Editorial: Nepal in China’s strategic embrace
Kathmandu’s thrust on greater economic cooperation with Beijing — the BRI is part of this endeavour — will whittle down India’s influence over Nepal
India has every reason to be alarmed over the developments in Nepal in the light of its steadily tightening embrace of China. Known for his ideological affiliation with China, Nepalese Prime Minister KP Sharma Oli is unabashedly aligning his country to serve Beijing’s strategic interests. The latest indicator of China’s growing sway over the tiny Himalayan nation came with the signing of a framework for cooperation on the ambitious Belt and Road Initiative (BRI) in Nepal. The agreement was signed during Oli’s visit to Beijing early this month, apart from nine other pacts. This is a big setback to India which is strongly opposed to the BRI on grounds of sovereignty as it passes through the parts of Pakistan Occupied Kashmir (PoK). This deal will enable China to increase its already considerable inroads into Nepal. Kathmandu’s thrust on greater economic cooperation with Beijing — the BRI is part of this endeavour — would also whittle down India’s influence over Nepal. The BRI framework agreement, incidentally, also envisages the opening of branches of Chinese banks and financial institutions in Nepal. India has traditionally had deep economic linkages with Nepal, nurtured due to geography — the two neighbours share a porous 1,751-km-long border. This, along with the landlocked nature of Nepal, has helped India become its largest trading partner. During the 2022-23 fiscal, bilateral trade was pegged at $8.85 billion. This included $8 billion of exports from India to Nepal. As per the Nepal Rastra Bank, India’s share in Nepal’s trade accounted for 64.1% in 2022-23.
The latest Beijing-Kathmandu tango has the potential to cause unease not just in India but also in the United States. While America had managed to get Nepal on board its own Millennium Challenge Corporation (MCC) Compact to fund Kathmandu’s power and transport infrastructure, the BRI seems far broader. With the latest deal with Beijing, Nepal would be hoping that the 10 initial projects, including those meant to boost regional connectivity, will now see the light of day. The Oli government’s encouragement of Beijing’s concerted moves to claim Buddhism as a shared heritage is another cause for concern for India, which has been making efforts to build on its shared Buddhist heritage with Nepal. Ever since his dramatic comeback to power in July this year, under the watchful eyes of China which brokered a peace deal among the Communist parties, Oli, Chairman of the Communist Party of Nepal (Unified Marxist-Leninist), has been warming up to Beijing. In his tenure as Prime Minister in the past, he was known for his pro-China views and this was evident from the foreign policy outlook of his leadership of the CPN-UML too. Oli has served as the Prime Minister of Nepal on two occasions, from 2015-2016 and 2018-2021, before being ousted by the country’s Supreme Court in a controversial ruling.
