Historically India – Nepal relations take us back to over two thousand years into the Maurya empire. However, the India – Nepal Friendship Treaty of 1950 laid the bedrock of formal relations in the modern era.
India-Nepal ties have been undoubtedly umbilical. The ties have withstood periods of undulations and that has simply added more strength to it. China has tried to make some inroads into Nepal which has obviously raised eyebrows about its strategic intention in a country which has been politically, culturally and strategically known to be perennially pro-India. India and Nepal share around 1800 kilometer, almost open border and as a unique gesture, Nepalese citizens are welcome in India to study or work without a visa. Nearly 6 million Nepalese citizens live and work in India and about 600,000 Indians live and work in Nepal.
Historically India – Nepal relations take us back to over two thousand years into the Maurya empire. However, the India – Nepal Friendship Treaty of 1950 laid the bedrock of formal relations in the modern era. This treaty gave Nepalese citizens unparalleled advantages to them almost at par with Indian citizens. However, with China’s growing footprints in South Asia in general and Nepal in particular in terms of infrastructure development projects and trade, India certainly needs to give a serious fillip to the relationship in order to protect its interests.
Nepal, a landlocked country was always seen as a buffer between India and a possibly expansionist communist China. Strategic thinkers of India and Nepal probably realised the need for a good long term symbiotic relationship and thus soon after independence, the Treaty of Peace and Friendship was signed by the two countries in 1950 and same was reinforced in the decade of 70’s when both countries signed several treaties to secure economic interests. Nepal has a huge potential in hydropower generation and India has been very keen on developing and harnessing hydro-electric power from Nepal.
India has also been Nepal’s largest trading partner and leading investment partner for some time now. India has 56% of share in total exports from Nepal in 2017 at $ 420 million which is more than four times the next trading partner which is USA that has $ 83 million.
Similarly, India accounts for nearly 64.95% of total imports into Nepal which in 2017 was $ 6520 million as compared to imports worth $1267 million from China at number two position which are a meager 12.63% of the total imports.
Inspite the imbalance in Indo- Nepal trade which is hugely in India’s favor the trade has seen a constant rise in the last 20 years. India’s share in Nepal’s trade grew from 29% in 1996 to 61.2 in 2015-16. On the other hand China is separated from Nepal not only historically, culturally but also through a huge natural barrier – The mighty Himalayas. However, after the recent success of China Pakistan Economic Corridor(CPEC) and China Myanmar Economic Corridor(CMEC) corridors, China is trying to knock on India’s north by meandering into Nepal by way of developmental projects. As per a report in BBC, a number of private institutions in Nepal have started offering Chinese language courses.
China is also encouraging Nepalese people from learning Chinese. As per this report, a number of Chinese language instructors were also known to have been sent to Nepal for this purpose. It’s a well-known fact that China’s foreign policy is primarily shadowed by its national interest. It aims at maintaining the ‘One China’ policy, maintain the communist party’s position and rule over China and sustain economic growth and development for China for it to become economically and strategically a superpower.
In this regard, China has significant security concerns over the stability of Tibet and this concern is one of the guiding pillars for its engagement with Nepal. Presently, Nepal is having around 20,000 Tibetan refugees. After the protests by Buddhist monks in Tibet in 2008, China has moved to developing closer relations with Nepal so that the country does not provide an easy haven to anti-China separatist activities.
Apart from this, China has also been keen on exploiting Nepal’s huge energy and market potential for trade and investments. While China hasn’t explicitly stated that it is looking to build an economic corridor similar to the CPEC or the CMEC, China has certainly given a fillip to its engagement with Nepal through fresh investments in infrastructure projects along the lines of the Corridors. China has been steadily building up investments in Nepal’s hydropower sector, and the present government restored the $2.5bn Budhi Gandaki Hydroelectric project to China’s Gezhouba Group which the previous government had scrapped.
Furthermore, China and Nepal recently finalised the text of the Trade and Transit Agreement on September 9, 2018 (that was initially signed in March 2016) ending India’s monopoly over Nepal’s supply routes as well as signing a Memorandum of Understanding on the Belt and Road Initiative in March 2017.
Undoubtedly India-Nepal ties which have matured over centuries are not tenuous. However, in order to protect its interests in Nepal from China’s expansion, India must step up its engagement with the Himalayan Kingdom de novo. In this regard, India must focus on developing economic aspect and people to people contact. Economic relations can be fostered through a more equitable approach. Supporting policies that help reduce Nepal’s trade deficit, can go a long way in strengthening the economic relationship. Given the social, religious and cultural congruencies between the two countries that date back generations, India and Nepal are well placed to take this engagement to the next level. Increasing tourism by creating religion-cultural corridors (both rail and road) between the two countries could be one such step to foster such an engagement.
India is having about 32000 Nepalese citizens serving as soldiers in India’s elite ‘Gorkha Regiments’ and almost triple this number as Indian army pensioners in Nepal. India could consider raising some new ‘mixed battalions’ or ‘Army Formations’ with citizens from both countries and allow them to be deployed in Nepal as part of Nepal Army as is being done here. Every year we are training almost 250 Personnel of Nepalese army(NA) in our training institutes. For this purpose, we could also place a Military Training Team(akin to one in Bhutan) which could impart training to larger number of Nepalese officers and soldiers in situ.
Finally, it would be prudent for India to craft a narrative around irresponsible borrowing and the resultant impingement of sovereignty in other smaller countries of the region. This may help keep predatory Chinese investments and thereby Chinese influences at bay not only in Nepal but also other South Asian economies. With such steps, India can hopefully augment the existing trust and minimize any perception gap that exists between the two countries and hopefully set a firm base for future engagements.