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India and Nepal are not only linked due to the proximity of land, but it is the cultural affinity that binds the two nations. The common linguistic and ethnic identities, Hindu religious practices, similar festivals, affinity of food, resemblance of dresses, and the overall way of thinking, all make inseparable ties between India and Nepal. Added to this range of similarities and affinities, is the presence of many prominent Nepali political leaders that have their ancestors or relatives in India. Some view this as a domination created by well thought moves of the Indian government since Independence; while others regard it as historical civilizational inter-linkages. No matter with what lens one looks at it, the relationship between India and Nepal is an age-old deeply inter-connected relationship. Yet, a recent visit to Nepal will make Indians feel strangers in a foreign land. It will come as no surprise that most of the Nepali businessmen now prefer to speak Chinese rather than Hindi, and prefer Chinese tourists over Indian. Why such a change? Will this closeness of Nepal with China impact India-Nepal relations? What if Chinese government strongly influences Nepali government? Is Chinese government using soft power tactics to strategically link Nepal with China? These are the most haunted apprehensions of the Indian government and are not without any basis.

At a recent Seminar organized by HNB Garhwal University on India-China Relations, Prof. Lok Raj Boral, Executive Chairman of the Nepal Centre for Contemporary Studies, stated that “Nepal is developing ties with China, but this has no contradiction with Nepal’s relations with India. It is purely based on a win-win situation for all sides as Nepal is just exploring economic opportunities with China”. Do economic opportunities refer to the goods China is dumping in neighbouring states? Or does it refer to the military assistance, which China is overwhelmingly offering to Nepal in order to counter the role of any regional power to be active in the soil of Nepal, a direct counter-measure against India.

Flash back of history will take historians to dwell into the border conflicts that resulted in Nepal-Tibet-China war (1789-1792) over territorial dispute. Further advancement in time will give even grimmer picture of Nepal-Tibetan war of 1855 that was concluded in 1856 with the Treaty of Thapathali with the special status of China as a mediator. Thereafter, by the early 19th century, Nepal broke all relations with China. Can such hostile relations shake the foundation of two thousand year old ties between India and Nepal? Not really, unless we see the developments of Nepal-China relations in the present times and reassess the grounds on which the current relations are established.

Nepal and China resumed diplomatic relations in the mid 1950s. The basis of signing the Treaty of Peace and Friendship in 1960 was Nepal’s recognition of Tibet as a part of China and a resolution to the long-standing border problem. Thereafter, China has constantly spread its sphere of influence on the Himalayan Kingdom by expanding greater economic linkages and extending substantial military assistance to Nepal. In the 1970s, when King Birendra of Nepal proposed Nepal as a “zone of peace” between India and China, India did not show keen interest, while China was quite supportive. These and many such issues created a rift in Nepal-India ties; while at the same time China has been pro-active to support and aid Nepal.

Although Nepal and India have an open border and free mobility of populace across borders; it is China that is increasingly working to take over India’s position of the largest trading partner of Nepal. In 2011-2012, India-Nepal trade was USD 3 billion and the total volume of trade between Nepal and China amounted to USD 1.2 billion. To enhance these ties, China has offered zero-tariff treatment to 60 per cent products of Nepal. Simultaneously, there is added emphasis on boosting cultural exchanges. There are now almost 19 China Study Centres (CSC) and Confucius Institutes in Nepal to promote Chinese language and culture. The aim now is to have a comprehensive cooperation that serves mutual development and prosperity with the promotion of trade and tourism, joint border management, development of hydropower projects, building infrastructure for greater connectivity, and bring in overall socio-economic growth of Nepal.

For Nepal, China serves as a potential supplier of goods and assistance that it badly needs in order to recover its economy. Almost half the population of Nepal is unemployed and more than half is illiterate. At the same time, more than 30 per cent of the people in Nepal live in abject poverty. To deal with its internal problems, Nepal surely has serious business to engage with China. However, China also has deeper motives than just business cooperation. The Tibetan community in Nepal is a serious concern for the Chinese authorities. In particular, the clandestine operations that have its roots in Nepal pose greater challenges for the unity of China’s southern periphery. In April 2008, China could use its influence on Nepalese administration to crackdown on Tibetan activities. Hence, it is not wrong to posit that China’s business ties are redefining the power equations with that of Nepal.

China’s open diplomatic policy in Nepal remains to exploit the resources of Nepal and take advantage of Indian market. Hence, it has recently completed 22-km road in central Nepal connecting its southern plains with Kyirong, county of Tibet, making the shortest motorable overland route between China and India. Besides, it has been active to engage itself in the Nepal-China-India trilateral meeting for enhancing trilateral cooperation, which was held in January this year. One of the major focuses of the meeting was energy projects based on trans-country power trade agreement, which allows free trade of electricity among Nepal, China, and India and through a regional grid connected to all the countries.

While China’s relations with Nepal grow, resentment against India is on the rise. Nepali sentiments that India has expansionist tendencies are gaining ground. In particular, the Chinese economic clout over Nepal is giving space for open antagonistic view against India. On January 9, 2013, at the inaugural session of the 6th General Assembly of the Nepal Communist Party (Maoist) in Kathmandu, Chairman Mohan Baidya Kiran stated, “China respects Nepal’s sovereignty unconditionally, while India has set an evil eye… there exists several unequal treaties between the two countries.” Such concerns were also for the first time openly expressed by the Indian side at the end of last year when Pranay Sahay, Director General of Armed Border Force Sashastra Seema Bal after an India-Nepal border meet told the press that the Chinese activities in the southern part of Nepal have increased. Nepal is also increasingly become concerned over the trade deficit it has with India, which has surged to 33.7 per cent. The unsettled India-Nepal border remains as a thorn in India-Nepal relations. Yet, Nepal wants to maintain a tricky balance between the unequal rising powers in its neighbourhood.

It is of urgent need that India relooks its policy options and cooperative ties with Nepal. Although, there is no immediate threat to India’s relations with Nepal, but a cautious approach and reassessment of this relationship is the need of the hour. A benign factor that can work to India’s advantage is the decline in China’s economy, which demoralises China to remain as a constant supplier of monetary aid to Nepal. If India cashes on this opportunity to rework its relationship with Nepal, it has greater choices in terms of its proximity and close affinity with the Nepalese.

(The writer, Dr. Geeta Kochhar, is Assistant Professor, Jawaharlal Nehru University,New Delhi, India. Views expressed are her own. Email: )

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