Chinese President Xi Jinping with Nepal PM K P Sharma Oli in Kathmandu on October 12

by Ashok K Mehta

Xi’s dream — to be the sole leader of the Asian century — is attainable: By keeping India anchored to the region using Pakistan, even as Beijing, assisted by Kathmandu, blocks New Delhi’s traditional strategic space in Nepal. But, not all is lost for India.

For some thinking Indians, President Xi Jinping flying straight from Chennai to Kathmandu was provocative, even an affront to India. This is incomprehensible. Nepal has been waiting for Xi since 2014, his trips being periodically postponed. He had been waiting for the right timing: For Nepal to have a full-fledged communist government with a massive and unprecedented electoral majority that would allow the Nepal Communist Party leader and prime minister, Khadga Prasad Oli, to pick Beijing over New Delhi, the dominant power for decades. India’s marginalisation in Nepal — which is geo-strategically vital in its security calculus — is largely self-inflicted: Clumsy diplomacy. In his first term, Prime Minister Narendra Modi chose Nepal for his first visit, when he mesmerised Nepalis of all shades with his promise of resetting India-Nepal relations. That never happened and the rest is history.

Then, Xi came calling. His visit was meticulously planned: Preceded by visits of foreign minister Wang Yi, a 40-member delegation of the Communist Party of China, carrying Xi Jinping Thought for exchanges with Nepal’s Communist Party, and, a signed article by Xi which appeared in Nepali newspapers, tracing the historical and cultural links in the China-Nepal relationship which he wished to upgrade to long-term strategic and security cooperation. He pledged to safeguard Nepal’s national sovereignty, independence and territorial integrity. The entire Nepal cabinet, led by Oli and president Bidya Bhandari, was present to give a reception no foreign visitor has received in recent times.

As in the past, the deliverables in the 18 agreements and two letters of exchange were not as spectacular as was expected. Boundary Management Systems — which helps insulate China’s northern reaches with Nepal — is a perennial issue relating to the illegal passage of Tibetans. China’s main security concern relates to anti-China activities by 20,000 Tibetans living in Nepal who are virtually under lock down during such visits. Mutual legal assistance in criminal matters, which Beijing hopes will ultimately result in an extradition treaty, figured prominently. Xi also announced a financial assistance package of $495 mn for the next two years which India will find difficult to match. Already China has overtaken India in FDI to Nepal which was about $300 mn in 2018. The feasibility study for Cross Himalayan Connectivity Network of a railway from Kyirong to Kathmandu was approved. This will ultimately be extended via Pokhara to Lumbini in Terai as the China-Nepal Economic Corridor component of the Belt and Road Initiative. A preliminary study by China Railway First Survey and Design Institute Group Co Ltd has noted formidable technical, geological, scientific and engineering challenges to this, including its security along with high costs and risks that far outweigh the benefits. One estimate puts the cost of the Kathmandu-Kyirong section which includes a 28 km tunnel at $2.7 bn. The question of funding invokes in the minds of the Nepalese, the Hambantota debt trap. A railway line from Lhasa to Kathmandu, unless it reaches the border with India, makes little commercial sense. On the other hand, it will raise strategic doubts and uncertainties between New Delhi and Beijing given the taut state of current relations.

Nepal, of course, does not view the CNEC as a threat but an opportunity for it to play the bridge between the two fastest growing economies, China and India. King Prithvi Narayan Shah, founder of Nepal, had said in 1770 that Nepal is a root vegetable between two big boulders, calling for balance and equidistant, which has never been possible. Given the great rise of China, and its involvement in Nepal’s domestic politics, Kathmandu may be forced to make major strategic choices. In the past, former prime ministers, Pushpa Kamal Dahal Prachanda and Babu Ram Bhattarai, had sought to encourage India to join the triangular India-Nepal-China grouping. In 2016, at Kathmandu’s behest, the three countries did discuss it. But India shied away, preferring to deal bilaterally with Nepal like other countries in the neighbourhood. After Wuhan, then Chinese Ambassador to India, Luo Zhaohui had mooted ‘China-India-plus one’ as a new model, as the two countries agreed to jointly train Afghan diplomats. He was aiming for India-China-Nepal; the idea regurgitated by Xi was to also include Pakistan as plus one.

In his banquet speech, Xi emphasised that the Cross-Himalayan Connectivity Network will help Nepal become land-linked from land-locked with additional entry points, alluding to reducing dependence on India. According to Chinese media, Xi told Oli that anyone attempting to split China will have “crushed bodies and shattered bones”, an unveiled message for “splittists” — Hong Kong included. Xi chose Nepal, a country which has sought to be a zone of peace, because it is regarded as a window to Tibet.

Given its new pre-eminence in Nepal and deep pockets, Beijing has sought parity with India including enhanced defence and military cooperation as part of the new blueprint in Nepal-China relations, which, for the first time, have become strategic. The CNEC is more strategic than economic, especially its envisaged outreach to Lumbini which will breach India’s red line on Chinese activities in Nepal. New Delhi has completed its feasibility study of a railway line from Raxaul to Kathmandu. How the Kathmandu-Kyirong rail will connect with the Indian section to the south, given the different railway gauges, is unclear. The Indian military still views a PLA challenge, both overt and covert, through Nepal to the strategic Indo-Gangetic plains, as very real. Very recently, a conference was held by the Army to consider the military implications of China’s enhanced presence and influence in Nepal.

Xi’s dream — to be the sole leader of the Asian century — is attainable: By keeping India anchored to the region using Pakistan, even as Beijing, assisted by Kathmandu, blocks New Delhi’s traditional strategic space in Nepal. But, not all is lost for India. Geography, including the open border, for one, is in India’s favour. Winning back Nepal and the confidence of its people is the challenge.