India-Nepal Relations: Mixed Fortunes – Analysis

By Pramod Jaiswal*

Narendra Modi’s electoral victory in May 2014 generated positive vibes throughout the region. His invitation to the heads of governments of the South Asian Association for Regional Cooperation (SAARC) member-states to his swearing-in ceremony, and making Bhutan and Nepal his first official foreign visits clearly highlighted his prioritisation of India’s neighbourhood. In this context, this article assesses India’s relations with Nepal during the past three years.

Continuity and Change

As Prime Minister, Modi’s first public statement on foreign affairs was about Nepal, on Twitter, where he said that he was committed to strengthening relations. Unlike his predecessor, Dr Manmohan Singh, who failed to visit Nepal even once in his decade-long tenure, Modi visited Nepal twice – in August 2014 and in November 2014 – becoming the first Indian prime minister to visit the country in 17 years. He enchanted the Nepalese people with a rousing address in Nepal’s parliament, which was the first such address by a foreign leader. Like in the past, Modi also assured India’s commitment to Nepal’s economic development. He announced a soft loan of US$1 billion and assistance in several infrastructure development projects of Nepal.

During this visit, Modi also agreed to review, adjust, and update the 1950 Indo-Nepal Treaty of Peace and Friendship, which has been deemed ‘unequal’ by generations of Nepalese leaders, and other bilateral agreements. He called to form an Eminent Persons Group from both countries for this task. He also reactivated, after a hiatus of 23 years, the Joint Commission that was formed in 1987 at the Foreign Ministers’ level with a view to strengthening, understanding and promoting cooperation between the two countries for mutual benefit in the economic, trade, transit and the multiple uses of water resources.

Within a few months, Modi visited Nepal again to attend the 18th SAARC Summit. He inaugurated an Indian-built 200-bed trauma centre, provided a helicopter to the Nepal Army and a mobile soil-testing laboratory.

As a friendly neighbour, India was quick in its response towards Nepal during the devastating 7.9 magnitude earthquake in April 2015 that caused massive destruction and claimed thousands of lives. Within hours of the calamity, Modi spoke to the then Nepalese Prime Minister Sushil Koirala and the then Nepalese President Ram Baran Yadav assuring them of India’s assistance. Within six hours, India dispatched a team of the National Disaster Response Force along with relief material. India’s total relief assistance amounted to US$67 million, and it committed another US$1 billion (one-fourth as a grant).

Despite such increased engagement and assistance, Nepal continued to blame India for interference in its domestic affairs. Nepal’s claim to an equal share over a disputed tri-junction, Lipu-Lekh Pass, also caused controversy. Lipu-Lekh was mentioned in the China-India joint statement during Modi’s visit to China in May 2015. The joint statement read, “The two sides agree to hold negotiation on augmenting the list of traded commodities, and expand border trade at Nathu La, Qiangla/Lipu-Lekh Pass and Shipki La.” Nepal, under pressure from its media, civil society and political opposition, demanded that China and India remove the mention of Lipu-Lekh from their joint statement, arguing that it threatened Nepal’s sovereignty and territorial integrity. However, Indian experts counter-argued that both China and India have been referring to Lipu-Lekh Pass as one of their border trading points since 1954. Indian experts have pointed to Nepal’s position on Kalapani and Lipu-Lekh Pass as being politically motivated, especially given how ultra-nationalist groups have been involved in spreading anti-India sentiment and demanding a ‘Greater Nepal’ to gain political mileage.

Unrest in Madhes, a region bordering the Indo-Nepal border, which propelled anti-India sentiment among the ruling elites, led to a severe deterioration in bilateral relations. The Madhesis waged a 135 days long ‘non-cooperation movement’ along the border, which halted the entry of fuel and other essential supplies to Nepal from India. Kathmandu’s ruling elite claimed that the ‘blockade’ was imposed with Indian support as India did not welcome the new non-inclusive Nepalese constitution, which had triggered the Madhesi protest. Despite denials of this allegation by both Madhesi leaders and New Delhi, the dramatic end of the ‘blockade’ before the visit of the then Prime Minister KP Sharma Oli to Delhi clearly lent fuel to such allegations.

Though Modi began his tenure concentrating on India’s neighbours, he got engrossed with building relations with bigger powers. Although Dr Singh had failed to visit Nepal even once, his government spent considerable time following the political developments in Nepal. Dr Singh’s two governments played a great role in ensuring a smooth political transition in Nepal. However, the Modi government was not able to take control over the situation in time and intervened at the last hours, when it was too late. He sent the foreign secretary as the Prime Minister’s Special Envoy, but he failed to deliver positive results.

Modi subsequently tried to control the damage. He invited Oli for a six-day visit to India before his scheduled China visit. However, Modi was unable to convince Oli to address the demands of the Madhesis. Rather, in few weeks, Oli visited China and tried to challenge the Indian monopoly by signing an agreement on trade and transit with Beijing. This has been one of the major failures of the Indian government under Modi, which will have long-term implications on India. However, India was successful in toppling the Oli-led government, forging an alliance between the Nepali Congress and Communist Party of Nepal (Maoist Center). Sher Bahadur Deuba and Pushpa Kamal Dahal ‘Prachanda’, the respective heads of the two parties agreed to serve the remaining tenure of 18 months on a rotational basis.

India-Nepal relations were normalised after Prachanda was elected as the prime minister for the second time. India’s then President Pranab Mukherjee and Nepalese President Bidya Devi Bhandari exchanged state level visits. During Prachanda’s tenure, India accelerated the pace of development projects in Nepal and provided additional power supply to meet Nepal’s severe power crisis. With this, Nepal’s growth rate Nepal was raised from a mere 0.8 percent to 7.5 percent, the highest in 13 years.

Conclusion

India-Nepal relations during Modi’s tenure have had mixed fortunes so far. While he was successful in enchanting the minds of Nepalese during his first visit, he got trapped in controversies later. He was appreciated for his support to the people of Nepal during the massive earthquake, but criticised on the issues of Lipu-Lekh. He received high appreciation from Madhesis for supporting their demands for an inclusive constitution and standing for democracy and social justice, but could not deliver the desired results. With the rise of Modi and the thumping victory of Bharatiya Janta Party (BJP) in Uttar Pradesh, there were apprehensions that India might impose ‘Hinduism’ on secular Nepal or might attempt to revive the Hindu monarchy there. However, such fears turned out to be unfounded.

India has tremendous leverage in Nepal. It is still Nepal’s largest trading partner and contributes significantly towards the country’s development. New Delhi has played a crucial role in Nepal’s major political transitions, be it the overthrow of the autocratic Rana regime; restoration of democracy in 1990; abolition of Monarchy; or the mainstreaming of the Maoists. It should play its role to bring stability and development in Nepal, which will eventually serve India’s prime interest, which is security. It also needs to manage the Nepalese media and public perception in Nepal to contain the rise of anti-India propaganda.

* Pramod Jaiswal
Senior Fellow, IPCS


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IPCS

IPCS

IPCS (Institute for Peace and Conflict Studies) conducts independent research on conventional and non-conventional security issues in the region and shares its findings with policy makers and the public. It provides a forum for discussion with the strategic community on strategic issues and strives to explore alternatives. Moreover, it works towards building capacity among young scholars for greater refinement of their analyses of South Asian security.

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