government will last long enough to implement the agreements inked, in view of the rising calls for a national government in Nepal.
- China would not like to antagonise India as India is a much bigger and promising market for Chinese products and services as compared to Nepal.
What India can do?
- India has to sit up and take a serious note of the Chinese push into South Asia, which is not simply limited to Nepal but covers all other neighbours as well.
- India has to deal with its immediate neighbours with prudence and sensitivity and ensure that they are not alienated.
- India should explore the possibility of making calibrated use of the region’s infrastructure development under OBOR.