When External Affairs Minister Sushma Swaraj arrives in Kathmandu this week to review the state of bilateral cooperation and prepare for Prime Minister Narendra Modi’s visit to Nepal, China is bound to loom large. For Beijing’s profile Nepal has steadily risen in the last few years and has generated concerns in the Indian security establishment. As elsewhere on its borders, China is rapidly expanding its trans-frontier influence in Nepal.
It is upgrading the Araniko highway from the Tibet border to Kathmandu, built in the 1960s. It also has plans to extend the Tibet railway line to the Nepal border. China’s trade and investment ties with Nepal as well as development assistance have steadily risen in recent years, as Beijing’s economic influence radiates across the border. Chinese tourist arrivals in Nepal have grown at an average of nearly 25 per cent a year over the last few years. Beijing’s cultural presence has significantly expanded with the setting up a number of China Study Centres in Nepal, including in the Terai region, which shares a long border with India.
RIVALS & FRIENDS
China’s presence in Nepal has long been viewed as a “zero-sum-game” in New Delhi. If the security establishment in Delhi sees Nepal as part of an exclusive Indian sphere of influence, Beijing has affirmed the right, as the large northern neighbour, for a substantive engagement south of the Himalayas.
Given this structural tension in the approaches of Delhi and Beijing, China has been a useful card to play against India for some in Nepal’s elite. They have insisted on some kind of “non-alignment” between Nepal’s giant neighbours, much to the irritation of Delhi. This game has become somewhat complicated as economic relations between China and India have improved, despite their other political problems, including the boundary dispute.
China views many of its transport projects in Nepal as a means to access the large markets in the Gangetic plains. In the last few years, there have been repeated hints from Chinese think-tanks on the need for Delhi-Beijing economic cooperation in Nepal. Beijing has now formally suggested the idea of China and India developing a Trans-Himalayan zone of cooperation. It is one of a piece with the Silk Road strategy that Chinese President Xi Jinping has made his own.
Although there are many sceptics in Delhi who are deeply uncomfortable with the idea of economic cooperation with China across the land frontiers, there are signs of a shift within the foreign policy establishment. For example, Delhi was until recently cold to Chinese proposals on developing the so-called BCIM corridor, which would link Beijing’s Yunnan province with Myanmar, Bangladesh and eastern India. Delhi now appears more open to the idea of regional economic cooperation with China, which in turn sets a very different framework for Delhi’s engagement with Kathmandu.
The NDA government’s real challenge in Nepal, however, is not China. It continued…