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International relations

China and India court new Nepali leader

Railways seen to be next area of contention for superpowers

KATHMANDU -- A week into his term as Nepal's new prime minister, K.P. Sharma Oli found himself again wooed by regional rivals China and India.

Oli was celebrating his 66th birthday on Feb. 23 when Chinese Ambassador Yu Hong brought flowers to his official residence. Indian Ambassador Manjeev Singh Puri followed soon after.

But Oli is used to such attention. The last time he became prime minister in October 2015, the two also rushed to meet him within hours of his inauguration.

Ever since an alliance of Oli's Communist Party of Nepal (Unified Marxist-Leninist), a moderate party, and former Maoist rebels emerged victorious in elections late last year, India and China have been trying to win the favor of the government of the strategically important country.

Over the last two months, Indian Prime Minister Narendra Modi made three phone calls to Oli. On Feb. 1, Modi sent Sushma Swaraj, India's external affairs minister, to Nepal with the goal of resetting ties with Oli, who during his first stint as prime minister, had veered toward China following a five-month unofficial blockade India imposed on the landlocked country.

On the heels of Swaraj's visit, Indian Army Chief Bipin Rawat arrived in Kathmandu on Feb. 13 to attend the National Army Day of Nepal Army.

Chinese and Indian soldiers stand near the disputed Doklam plateau, where the countries' troops faced off last summer.   © Diptendu Dutta/AFP

India has been unnerved by China's ability to make rapid inroads in Nepal. Oli's appointment added urgency to New Delhi's dealings with its close neighbor following its territorial dispute with China over Doklam at the Bhutan-China border middle of last year.

Even Pakistan, India's arch rival and a key Chinese ally, appears keen on having Nepal by its side. On March 5, Pakistani Prime Minister Shahid Khaqan Abbasi made a rare bilateral visit to Nepal, the first by a foreign leader since Oli's inauguration. While the trip was ostensibly to garner support from Nepal, the current chair of the South Asian Association for Regional Cooperation, to hold a bloc summit in Islamabad, Abbasi, in an interview with Nepal's Republica newspaper, urged Kathmandu to take advantage of China's Belt and Road Initiative. "Better connectivity will mean much greater independence and much greater potential for growth," he said. 

Elsewhere in South Asia, China has also made its influence felt by sending warships to the Indian Ocean amid a constitutional crisis in the Maldives, a country already signed up to the Belt and Road plan.

Oli already has a base on which to build relations with China following trade and transit agreements signed with Beijing in March 2016. These agreements allow Nepal, which depends on India for supply and trade, to use an alternative route.

China's entry into South Asia and its focus on economic and trading cooperation will not only help curb India's supremacy, but will also benefit South Asia's economic development, contribute to peace and stability

Li Tao, executive director of the Institute of South Asian Studies at China's Sichuan University

Oli won the election on nationalist posturing and a promise of economic growth. From the Chinese perspective, the bilateral agreements give it scope to invest in infrastructure projects, which in turn feeds Oli's election promise of economic prosperity. Oli has also said he would revive the 1,200 megawatt Budhigandaki Hydropower Project awarded to a Chinese company, that had been scrapped by his predecessor.

The next area of China-India rivalry in Nepal could be railways. Both countries' borders with Nepal -- Tibet in China, and Bihar and Uttar Pradesh in India -- are security-sensitive regions. India has already sped up the building of railway tracks along Nepal's southern plains. But Kathmandu is abuzz with the possibility of an ultra-modern rail connecting China with the capital.

Chinese scholars have identified five key areas of cooperation including financing for the development of a railway between Tibet's Kerung and Kathmandu, according to Li Tao, executive director of the Institute of South Asian Studies at China's Sichuan University.

She said China wanted "a solid political guarantee for the construction of the railway." But India should also be taken into confidence, she added.

"We should do a good job in communicating and reassuring India in order to gain India's understanding and support for the construction of the railway," she said. "If necessary, a trilateral cooperation committee involving all three countries to study the feasibility of the railway extending to India should be established. It will help quell potential dissatisfaction from India."

Pramod Jaiswal, a senior fellow at Institute of Peace and Conflict Studies in New Delhi, however, said Oli was less likely to push through China-funded strategic infrastructure projects such as railways to avoid antagonizing New Delhi.  

"I don't think he will go for the railways, at least not for now. He may agree to smaller projects. But, on the other hand, he also cannot backtrack on his previous agreements with China," he said.

Nepali Prime Minister K.P. Sharma Oli, right, met his Indian counterpart, Narendra Modi, in New Delhi in February, 2015 after a five-month border blockade. (Photo by Press Information Bureau)

Jaiswal added there was a growing realization in New Delhi that India might have lost Nepal as an ally because of the 2015 blockade that led to much hardship.

Li also pointed to Modi's hardline foreign policy as having undermined Indian  power in the region. She said the policy had "intensified clashes" between India and other countries in South Asia."

Li added that China's engagement will contribute to peace and stability in the region. "China's entry into South Asia and its focus on economic and trading cooperation will not only help curb India's supremacy, but will also benefit South Asia's economic development, contribute to peace and stability."

But some view Chinese investment in Nepal less positively. Political commentator Ajay Bhadra Khanal wrote in a local newspaper on Feb. 23: "The flipside of Chinese aid is that it's easy for countries to misuse and bribe it ... Countries receiving Chinese aid gradually find themselves in debt traps, which force them to compromise in favor of China's security and financial conditions."

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