Nepalese Prime Minister K. P. Sharma Oli made his maiden foreign visit to India in February, and thus has upheld an unwritten convention in the relations between the two countries which are tied by a security pact and friendship that goes back to several centuries. And last month, in March, he made his second foreign visit and this time the destination was China with which he has developed good equation at the personal level over several years because of his commitment to Communism.
Oli’s visit to India sought to bring an end to the five-month trade blockade, including of fuel supplies, mounted by the United Democratic Madhesi Front (UDMF) in the southern Terai region of Nepal. India denied allegations it was behind the UDMF’s disruption of supplies, but renewed its advice to Kathmandu: make constitutional amendments to address the “legitimate aspirations” of all sections of the population, including ethnic Madhesi.
During his six-day visit to New Delhi from February 19, Oli declared the main purpose of his trip was to clear the air of “misunderstanding” between the two countries. Several bilateral agreements were signed, enabling Nepal to use more Indian transit points along its border and the Indian port of Visakhapatnam for trade purposes.
However, Oli’s trip did not end tensions between the two countries. India refused to issue a joint statement during the visit, insisting Kathmandu had to “resolve all issues relating to the constitution satisfactorily.”
Oli’s trip to Beijing, from March 19 to 26, was clearly aimed at opening up closer economic relations with China as an alternative to Nepal’s heavy dependence on India. He signed several economic agreements, including on transit, trade, aviation, energy, infrastructure development and banking.
In the joint statement issued by the Chinese and Nepalese prime ministers, Beijing declared it “welcomed” Nepal’s new constitution, adding “the China and Nepal relationship has reached a new height.” In return, Nepal reiterated its commitment to a “one China policy” and not to allow its territory to be used for “any anti-China or separatist activity”—a reference in particular to Tibetan exiles.
Addressing a forum of Chinese businessmen, Oli declared Nepal open for “investment in almost every sector,” including manufacturing, hydropower, tourism, services, IT, mining and agri-based industries.
Under the new deals signed, China agreed to open more transit points for trade and allow Nepal to use Chinese ports for trade. It has also proposed building an oil pipeline from China to Nepal, an international airport for Pokhara at a cost of $US216 million and a new bridge at the border town of Hilsa. Steps were also taken toward a free trade agreement between the two countries.
After Oli returned to Kathmandu, Nepalese army chief General Rajendra Bahadur Chhetri left for a weeklong visit to Beijing to strengthen military ties.
In an editorial just before Oli’s visit to China, the Kathmandu-based My Republica commented: “Up until now people here felt they had no alternative to putting up with the temper tantrums of the Indian establishment: either the vital necessities had to be imported via India, or not at all. So the new trade and transit treaties with China come as a big boost to the Nepali psyche.”
An article in China’s state-owned Global Times sought to play on this sentiment in Nepal, saying that New Delhi “should wake up to the fact that Nepal is a sovereign country, not a vassal of India.” It continued: “Instead of being forced into becoming a strategic barrier against China, Nepal should be better treated and act as a bridge between Beijing and New Delhi.”
It is tempting to say henceforth Nepal is going to come under China’s sway. But such a conclusion may not hold ground on close reading of the fine print on the accords signed by Oli in Beijing. This is because China has not openly committed to do Nepal’s bidding be it road or rail connectivity or oil supplies. Yes, these MOUs offer talking point, not Yuans which are in short supply.
On March 30, when Prime Minister Narendra Modi was in Brussels for a EU-India summit, a joint statement called upon the Oli government to reach “a lasting and inclusive constitutional settlement in Nepal that will address the remaining constitutional issues in a time bound manner, and promote political stability and economic growth.”
In a speech to the Carnegie Endowment on April 6, Foreign Secretary S. Jaishankar declared India is pursuing a “neighbourhood first policy.” He said there are no problems with Bangladesh, Bhutan and Sri Lanka. India is also in a “transition” with Myanmar, well poised to engage the incoming government. But in Nepal and Maldives, he said, “there have been challenges that arose from their domestic policy.”