What India should, and shouldn’t, do in Nepal

SD Muni


Nepal has drifted into a political crisis following its Prime Minister (PM) KP Sharma Oli’s decision to dissolve Parliament. The constitutional validity of Oli’s move has been questioned, and is awaiting decision by the Supreme Court.

Unlike on previous occasions, Oli has refrained from blaming India for destabilising his regime. The PM’s ire has been directed at his senior party colleagues for not allowing him to govern smoothly. The others, in turn, blame Oli for non-governance, corruption, concentration of power, and refusal to honour commitments made on sharing power.

India has played its cards cautiously and craftily. With an assiduously cultivated façade of non-interference, it let China smear itself into the mud of micromanaging the ruling party’s internal conflicts.

Anti-Oli forces were quietly cheered to dump him, but when they failed, India subtly extended a helping hand to a desperate Oli struggling for survival.

Prime Minister Narendra Modi positively responded to Oli’s telephonic greetings on India’s Independence Day. A series of important visits from India followed. The Research and Analysis Wing (R&AW) chief, army chief and the foreign secretary visited Nepal on October 22, November 4 and November 23, respectively. These visits were in the midst of Oli’s intra-party strife.

Energy and trade officials from the two countries have met each other, border talks are on board, and Nepal’s foreign minister is visiting India for the joint commission meeting next week.

Through these moves, India has achieved its immediate tactical goals. Oli has been emboldened to stick to power even by breaking the party. In the process, the shallowness of Oli’s opportunistic and politically driven anti-Indian nationalism has been exposed. The unity and dominance of the ruling Nepal Communist Party (NCP) has been shattered, and China, as its patron, has been embarrassed.

On the sidelines of these developments, India has also fuelled and fed Hindutva forces under the leadership of a discarded monarchy, possibly as a ploy in the unfolding realignment of political forces in Nepal. Towards that end, India has now come out openly in favour of fresh elections.

All this puts India on the side of undemocratic, unconstitutional and opportunistic players in Nepal, which South Block strategists think is a small price to be paid for the significant gains otherwise made.

Seeking a friendly regime in the neighbourhood is a recognised norm in the realist world of international relations. India is no exception. It has often invested heavily in Nepal to have a friendly, even a pliant, regime.

But in the long-term, this approach has largely resulted in the erosion, rather than consolidation, of India’s vital security and economic interests.

With China deeply pitched in the regime change business in Nepal, prospects of this approach in coming years seem expensive and uncertain.

Irrespective of whether Nepal has elections or witnesses the restoration of Parliament, a prudent course for India would be to let Nepal cope with its internal political mess. As no major development in bilateral relations appears likely during the prevailing uncertainty, India must encourage consolidation of a people-driven polity, and improve its own popular profile.

It can pick up pending controversial issues such as the 1950 treaty, the Kalapani border dispute, and trade and investment matters, and categorical state its position, drawing red lines that Nepal should not cross.

Nepal has asked for a revision of the 1950 treaty, and this has been accepted by India. But the issue remains stuck because Nepal does not clarify how to strike a proper balance between India’s security concerns and Nepal’s developmental aspirations. Without this balance, no new treaty is possible, and Nepal, seemingly, is not prepared to abrogate the old treaty.

The question of the Kalapani border dispute has also vitiated popular perceptions in Nepal about India. While Nepal has taken unilateral and extreme decisions on this dispute, drawing new maps, India has not even clearly stated its stand.

The available evidence, also backed by India’s security stakes and civilisational connectivity with Kailash Mansarovar (in China), weighs strongly in India’s favour.

Nepal must be persuaded to assess the claims of both the sides objectively and independently. India’s policy towards immediate neighbours has never been driven by territorial nationalism. This has been evident in the case of Sri Lanka (Katchatheevu), Bangladesh (territorial waters), and even Pakistan and China.

On trade and investment issues, India needs to be more accommodative. Nepal sells less than $1billion worth of products to India while importing nearly $8 billion of them.

This is unsustainable, despite the fact that trade deficits are governed by the nature of economies. India can and must move to remove structural and procedural impediments to the entry of genuine Nepali goods into Indian markets.

It should also encourage Indian investments in such industries, including hydropower production, that can boost Nepali exports.

In redefining its approach to Nepal, India also needs to shed a great deal of its Sinophobia. China is no doubt politically assertive and financially spread out in Nepal, but most of its promises, such as transit through Chinese ports and railroad connections, are politically driven.

Even China’s own Belt and Road Initiative experts have termed some of these projects as economically unviable. Let China sink itself more into Nepali internal politics, which will only help India reclaim its contested strategic space.

(S D Muni is professor emeritus at JNU, member of executive council of IDSA, and a former ambassador and special envoy of the Government of India)

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