External affairs minister Sushma Swaraj’s maiden visit to Nepal last week was an important opportunity to recalibrate Indo-Nepalese ties and lay the foundation for prime minister Narendra Modi’s visit from August 3—the first bilateral visit to Nepal by an Indian PM in 17 years. Nepalese polity, cutting across party lines, had welcomed the assumption of power by Modi, with most expressing hope that Nepal would be a beneficiary of Modi’s development agenda. Swaraj’s visit managed to convey the right message by settling a long-pending issue as she promised a review of the 1950 Treaty of Peace and Friendship within two years on the basis of recommendations from a group of eminent persons from both nations. She also co-chaired the Nepal-India Joint Commission that met after 23 years and reviewed the bilateral ties holistically. The Modi government now has an opportunity to reshape the contours of New Delhi’s relations with Kathmandu and it should lose no time in doing that, especially as India seems to be losing ground in Nepal to China.
“A yam between two rocks” was how the founder of Nepal, Prithvi Narayan Shah, described the Himalayan kingdom, given its pivotal geostrategic location landlocked between China and India. In 1955 Nepal established diplomatic ties with China, recognising Tibet as part of China in 1956. Since the mid-19th century, Tibet, rather than Nepal, had served as India’s buffer with China. The role of this buffer passed on to Nepal after the Chinese annexation of Tibet. It became imperative for New Delhi to deny China direct access to Nepal because of the vulnerability of India’s Gangetic Plain containing critical human and economic resources. India’s growing influence had grave implications for China’s security considerations, especially as regards Tibet. Thus, preserving the balance of power in southern Asia in its favour and securing Nepal’s active co-operation to prevent its rivals’ use of the nation for anti-China activity became principal strategic objectives of Beijing’s Nepal policy.
The 1950 treaty enshrined the close relationship between India and Nepal (including co-operation on trade, transit, defence and foreign affairs) and constrained Chinese options in Nepal. As China’s economic and political profile rose, it slowly began to increase its influence in Nepal, and Kathmandu, wanting to counterbalance India, was keen to leverage China in its dealings with New Delhi. By supporting Nepal’s position during most disputes between that country and India, China was able to project itself as a benevolent power in comparison with India’s supercilious attitude towards its smaller neighbours. Nepal signed an arms pact and secret intelligence-sharing agreement with China in 1988 which elicited strong reaction from New Delhi, leading to the imposition of an economic blockade on Nepal in 1989-90. Despite this, Sino-Nepal ties continued to evolve with Nepal importing Chinese weapons and cultivating extensive military co-operation in a move to reduce dependence on India.
The Maoists came to power in 2008, made clear their intention to renegotiate the 1950 treaty, but collapsed before they could accomplish it. Since then, in a bid to cover its bases in a fractured political environment, China has reached out to all the political parties in Nepal, while demanding that Nepal recognise the annexation of Tibet and repress Tibetan activists within Nepal. Kathmandu has obliged, making it clear it won’t allow any group to use Nepal’s territory for anti-Chinese activities. As a result, restrictions have grown for 20,000 exiled Tibetans in Nepal, with even the birthday celebrations of the Dalai Lama being curbed. The Tibetan spiritual leader lives in exile in India and had a representative in Kathmandu until the office was shut down by the Nepal government in 2005. China has been undertaking development initiatives across Nepalese villages adjoining Tibet, as well as liaising with border security and upgrading police stations at points used by Tibetans to cross into Nepal. The Chinese government hopes this can be used to suppress Tibetan activities in Nepal.
China’s interests and presence in Nepal now go far beyond the Tibet issue. China is projecting its “soft power” in Nepal by setting up China Study Centres to promote Chinese values among a populace otherwise tied culturally to India. China is constructing a 770km railway line to connect the Tibetan capital of Lhasa with the Nepalese town of Khasa, a move that would connect Nepal to China’s national rail network. China is also constructing a 17km road through the Himalayas linking Tibet to the Nepalese town of Syabru Besi which will not only connect Tibet to Nepal but also facilitate the first direct Chinese land route to New Delhi. China views Nepal as a vital bridge toward south Asia. China plans to extend the rail line from Lhasa to Shigatse, Tibet’s second largest city, as far as Kathmandu, and build a new airport at Pokhara, Nepal. By projecting India as a factor of instability and an undue beneficiary of Nepal’s resources, China has used Nepalese sensitivities vis-à-vis Indian influence to good effect. India’s overwhelming presence remains a source of resentment towards India in Nepal. China appears attractive because it can claim that unlike India it is not interested in internal affairs. China has demanded from the Nepal government that it be given the same privilege as India in identifying projects in need and in channeling funds through district bodies.
With the drafting of a new constitution having stalled in Nepal, and political and economic instability causing more uncertainty, India is viewed as being part of the problem, as it is seen as being too involved in its domestic politics. The uncertainty in Nepal has fuelled anti-Indian sentiments and allowed China to enlarge its presence with Beijing even offering lawmakers financial aid in drafting the new constitution. Nepal is going through a crisis and India is being blamed. It is this insecurity that China has been able to exploit to serve its own interests—a trend that is likely to persist.
The Modi government has an opportunity to underscore India’s desire to treat Nepal as an equal sovereign state by expressing willingness to explore the possibility of a transparent review of the 1950 treaty and to explore joint development projects in energy and infrastructure. India has to think big if it wants to retain its privileged position in South Asia and it can make a start with Nepal.
The author is a professor in international relations, department of defence studies, King’s College, London.