China's Geopolitical Initiatives in Nepal
- 30 Sep 2023
- 8 min read
Why in News?
Recently, China and Nepal have signed 12 agreements to enhance Bilateral Cooperation in sectors including trade, road connectivity, and information technology.
What are the Agreements Signed between Nepal and China?
- The agreements include MoUs for:
- Cooperation between The National Planning Commission of Nepal and China’s National Development and Reform Commission
- Enhancing digital economy corporation,
- Cooperation on green and low-carbon development
- Cooperation in the fields of agriculture, livestock and fisheries,
- Cooperation in the field of science, technology and innovation; and in the field of Human Resources Development.
- Mechanism to review the Nepal-China trade and payment agreement.
- They also signed a protocol of phytosanitary requirements for the export of plant-derived medicinal materials for Chinese medicine from Nepal to China.
- Nepal declined China’s invitation to join China’s Global Security Initiative (GSI), advocating that joint security is not in the interest of Nepal to maintain a strategic balance between India, China and the US.
How Have Been China Nepal Relations So Far?
- Geopolitical Relations:
- Nepal has increasingly sought to balance its relations with its two giant neighbours, India and China, as part of its foreign policy strategy.
- China's influence in Nepal has grown significantly in recent years, the almost Six-Month Economic Blockade of Nepal by India from September 2015 onward gave China a fast track into the country.
- China intervened aggressively in Nepal’s politics and played a role in bringing the two communist parties, Maoist Centre and Unified Marxist-Leninist together.
- China has historical ties with the communist movement in Nepal, particularly with the Communist Party of Nepal (Maoist Centre), which was involved in a decade-long armed insurgency against the Nepalese state. During this period, the Maoist movement received ideological, logistical, and even military support from China.
- Economic Cooperation:
- Economic cooperation between China and Nepal has intensified, focusing on trade, investment, and infrastructure development.
- Key projects like cross-Himalayan railways, ports, and hydroelectric power plants are enhancing connectivity and contributing to Nepal's economic growth.
- Nepal has expressed interest in China's Belt and Road Initiative (BRI), aiming to improve infrastructure connectivity and trade facilitation.
- Security and Defense Cooperation:
- China and Nepal have engaged in joint military exercises and increased defense cooperation, focusing on capacity building and military training.
- China has provided military aid to Nepal, further strengthening their defense ties.
- Issue Between China and Nepal:
- In its new map, China refused to recognize a portion of land in Nepal's northwestern region—an area that Nepal had claimed and depicted in its own map in 2020.
What are the Implications of China’s Growing Presence in Nepal for India?
- Security Concerns:
- China's enhanced influence in Nepal could potentially lead to strategic encirclement for India, as it strengthens its presence in a country that shares a long border with India.
- This raises security concerns for India.
- Access to Resources:
- China's infrastructure projects and economic engagement in Nepal may compete with Indian investments and economic interests, affecting India's access to resources and markets in the region.
- Belt and Road Initiative (BRI) and Connectivity:
- Nepal's participation in China's BRI Initiative can result in a significant increase in Chinese-backed infrastructure projects and connectivity, which will increase Nepal's dependence on China for trade and consequently harm the interest of India.
- Challenges in Regional Coordination:
- Nepal's closer ties with China provide strategic depth to China in South Asia, potentially allowing China to project power and influence beyond its borders.
- China's deepening involvement in Nepal might make it more challenging for India to coordinate regional responses and initiatives effectively.
What is the Significance of Nepal for India?
- Nepal's Strategic Importance:
- Nepal shares border with 5 Indian states- Uttarakhand, Uttar Pradesh, West Bengal, Sikkim and Bihar. Hence an important point of cultural and economic exchange.
- Nepal is right in the middle of India’s ‘Himalayan frontiers’, and along with Bhutan, it acts as a northern ‘borderland’ flank and acts as buffer states against any possible aggression from China.
- Defence Cooperation:
- India has been assisting the Nepal Army (NA) in its modernisation by supplying equipment and providing training.
- The ‘Indo-Nepal Battalion-level Joint Military Exercise Surya Kiran’ is conducted alternately in India and in Nepal.
- Also, Currently, about 32,000 Gorkha Soldiers from Nepal are serving in the Indian Army.
- Economic Cooperation:
- India is the largest trading partner of Nepal. Nepal is also India’s 11th largest export destination.
- Indian firms are among the largest investors in Nepal, accounting for more than 30% of the total approved foreign direct investments.
- Treaty of Peace and Friendship of 1950:
- The treaty talks about the reciprocal treatment of Indian and Nepali citizens in the two countries, in residence, property, business and movement.
- Power Sector Cooperation:
- In June 20023 India and Nepal signed a long-term Power Trade Agreement, targeting the import of 10,000 MW of electricity from Nepal in the coming years.
- Memoranda of Understanding (MoUs) were signed between National Hydroelectric Power Corporation (NHPC), India and Vidyut Utpadan Company Ltd, Nepal for the development of the Phukot Karnali Hydroelectric Project and the Lower Arun Hydroelectric Project.
- To mitigate the challenges, India needs to engage proactively with Nepal, enhance development assistance, strengthen economic ties, and foster people-to-people relations.
- Additionally, India must work on multilateral initiatives and regional cooperation to counterbalance the expanding Chinese influence in Nepal and ensure stability and prosperity in the region.
- Diplomacy, dialogue, and collaboration will be crucial in managing these challenges effectively.