How Nepal and India Can Keep Their Relationship

China will emerge as an occasional irritant in Indo-Nepalese relations, tempting Nepal to play the ‘Beijing card’ against India.


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As China rises formidably across the Himalayas, and is for the first time able to match its supportive statements with actual resources to reduce Nepal’s reliance on India, Kathmandu will naturally be tempted to play off Delhi against Beijing. This changes the fundamental nature of India-Nepal relations and requires both sides to recalibrate their “special” relationship.

Prime Minister Sher Bahadur Deuba’s visit to India this week marks the beginning of this process. To succeed in their endeavour to chart a mutually beneficial and sustainable partnership, both countries will have to take a deep look at history to avoid past mistakes. Bottom line, Kathmandu will have to avoid the temptation of overbalancing and, conversely, Delhi will have to resist its compulsion to control and micromanage.

History homework for Kathmandu

Nepalese non-alignment is far from new. Recalling Kathmandu’s attempts to diversify diplomatic relations in the late 1950s, Jagat Mehta recalled that “we should not have been surprised when we were flattered by imitation and Nepal got tempted to adopt a sub-continental variant of non-alignment between two powerful contending neighbours.”

The art of balancing has since then been developed and skilfully mastered by each and every political actor in power in Kathmandu, whether royal absolutists, pro-India constituencies or Maoist insurgents. To attract attention or extricate concessions from India, Nepal quickly realised the benefits of playing the “China card” – going to Beijing, or threatening to do so, was the quickest way to get something from Delhi. While such shrewd Nepalese behaviour has often worked in the past, it will face new challenges as the Asian balance of power shifts and the prospects for Sino-Indian conflicts increase. Nepal will have to take special caution on three fronts.

First, Kathmandu will have to resists the myth of “equidistance” between Beijing and New Delhi and realise that the imperatives of geography and an open border warrant an “India first” policy on key security matters. With an eye on China, Jawaharlal Nehru thus emphasised in 1950 that “as much as we appreciate the independence of Nepal, we cannot risk our own security by anything going wrong in Nepal which either permits that barrier [Himalayas] to be crossed or otherwise weakens our frontier.”

China will emerge as an occasional irritant in Indo-Nepalese relations, and while Kathmandu will continue to do what it can as a small state, New Delhi will also continue to do what it must as a regional hegemon. Beyond such inevitable tensions, however, it is also up to Nepal to find sophisticated ways to play the balancing game just below the threshold at which India decides to move into a hostile mode.

More than Nepalese balancing, it is the manner in which it is conducted that often ticks off India. For example, caught by surprise after then Nepalese Prime Minister T.P. Acharya’s visit to China in 1956, to sign the Sino-Nepal General Friendship Agreement that recognises Chinese sovereignty over Tibet, Nehru vented that “they (Nepal) have not only bypassed us and practically ignored us, but have done so with discourtesy.” History shows us that Nepal’s attempts at deception or decision to cut off communication channels with New Delhi, as King Birendra did after 1988 and King Gyanendra in 2005, will tend to unleash Indian hostility with lethal consequences for any regime in Kathmandu.

Conversely, the strongest periods in the bilateral relationship have been marked by a candid discussion on mutual concerns and symbolic gestures. Deuba’s decision to make India his first visit abroad and Kathmandu’s reported willingness to consult with India first before signing on to China’s Belt and Road Initiative (BRI) signal that Nepalese leaders are now committed to keeping India in the loop and thus preserve the “special” quality of the bilateral relationship.

Second, in its legitimate and natural enthusiasm for China, Nepal will also have to realise that like free market economics, there are also no free lunches in geopolitics. Beyond China’s idealist narratives of “win-win,” all countries are driven by cost-benefit calculations and cold interests as astutely realised by Nehru himself when, in 1952, he opposed the opening of an American Library in Kathmandu on the simple grounds that “it is rather naïve to think this can come without any conditions or strings being attached to it.”

Jawaharlal Nehru with B.P. Koirala in 1960. Credit: Photo division

Jawaharlal Nehru with B.P. Koirala in 1960. Credit: Photo division

Beijing’s current promises of support for Nepal will thus also come with a price. The cases of Myanmar and Sri Lanka since the 2000s reflect the Chinese modus operandi with all its devastating consequences, as grandiose infrastructure projects quickly turned into liabilities for the host countries, increasing their debt and, in turn, allowing Beijing to convert its financial clout into political leverage. Bangladesh is the newest target in South Asia, following President Xi Jinping’s big announcement of more than twenty billion US$ worth in grants and loans. Nepal is certainly next in line and the sooner it prepares for China’s financial juggernaut, the better.

Besides such long-term consequences of Chinese economic assistance, Kathmandu would also do well to remind itself of the risks of banking on Beijing to bail it out of Indian pressure. Past crises – whether in the late 1980s or mid-2000s – show that when Delhi and Kathmandu are on a collision course, China will eventually back off and defer to India, leaving Nepal out in the cold. When developments spiral out of control, successive Nepalese leaders returned empty-handed from Beijing.

While a more powerful China is now willing to hold Nepal’s hand much longer in such situations – as during the 2015 blockade, when it offered Nepal alternative fuel supplies – it will continue to let go as soon as the costs of jeopardising relations with India outweigh the benefits of supporting Nepal. Successive generations of Nepalese leaders have, therefore, been politely cold-shouldered with typical Chinese aphorisms such as “there are two sides to a mountain, and you should always know on which side you are on” or “distant waters don’t help put out a fire on your doorstep.”

Third, while India has signalled its intent to put Nepal’s constitutional issue on the back burner in the interest of immediate economic and geo-strategic imperatives, Kathmandu should be under no illusion that the issue is off the table forever. In 2015, New Delhi may as well have failed on clear communication and used inadequate forms of pressure that were resented in Nepal, but that does not take away India’s genuine concerns about the need for deeper socio-political reform and decentralisation to avoid a protracted conflict and possible radicalisation in the Terai lowlands.

Few other issues have been as consensual in India’s foreign policy as the need for political liberalisation in its neighbouring countries to promote stability and security across the region. Speaking at the height of the 2006 crisis, as King Gyanendra held on to authoritarian rule, India’s then foreign secretary Shyam Saran reiterated that “it has always been our wish to seek peace and prosperity in Nepal because stability in Nepal is in the best interests of India [and] democracy in Nepal is the best guarantee of such stability.”

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Similarly, while on a visit to Kathmandu in 1990, shortly after the first Jana Andolan succeeded in ending absolutist rule, then external affairs minister P.V. Narasimha Rao quoted from Goswami Tulsidas’s 16th-century Awadhi epic to caution that “a King whose subjects are in pain, deserves hell” and to nudge Kathmandu’s monarchy to focus on the “consolidation of the democratic process.” In India’s strategic thought, such consolidation required going well beyond formal elections, instead reforming the basic character of the Nepalese state, fostering more representative, decentralised and pluralist institutions.

Passengers ride on a cart as they arrive from India, at the Nepalese-Indian border during a general strike called by Madhesi protesters demonstrating against the new constitution in Birgunj, Nepal November 5, 2015. Credit: Reuters

Passengers ride on a cart as they arrive from India, at the Nepalese-Indian border during a general strike called by Madhesi protesters demonstrating against the new constitution in Birgunj, Nepal November 5, 2015. Credit: Reuters

It is under this light that one must understand India’s concern about the exclusive and majoritarian clauses of the new constitution and its sympathy for Madhesi demands. Unlike what many Nepalese nationalists may like to believe, this concern is not new, nor is it a tactical excuse to interfere in Nepal. Writing to his Secretary General, in 1951, Nehru had presciently warned that “there is far too much of a tendency to think in terms of Kathmandu and rather to ignore the hill people and, more especially, the Terai” and that “this is very unwise and is bound to trouble in the future.” Such trouble is today a reality across the Terai and will continue to shape India’s approach to whosoever is in power in Kathmandu.

Five Himalayan lessons for New Delhi

As Nepal continues to experiment with non-alignment and China steps up to project power across the Himalayas, India cannot afford to sit back and rely on past successes to keep its small neighbour under its exclusive zone of influence. New Delhi is thus witnessing a painful adjustment process, requiring even greater strategic acumen on four fronts.

First, as emphasised by Prime Minister Narendra Modi, India will have to focus on connectivity as a leverage to increase its strategic influence in the neighbourhood. For almost half a century, India’s economic insulation transformed its borders into barriers. Brushing off Indian concerns about Nepal’s first road link to China in the 1960s, Nepal’s King Mahendra derisively noted that “Communism won’t arrive in a taxi.” Similarly, todays investors or spies from China do not require a train to cross the Himalayas and infiltrate India. While New Delhi has genuine concerns about the BRI, unlike the Pakistan and Myanmar legs that risk isolating India, the trilateral India-Nepal-China corridor offers an interesting opportunity for collaboration to test Beijing’s flexibility and, at the same time, get Kathmandu on board.

Second, while dealing with its smaller neighbours, India will have to abandon the archaic principle of right of first refusal and invest in expanding its capacity of first delivery. With China as a credible alternative – whether to invest in infrastructure, hydropower or military modernisation – Nepal no longer needs to wait for India. Delhi will have to get used to Kathmandu’s new “first-come, first-served” principle. Indian delays and low-quality resources will no longer be tolerated. By reviving the Gujral doctrine and India’s willingness to provide non-reciprocal, unilateral, and preferential benefits to its smaller neighbours, the Modi government has signalled intent to position India as a credible and leading power across the region.

K. Subrahmanyam. Credit: Wikimedia Commons

K. Subrahmanyam. Credit: Wikimedia Commons

Third, India must abstain from overreacting to China’s inroads into Nepal. As strategist K. Subrahmanyam emphasised back in the 1980s, while it is natural that the “Indian attitude will harden” at the immediate prospect of rising Chinese influence, New Delhi must take a “relaxed view,” because “in the longer run the imperatives of geography, cultural affinities, international politics … will bring home to our neighbors the facts of life and of realpolitik.” This should, however, not lead to complacency – rather, New Delhi will have to draw red lines, which former foreign secretary Muchkund Dubey referred to as India’s regional ‘Lakshman rekhas’.

More than defining what Nepal should not do, New Delhi will have to communicate such expectations more clearly. History shows that India will often assume that the Nepalese government is deliberately acting against its advice when, in fact, New Delhi never communicated such concerns in the first place, or did not articulate them forcefully enough. For Subrahmanyam, this warrants an India that is more comfortable to act commensurately to its predominant power in the region: “an elephant trying to behave like a rabbit or a deer will not get accepted as such.”

Finally, India will have to grow a thicker skin against Nepalese nationalist rallying cries against India. To most Nepalese, the Chinese grass across the Himalayas will naturally look greener than that on India’s Gangetic plains. Especially while in opposition, political leaders in Kathmandu will keep tapping into anti-India feelings to mobilise electoral support, a behaviour that India must understand and endure. Nepal’s first democratically elected leader, B.P. Koirala, thus recalled that in 1959 Nehru was surprisingly “considerate” of his need to occasionally play the China card in order to dismiss accusations of being a subservient “lackey” to Indian interests. He recalls the Indian prime minister’s message that “if it helps you to create a nationalist image for yourself by taking us (India) to task, you are welcome to do that, because we do not want to destroy your image as a nationalist.”

This week’s visit by Deuba to India marks the advent of a new phase in India-Nepal relations, with a more confident Kathmandu engaging India eye to eye. Similarly, the visit also confirms the normalisation of the relationship after some hiccups since 2014 and India’s willingness to focus on transactional business with special emphasis on connectivity as a credible partner. While shaping the new terms of their “special relationship” and focusing on the future, Delhi and Kathmandu will also have to keep learning from history to navigate the road ahead.

Constantino Xavier is a fellow at Carnegie India and tweets at @constantinox

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How Nepal and India Can Keep Their Relationship

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