Keeping an eye on the Nepal-China bonhomie
There is no reason for India to be unduly alarmed by the 10 agreements signed between Nepal and China on Monday. China has always been a prominent factor in the regional dynamic here, and there is little that has happened now, during Nepal Prime Minister Khadga Prasad Sharma Oli's ongoing week-long China tour, that has substantially changed the equation against India. Moreover, it is natural for Nepal, as a small country located between two vastly bigger states, to build strong ties with both neighbours. The India-Nepal bilateral, despite the recent challenges that it has faced, is on a strong footing, and not threatened by good relations between Kathmandu and Beijing. That said, India cannot afford to be complacent or else it will run the risk of losing at least its economic influence with its northern neighbour in the long term. In the short term, the pacts that were signed on Monday hardly seem like an immediate challenge. They aren't project blueprints per se but mostly pointers for the future on trade and transport ties which is along expected lines. Take, for example, the agreement to conduct Nepal's foreign trade through China. Currently, almost all of Nepal's international trade happens through India and there is reason for that. Apart from socio-cultural links, it is easier to move goods from Nepal through India rather than China. It is understandable if Kathmandu desires direct links to China's trade and transit hubs, but getting around the mighty Himalayas is easier said than done. It will take several years, if not decades, to build the kind of necessary transport infrastructure. Similarly, the proposed rail link from China to Nepal is another long-term project that faces Herculean geographical challenges. The Chinese Foreign Ministry itself has said that while China plans to extend the Qinghai-Tibet line to Gyirong, which is close to its border with Nepal, a further extension into Nepal will only happen “far in the future”. Another issue that is causing some heartburn in India is the proposed free trade zone between China and Nepal. But this project is still in its infancy. On the other hand, India already has a strong trade agreement in place with Nepal, which can be bettered by improving border infrastructure and transport facilities.
There are some new projects that can be realised sooner than later such as the international airport in Pokhara, for which China has offered loans, as well as a bridge across the Xiarwa river on the China-Nepal border. The latter will help set up a new border transit point and should re-invigorate the remote Karnali region. But instead of viewing these as antithetical to India-Nepal ties, New Delhi can focus on how to best play its own set of cards. This means efficiently delivering the many projects that it already has in Nepal, improving border infrastructure, strengthening political ties with Kathmandu, and continuing to nurture the people-to-people relations between the two countries.