Nepal Prime Minister Deuba recasts bilateral ties on his India visit

At a time when India’s neighbourhood is roiled in turmoil, Prime Minister of the Himalayan country, Nepal, made traditional first port of call to New Delhi. Nepal Prime Minister Sher Bahadur Deuba who took charge in July 2021 following domestic political bickering for the fifth time, arrived in India on a three-day long visit on April 1^st. This visit is the first by a Nepali Prime Minister in four years since the aftermath of the boundary row and assumes great significance in terms of bolstering the Indo-Nepal friendship.

Nepal’s objection to the inclusion of Kalapani in India’s political map in November 2019 and inauguration of link road to Mansarovar through Lipulekh in Pithoragarh in May 2020, stoked tensions between the two countries. Asserting its claims over the region Nepal Prime Minister KP Sharma Oli released a new map containing Indian territories of Lipulekh, Kalapani and Limpiyadhura as part of Nepal. This border dispute eventually impaired the bilateral ties.

Nonetheless, despite the diplomatic low during Oli regime, India gifted 1 million Covishield vaccines in January, just a week after New Delhi unrolled its domestic vaccination program and extended promised grant assistance for reconstruction of educational institutions¹. India initiated rapprochement efforts which included India’s foreign secretary’s visit to Kathmandu and conferment of honorary “General of Indian Army” on Nepal Army Chief Prabhu Ram Sharma by President Ramnath Kovind. Additionally, in December 2021, India announced reconstruction of 50,000 houses devastated by the 2015 earthquake.

Keen on resolving the border row that plagued the bilateral ties, in the joint press conference, Deuba urged India to resolve the issue through existing border mechanism. In response, Modi expressed concerns over the threats due to misuse of open borders. The recent attacks on the Gorakhnath temple and reports of the accused fleeing and staying in Nepal suggested that Modi’s fears aren’t unfounded. Though border discussions didn’t figure in the joint statement both sides agreed to avoiding the politicisation of the border issue. Aside the border issue, signalling a major reset in ties, countries have unveiled a “Joint vision document for cooperation in power sector”².

This includes joint development of power projects in Nepal, cross-border power transmission infrastructure, bi-directional power trade, coordinated cooperation of national grids, institutional cooperation in sharing of latest know-how. For long, Nepal complained of India’s reluctance on transit arrangement for energy. Swiftly turning its focus to implementation of projects and a productive sub-regional cooperation, India bolstered energy cooperation between two countries.

Nepal is a power surplus country now and India is readying a blueprint for a multilateral energy partnership and cooperation among the BBIN (Bangladesh Bhutan India Nepal) countries. Keen on tapping the benefits of the hydropower sector- strengthening economies generating employment, export earnings and improving industrial and financial capacities countries agreed to prioritise the expeditious finalisation of detailed project report of Pancheshwar Hydropower project.

In a massive fillip to connectivity projects, countries have unveiled first broad-gauge cross border rail link of 35 km between Jayanagar in Bihar to Kurtha in Nepal, inaugurated 90 km long 132Kv Solu corridor transmission link line built with Indian Line of Credit of Rs 200, launched RuPay card in Nepal and reviewed the progress of construction of 132 health centres as part of $50 million reconstruction grant.

Nepal joined the International Solar Alliance becoming the 105^th country. Countries exchanged MoUs on enhancing technical cooperation in railway sector, supply of petroleum products and technical expertise between Indian Oil Corporation and Nepal Oil Corporation³.

India expounds Nepal as pillar of neighbourhood first policy and both countries enjoy a cordial relationship with deeply intertwined civilisational, religious and cultural connect. Expediting timely delivery of projects, building rapport with top Nepali leaders and invoking the common heritage, India is reviving the cordial relations worsened by the 2015 economic blockade. Indeed, BJP’s Vijay Chauthaiwale travelled to Nepal several times in 2021 to cultivate the top Nepali Congress leaders.

Since 2015 Beijing has been cutting its way into what is considered India’s traditional sphere of influence, Nepal strategically through BRI, striking an ideological connect with the major leftist leaning political forces and culturally through Buddhist pilgrimage trails. China’s interference in Nepal’s domestic politics drove wedge in the Community party which ultimately led to the dethroning of Prime Minister KP Sharma Oli. Nepal is now growing weary of China and its BRI which has been a non-starter and is encountering severe backlash from people.

Deuba’s bilateral visit has another geostrategic aspect, besides the core border dispute agenda. With the ratification of MCC (Millennium Challenge Corporation)-Nepal Compact, Beijing adjudged geopolitically neutral Nepal to be siding with the US. US introduced the Millennium Challenge Corporation in 2004 to aid economic development of Least Developed Countries (LDC) and developing countries. The US and Nepal initially signed an agreement for a $500 million MCC-Nepal Compact in 2017. But its ratification was delayed due to lack of domestic political consensus. Nepal which is basically a leftist dominated country has been distrustful of America’s aid programs.

Tending to Nepal’s latent American scepticism, China has fanned a huge disinformation campaign against the MCC. Consequently, US diplomats made a beeline to Nepal. Amid huge protests believed to be engineered by China, the US issued a 12-point Interpretive Declaration mollifying the concerns of the protestors. Washington assured that MCC-Nepal Compact is not above the Nepal Constitution and not part of America’s Indo-Pacific strategy. Subsequently, the parliament ratified the MCC with a whopping two-thirds majority.

While the MCC is yet to take off, China believes that MCC could counter China’s BRI as the grant pledges to aid energy and connectivity infrastructure. Nepal joined BRI in 2017 but none of the Chinese projects made substantial progress. Besides, the burgeoning trade deficit with China, closure of the border check points and halting of international flights during Covid, non- resumption of courses for Nepali students studying in Chinese universities and Beijing growing interference in domestic politics widened the growing thaw in the Sino-Nepal relations.

MCC has further compounded tensions in Sino-Nepal relations. US presence in the Himalayan country will critically undermine the Chinese ability to dominate the landlocked country. Beijing unequivocally expressed its displeasure over the MCC since the projects under MCC could strengthen the cross border transmission of electricity between Nepal and India.

Post-ratification of MCC, Beijing influenced Nepal to accept loans under BRI. But Deuba preferred grants or soft loans or concessional loans of less than 2% interest instead of Chinese loans. To improve the bilateral ties, Wang Yi visited Kathmandu and signed nine agreements which are actually reworded unimplemented project agreements and pledged economic and technical cooperation, feasibility studies of China-Nepal border projects and power transmission.

With the MCC, Nepal has now become part of great game, where three powers would jostle for influence. Sandwiched between India and China for long Nepal played Chinese card against India and vice-versa. Given the rivalries between US and China, India and China, Nepal has to carefully balance its relations now. But in part the strategic convergence of interests between India and US should stand New Delhi in a good stead in countering Beijing’s influence in its immediate neighbourhood.

Heading the government, in an election year, Deuba aims to cater to the domestic Hindu sentiments. Striking cord with the “astha” of Nepali Hindus, Prime Minister Deuba visited Kashi Vishwanath dham in Varanasi. At the recently concluded World Hindu Conference at Kathmandu, Nepal’s Minister for Culture and Tourism said that all demands to make Nepal a Hindu Rashtra will be considered. He added, “as the present five-party coalition government enjoys close to two third majority in Parliament, the demand to declare Nepal a Hindu state can be put into referendum”⁴. Largely deemed as an attempt to woo the nationalist Hindu sentiments of the majority in the Nepal, set out to capitalise on this fresh revivalism, Deuba spend a day in Varanasi.

Among the other aspects, analysts are now scrutinising a major departure from the official protocol in Deuba’s itinerary which included a visit to BJP headquarters on the first day of his visit to meet the party President. Largely believed to be an offshoot of Indian National Congress, Nepali Congress is considered to be close to Congress and Socialist outfits in India. But this coziness with BJP party has elicited criticism from Indian commentariat.

Ongoing Sri Lankan economic crisis has indeed, alerted the region of the ramifications of gross economic mismanagement. India is often accused of its ‘Big Brother attitude’ towards its smaller neighbours. But the pandemic and India’s timely outreach has inadvertently unravelled the modus operandi of the two big powers in the region. While India can’t match the huge pockets of China, India’s development for all approach has been immensely beneficial to countries in its neighbourhood.

Echoing India’s certitude, laying foundation stone for Shainya Dham at Dehradun, Defence Minister Rajnath Singh said, “some forces are trying to disturb our relationship with Nepal, a country with whom we share the relationship of roti-beti. We will never allow this. If we need to bow our heads, we will do it. But we will never break our ties with Nepal”⁵.

By shifting focus on connectivity and geo economics, India is traversing a right trajectory of multi-faceted bilateral cooperation. Accompanied by a large delegation on his three-day visit Deuba has apparently attempted to revive and recast the ties to build an enduring and robust bilateral partnership with India.  

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