India, Nepal and the Belt and Road Initiative: A Triangular Analysis
Photo Credit: Xinhua
By Rishi Gupta

India, Nepal and the Belt and Road Initiative: A Triangular Analysis

Jun. 05, 2017  |     |  0 comments

At the moment when the Modi-led government completes its third year in office, it meets one of its major foreign policy challenges in the form of China’s most ambitious Belt and Road Initiative (BRI). Aimed at reviving the ancient Silk Route in the form of the Silk Road Economic Belt and the Twenty-First Century Maritime Silk Road, the initiative comes with multibillion-dollar connectivity and infrastructural projects in and around Asia, Europe, the Middle East, and Africa. China has left no stone unturned to reach out to countries coming under the planned routes, especially those in South Asia.

The grand strategy that China deploys through the BRI is exceptional. From the time the idea for connectivity and development, described at the time as “One Belt One Road,” was announced by President Xi in 2013, Chinese media has been the second strongest force in promoting the initiative after China’s diplomatic channels. While the recent BRI Forum saw the presence of more than thirty heads of state including the Russian President and Pakistani Prime Minister, India decided not to participate, citing the violation of its territorial integrity by one of the BRI’s key projects — the China-Pakistan Economic Corridor which passes through the disputed territory of Kashmir. The Ministry of External Affairs in a statement added that India refuses to be “part of a project (BRI) that ignores its core concerns on sovereignty, and territorial integrity.”

As the major economies agree to back China up financially in ensuring the success of the project, the presence of the chiefs of IMF, World Bank, and WTO have provided China much larger visibility of its efforts in the international system. While India has opted out of the initiative, debates have emerged arguing India might be left isolated. However, on the ground, China remains one of the biggest trading partners of India, with their bilateral trade reaching USD 70.08 billion in 2016. The shifting dynamic concerning the BRI should not affect the existing relationship between the two countries. India and China are also working together in international forums like the BRICS and the Shanghai Cooperation Organisation, indicating that China is not willing to hammer its partnership with India.

President Xi in his speech at the opening ceremony of the BRI Forum made reference to India as he explained the importance of the ancient Silk Route that crossed through it. Clearly, this showcased the Chinese priority to bring India on board to guarantee the uninterrupted reachability across Asia for a “grand global alliance.” As India runs clear of the BRI, its South Asian neighbors, except for Bhutan, participated in the BRI Forum in Beijing. Meanwhile, China is already engaged in a number of projects in Afghanistan, Pakistan, Sri Lanka, and Bangladesh under the BRI umbrella, with Nepal being the latest to agree to join.

In a surprising move on May 12, 2017, just a day before the opening of the BRI Forum in Beijing, Nepal signed the framework agreement in Kathmandu. Nepal cited its association with the BRI as a big leap forward in “promoting cooperation on promoting connectivity of facilities, trade connectivity, financial integration and connectivity of people,” including “cooperation in connectivity sectors including transit transport, logistic systems, transport network and related infrastructures development such as railway, road, civil aviation, power grid, information and communication.” Indeed, this signifies an important act by a sovereign country, but this has raised strategic apprehensions in India.

China has pushed itself into sectors where India has traditionally maintained an upper hand. India, on the other hand, carries the baggage of socio-cultural and political ties.

Why was Nepal’s entry in BRI critical and surprising to India? An analysis through the prism of the geographical understanding of the Himalayan state can answer this. Nepal is a landlocked country, and traditionally it shares close cultural, political, and historical proximity with India. Termed as a “yam between two boulders,” Nepal has strategically served as a “safety wall” for India since the India-China war of 1962. Furthermore, India and Nepal share an open border, enabling free movement of people and trade between the two countries which is not the case between Nepal and China.

The subtleties of the existing “special relationship” between the India and Nepal changed with the advent of democracy in Nepal in 2008. Despite India having successfully facilitated talks between the King, guerrilla Maoist fighters, and the political parties in 2006, which had led to the peace process which finally established democracy in Nepal, the different forces joined in to take on India after it did not welcome the promulgation of the new Democratic-Republican Constitution in 2015. India had instead just noted with sympathetic concerns the demands of the Madhesi people from the Southern Belt of Nepal. (The Madhesis had protested against the provisions in the new Constitution that left them as second-class citizens.) India finally sent a special envoy to persuade the Prime Minister of Nepal to delay the promulgation of the new constitution so that the demands of the Madhesis could be addressed, and this led to a diplomatic disaster which shattered all goodwill that Prime Minister Modi had earned during his visit to Nepal in August 2014.

Timely efforts by India, including high-level exchanges, since then seem to have eased tensions with Nepal. The maiden visit of the current Prime Minister of Nepal “Prachanda” to New Delhi in 2016 and Indian President Mukherjee’s visit to Nepal have managed to control the waters, but reading the outcomes of these visits along the lines of the BRI certainly changes these assumptions. Nepal’s formal association with the Chinese initiative is a shift from “major reliance” on India to “balanced cooperation” with China, especially in the trade, infrastructure, and defence sectors. This comes at a time when India has been pushing hard to balance its relationship with its neighbors in the face of its tensions with Pakistan.

Noteworthily, the 19th South Asian Association for Regional Cooperation (SAARC) Summit in 2016 in Islamabad was cancelled due to alleged attacks by Pakistani militants on India. The regular intervals in the SAARC summits due to tensions between India and Pakistan have left a narrow space for its success in forging cooperation in this most fragile and complex region. Even though India is giving an extra push to continue dialogue through parallel groupings — BIMSTEC, BRICS, and BBIN — they do not guarantee a satisfactory conclusion.

Based on the experiences of the 1988 and 2015 economic blockades allegedly imposed by India, Nepal seems to be working to find alternative solutions through the strengthening of its relationship with China. Other than building roads, providing fellowships, and appreciating the political process in Nepal, China has pushed itself into sectors where India has traditionally maintained an upper hand. India, on the other hand, carries the baggage of socio-cultural and political ties which in many cases has diverted India from its main foreign policy objectives in Nepal.

Hence, while it is wise for India to challenge any loss of ground in Nepal, India should not ignore China’s diplomatic success in Nepal. Despite India’s objections, China had managed to secure observer status in the SAARC after Nepal and Pakistan had batted in its favor in 2005. Nepal also managed to survive the 2015 economic blockade with the help of China. The high-altitude Himalayan terrain has often affected supplies from China but technological advancements made in recent years might improve this. Therefore, Delhi must now pay heed to the growing presence of China in the region and take the case of Nepal in the regional context. It should also come up with a framework on lines of development and economic cooperation with Nepal.

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