New Delhi will have to deal with whoever is in power in Nepal, and in spite of the differences between both sides and certain misgivings it is important to try and begin from a fresh slate, and think of innovative solutions and explore new vistas of cooperation.
After taking over as PM in February 2018, Oli in an interview stated that Nepal needs balance relations between India and China ( Kathmandu has made a decisive shift towards Beijing during Oli’s Prime Ministership, largely as a consequence of differences between both sides in 2015-2016 over the Madeshi issue, followed by the economic blockade), but India’s relevance for Kathmandu can be gauged from the fact, that this is his first overseas visit after taking over as PM. Indian Foreign Minister, Smt.Sushma Swaraj met with Oli, even before he took over as PM.
Objective of the visit
Both sides would want to reboot the relationship as stated earlier. High on the agenda would be an appraisal of infrastructural projects such as rail links( Jogbani to Biratnagar), Hetauda polytechnic, the Terai road project as well as the inauguration of an integrated checkpost at Ruxual (Bihar) to give a boost to economic ties.
Beyond the politics, India would ask Nepal to host BIMSTEC in the coming months. Some of the projects under this sub-regional grouping offer an alternative narrative to the ambitious OBOR project
India’s national interest the China factor
It is important for India to firmly push its national interests, but it should not get bogged down by China. Beijing is using it’s soft power as well as economic power. Chinese FDI has witnessed a significant rise in recent years, Oli has already spoken in favor of handing over the 1,200 MW Budhi Gandaki Project to a Chinese company (CGGC Group).
“Political prejudice or pressure from rival companies may have been instrumental in scrapping of the project. But for us, hydropower is a main focus and come what may, we will revive the Budhi Gandaki project.”
His predecessor Sher Bahadur Deuba’s government had found the agreement with CGGC flawed and decided against handing over the project to CGGC. Another ambitious project is a rail project – China plans to connect the Qinghai-Tibet railway to the Nepal border by 2020.
Apart from big ticket infrastructural projects, China in January 2018 became Nepal’s second internet service provider after India. Nepal Telecom and China Telecom Global joined hands and ended India’s monopoly in this sphere. China has also funded a swanky campus of Nepal Armed police’s training academy, and the number of Chinese language centres is increasing.
New Delhi’s approach towards China’s influence and the upcoming visit
Beijing with its increasing clout in the region will not just push forward it’s own economic interests, but will also try to ensure that Pakistan’s ties with other neighbors improve. Islamabad was to host the SAARC Summit in 2016, but due to a boycott by India and other SAARC countries including Bangladesh was unable to do so. It shall try to host the Summit in 2018. Pakistan PM Shahid Khaqan Abbasi during his visit to Nepal in March 2018, had spoken about trilateral cooperation as well as the revival of the SAARC Process. New Delhi needs to pay close attention to this, while the Pakistan factor will not come up during Oli’s visit, Nepal due to its increasing proximity with China may back Pakistan.
Need to strike a balance
New Delhi thus needs to be very deft in its handling of Kathmandu and realistic in its expectations. The focus should be on accelerating the pace of existing projects, further strengthening people to people contacts (especially linkages between Universities, and granting more scholarships to Nepalese students). Astute handling of the relationship would get it back on track, and India should aim to iron out some of the differences with Oli during the visit, but there is a dire need to be both patient and pragmatic. Being reactive on each and every diplomatic move of smaller neighbours is counterproductive, the focus should remain on the deliverables.