Nepal’s Balancing Act: A Small Nation Between Giants
Nepal’s Balancing Act.
Nepal, a small yet historically rich country nestled in the Himalayas, holds a unique place in South Asia. Sandwiched between two powerful neighbours, India and China, it has long tried to balance these relationships to protect its sovereignty and foster development. Both countries are crucial to Nepal’s economy, security, and infrastructure. However, this geographic and strategic advantage comes with risks, as Nepal often finds itself caught in their competition for influence. This essay highlights Oli’s visit to China, explores Nepal’s strategic balancing and economic challenges, and examines its relations with India and China while focusing on efforts to address these challenges and achieve national development.
Nepal’s Strategic Balancing: India, China, and Economic Challenges
Nepali Prime Minister K.P. Sharma Oli’s four-day visit to China in December 2024 marked a significant moment in Nepal’s foreign relations. By visiting China before India, Oli departed from tradition, sparking debates about whether this signalled greater sovereignty or a tilt towards China. Central to the visit was advancing infrastructure projects under the Belt and Road Initiative (BRI), originally agreed upon in 2017. Key initiatives discussed included the Tokha-Chhahare Tunnel and the China-Nepal Cross-Border Railway. However, financial uncertainties, particularly Nepal’s reluctance to accept loans due to fears of debt dependency, clouded the outcomes.
Nepal’s preference for grants over loans stems from concerns about financial risks, as seen in other nations facing debt crises after engaging with Chinese-funded projects. The Pokhara International Airport, built with a Chinese loan but underutilised, exemplifies the challenges of such initiatives. While Oli emphasised Nepal’s commitment to balanced relations with both India and China, the visit highlighted growing ties with China as a strategic shift to diversify Nepal’s economic partnerships.
Despite increasing Chinese influence, Nepal’s historic ties with India remain vital. India has long been Nepal’s largest trading partner and key ally during crises, such as the 2015 earthquake. Shared culture and open borders foster deep social and economic bonds. Yet, events like the 2015 economic blockade, which severely impacted Nepal’s economy, have driven the country to seek alternatives, including closer engagement with China. This dynamic showcases Nepal’s delicate balancing act, leveraging historical ties with India while exploring economic opportunities with China, all amidst domestic political and financial challenges.
Nepal’s Historic Ties with India
Nepal and India share a bond rooted in culture, religion, and history. The open border between the two nations allows free movement of people, fostering deep social and economic ties. Families live across the border, speak similar languages, and share festivals and traditions. Sites like Lumbini, the birthplace of Lord Buddha in Nepal, and Bodh Gaya, where he attained enlightenment in India, highlight their shared heritage. So does the Janakpur-Ayodhya (Sita and Ram) connection.
India has historically been Nepal’s largest trading partner and key security ally. During times of crisis, India has extended significant support, as seen after the devastating earthquake in 2015. Indian Army teams were among the first to assist, providing relief and helping rebuild infrastructure. This assistance underscored India’s role as a dependable neighbour. The two nations also have strong military ties; Nepalese Gurkhas have served in the Indian Army for decades, earning respect and creating lasting bonds.
However, despite these ties, tensions have arisen due to perceptions of India’s dominance in bilateral relations. The 2015 economic blockade, although unofficial, significantly affected Nepal’s economy and everyday life, souring relations between the two nations. This event became a turning point, pushing Nepal to seek closer ties with China to reduce dependence on India.
Communism in Nepal: Roots and Implications
Nepal’s political landscape took a significant turn with the rise of Communism. Historically a Hindu kingdom, Nepal transitioned to democracy, but poverty and socio-economic challenges created fertile ground for Communist ideologies. Influenced both by China’s official Communist agenda and the Naxalbari movement in India, Nepal embraced a political shift that now shapes its domestic and international policies.
Communism has thrived in Nepal due to economic disparities and governance issues. However, this has also led to complications in foreign relations, especially with India, which has traditionally favoured a more democratic governance style. While Communism aligns Nepal closer to China ideologically, it adds another layer of complexity to its balancing act between the two powers.
Kalapani Dispute and Territorial Challenges
The territorial dispute over Kalapani, Lipulekh, and Limpiyadhura illustrates the strains in Nepal-India relations. This issue gained momentum during K.P. Sharma Oli’s tenure, as Nepal published an official map including these disputed areas. Encouraged by China, these actions added to the complexities of bilateral ties.
This dispute is not only a geopolitical concern but also a test of Nepal’s diplomatic strategy. Balancing its assertions without alienating India is crucial, particularly when its economic and cultural connections with India remain vital.
Strategic Concerns and Hydropower Potential
Nepal’s abundant rivers offer immense potential for hydropower, which could transform its economy and address South Asia’s energy needs. Collaboration with India has already led to successful projects like the Arun III Hydropower Plant. However, political mistrust and mismanagement have slowed progress on other projects. Nepal’s collaboration with China on hydropower could provide an alternative, but logistical and financial challenges remain.
Harnessing hydropower requires careful planning. Transparent agreements with both India and China can help Nepal avoid pitfalls like excessive dependency or exploitation of resources. Bhutan’s hydropower partnership with India serves as a successful model that Nepal could emulate.
Cultural Ties: India’s Soft Power Advantage
Nepal’s shared cultural heritage with India is an enduring bond that transcends politics. Religious sites like the Pashupatinath Temple and Lumbini serve as symbols of unity between the two nations. Indian priests officiating at Nepalese temples and the recruitment of Nepalese Gurkhas in the Indian Army reinforce people-to-people connections.
However, China’s growing cultural influence cannot be ignored. Investments in sites like Lumbini showcase China’s interest in shaping the narrative of Buddhism’s global origins. India must actively preserve its cultural ties by promoting exchanges and celebrating shared traditions.
Role of External Powers
External players like the United States also influence Nepal’s dynamics. Recent visits by U.S. officials highlight their interest in countering Chinese influence in South Asia. Collaborating with allies can help India safeguard mutual interests in the region, but direct engagement with Nepal remains crucial for long-term stability.
Challenges of Political Instability
Nepal’s domestic politics are plagued by instability. Frequent changes in leadership, with over ten Prime Ministers in the last decade, have hindered long-term planning and policy execution. Political instability not only weakens Nepal’s governance but also affects its ability to navigate relationships with India and China effectively.
A unified domestic strategy is essential for Nepal to project stability and independence. Addressing internal political discord will strengthen Nepal’s position in dealing with its powerful neighbours.
Rebuilding Trust
India and Nepal share more than just borders—they share history, culture, and economic interdependence. However, incidents like the 2015 blockade damaged trust, providing China with opportunities to expand its influence. India must rebuild trust through cultural diplomacy, equitable partnerships, and support for Nepal’s developmental aspirations.
Nepal’s potential for economic growth, particularly through hydropower, can serve as a cornerstone of India-Nepal cooperation. By fostering transparency and prioritising mutual benefits, India can strengthen ties with Nepal while countering China’s growing presence.
Conclusion
Nepal’s journey as a landlocked nation between two giants is filled with challenges, but it also offers opportunities for growth and development. By maintaining a balanced approach, fostering transparency, and addressing domestic political instability, Nepal can navigate its complex relationships with India and China. Strengthening cultural ties, leveraging natural resources like hydropower, and prioritising equitable agreements will be key to ensuring Nepal’s long-term stability and prosperity. In this delicate balancing act, Nepal’s resilience and strategic foresight will determine its success in shaping a future that benefits its people and maintains its sovereignty.
