Navigating the Geopolitical Terrain: Examining Nepal’s Diplomatic Manoeuvres between India and China

26 March 2023, NIICE Commentary 8597
Keshav Verma

Nepal is a landlocked nation located between the Asian powers – India and China. Nepal’s geopolitical position is complicated and crucial in terms of regional dynamics due to its geographical location. India and Nepal share a border of around 1,850 kilometres and have a profound cultural and historical tie. Nepal is highly dependent on India for commerce, travel, and energy. India is among the largest donor of development assistance to Nepal. Yet, the bilateral relationship between the two nations has been strained at times, particularly in the last several years.

On the other side, China’s Belt and Road Initiative (BRI) and infrastructure projects have increased its influence in Nepal. Due to its closeness to the Tibet Autonomous Region of China, Nepal has also become a crucial area for China’s security objectives. China is Nepal’s second-largest economic partner, and its infrastructure investments in Nepal have increased over the last several years. However, Nepal has not pushed for any Chinese BRI project since there is rising worry that the BRI projects may put Nepal into ‘debt trap’.

Additionally, Nepal’s foreign policy seeks to preserve cordial ties with both of its neighbours, India and China, and it has been successful in achieving this goal. In recent years, Nepal has also endeavoured to broaden its international connections beyond its near neighbours, interacting with the United States, Japan, and the European Union, among others. Nepal’s position has resulted in strong links with both nations, but at times finding difficulties in maintaining a balance between them.

Nepal’s Diplomatic Engagement with Asia’s Giants

Nepal’s foreign policy has been impacted throughout the years by its geographical position and historical and cultural relationships with India and China. The connection between India and Nepal extends back to ancient times. India has been a significant contributor to Nepal’s economic growth through offering aid, technical help, and commercial possibilities. Hinduism and Buddhism are the prevalent faiths in both Nepal and India. Cultural, religious, and historical ties between the two nations have affected their diplomatic relations throughout the years.

Nevertheless, in recent years, India and Nepal’s relationship has been strained for a variety of reasons. The border dispute between the two nations has contributed significantly to the deterioration of the relationship between the two countries. The border issue has resulted in the closure of border crossings, which has had a significant impact on Nepal’s economy. Nepal has also accused India of meddling in its domestic affairs, namely during the 2015 constitution-drafting process. Around the same time period, India’s decision to put an embargo on Nepal further worsened the relationship.

In contrast, Nepal’s relationship with China has improved during the last several years. China has made substantial investments in the development of Nepal’s infrastructure, including highways, hydropower projects, and airports. Nepal’s biggest commercial partner is likewise China, with bilateral commerce between the two nations growing in recent years. Nepal has also signed a number of agreements with China, notably the Belt and Road Initiative (BRI), which seeks to improve regional connectivity and foster economic cooperation.

Concerns have been raised, however, over China’s expanding influence in Nepal, particularly in the political and economic arenas. Others have opposed Nepal’s choice to join the BRI on the grounds that it would become too reliant on China. There are also worries over the effect of China’s infrastructure investment in Nepal on the environment and local inhabitants.

Walking a Tightrope: Nepal’s Diplomatic Balancing Act between India and China

Nepal has walked a tightrope between India and China, attempting to maintain good ties with both nations while protecting its own interests. Nepal has taken care not to irritate India, its greatest economic partner, and has worked to preserve its longstanding relations with the nation. Nepal has also welcomed China’s investment in infrastructure projects and attempted to exploit its connection with China to minimise its economic reliance on India. Nepalese foreign policy reflects the country’s precarious balancing act, which involves trying to get along with both India and China while also looking out for its own interest.

The geopolitical competition between India and China, which has pushed both nations to vie for influence in Nepal, has hampered Nepal’s balancing act. This has included India’s attempts to offset China’s Belt and Road Initiative by supporting its own connectivity projects in Nepal, such as the jointly created India-Nepal Pancheshwar Multipurpose Project. On the other hand, Nepal approved a new Constitution in 2015 that was seen as discriminatory by the Madhesi minority. This resulted in a months-long border blockade by India, which harmed Nepal’s economy and strained its ties with India. During the embargo, China supplied Nepal with much-needed gasoline and other supplies, therefore strengthening its relations with Nepal.

Notwithstanding these obstacles, Nepal has maintained generally balanced ties with both India and China. By participating in communication and collaboration on matters of common interest, including as commerce, connectivity, and regional stability, the nation has endeavoured to preserve its strong ties with both nations. Nepal, for instance, has collaborated with both India and China to encourage cross-border commerce and investment via projects such as the Nepal-China Transit and Transport Agreement, the Bangladesh-China-India-Nepal Initiative (BCIN) and Bangladesh-Bhutan-India-Nepal (BBIN) mechanism.

Conclusion

The shifting regional dynamics over the last several years have made Nepal’s delicate balancing act between India and China all the more difficult. Tensions between India and China have been rising in recent years, culminating in a fatal conflict between Indian and Chinese forces in the Himalayas in 2020 over a territorial dispute. Nepal is caught in the middle of the conflict between India and China, with both sides eager to forge closer connections to Nepal as part of their larger strategic goals. Nepal’s foreign policy requires a careful balancing act in the current global political climate. Nepal should keep its distance from India and China while protecting its own strategic interests. Nepal must also stand firm against Indian and Chinese pressure to choose sides. To guarantee peace and security in the area, Nepal must engage in open and honest diplomacy, strengthen regional cooperation, and establish confidence with its neighbours.

Keshav Verma is a PhD Candidate and a Senior Research Affiliate at the Centre for East Asia, Department of International Studies, Political Science and History, CHRIST (Deemed to be University), India.