Pledged maximum FDI to neighbouring Nepal
China's growing investment in the Himalayan nation is seemed to be a cause of concern for India in recent days. While listing the country's top five bilateral development partners on the basis of official development assistance (ODA) disbursement that includes the US, the UK, Japan, China and Switzerland, India failing to qualify as one, in the list for the first time in the last five years, needs to be taken seriously for sure. As against China's investment of $57 million as the foreign direct investment (FDI), India's $18 million comes as poor third in its landlocked neighbor Nepal. However India's long-standing commitment to Nepal cannot be measured only in terms of FDI because the latter shares long historical and cultural ties with the former for ages. But then why India is failing to register as ‘the most influential trading partner and power' for NepalIJ Simply leaving our backyard to China may pose a potential threat to our national security and many India-Nepal observers read it as a significant failure on our diplomatic front as well. With the coming of the Narendra Modi Government at the Centre, the India-Nepal relationship has taken an upward movement.
China's constant focus on investment, cultural exchange and heightened contact at top political level must be matched from the Indian side. Now though the exit of the KP Sharma Oli Government can be taken as an advantage for India, yet the coming of the PK Dahal Prachanda's Government may be watched carefully. Despite Nepal plunging into a tumultuous political uncertainty, China's share of investment has remained steady in terms of total FDI commitment, accounting for around forty percent. It seems China is not losing its ground with the incoming Prachanda regime as the latter has also made it clear that Nepal will definitely implement all the bilateral agreements which the Oli Government had signed with the former. Arguably, it is a big victory for China which has huge stake in Nepal by now. India must make it sure that Nepal does not inordinately rely mostly on China for its major developmental projects. India's ODA disbursement to Nepal has plummeted from earlier $47 million to the current $22 million in 2014-2015 as per the report of the Finance Ministry of that country. However India's aid disbursement is continued to be worth over $50 to $ 70 million every year and hence, the country must devise a strategy for engaging the neighbouring Nepal without any failure both in times of its crisis and in peace. Beyond the extension of the trading link, with a certain degree of suspicion and caution, India must watch Chinese involvement in Nepal and moreover China's spreading influence to southwards to the Terai region must be observed carefully.