Roundtable on ‘Recent Developments in Nepal-China Relations: Implications’

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Vivekananda International Foundation (VIF) hosted a roundtable on ‘Recent Developments in Nepal-China Relations: Implications’. The key speaker, Mr. Sunil KC, CEO of Asian Institute of Diplomacy and International Affairs, Kathmandu, touched upon various aspects of Sino-Nepal relations, its implications for India-Nepal relations and the way forward for the South Asian region. The programme, coming in the backdrop of Nepalese Prime Minister K.P Oli’s recent visit to China, generated high level of interest and was well attended by subject experts from outside of VIF as well.

Sunil KC argued that PM Oli’s visit was not a game-changer, but was an important follow-up to the ongoing Nepal-China bilateral engagement. While a slew of agreements were signed, he opined that these opportunities could have been capitalized upon by India too. Giving examples, Sunil KC said that Chinese companies had recently invested close to $391 mn for the Shivam Cement project in Nepal to be undertaken as a joint venture with Nepalese companies. Nepal and China also signed an agreement on the much anticipated railway project. These two are expected to generate employment opportunities within Nepal.

Sunil clarified that although Prime Minister Oli came to power on an anti-India plank following the economic blockade imposed on Nepal, during his 6-day visit to India earlier this year, he managed to resolve many outstanding issues between the two neighbours. While India Nepal shared positive people to people ties, there were some concerns in Nepal regarding the delayed completion of projects by India. He also mentioned ‘Indian inability to acquire two important projects namely the Lumbini and Pokhara international airports’, despite some initial interests shown by some Indian companies. He added that even though the two Prime Ministers had agreed on a waterways connectivity project between Kosi and Ganges Rivers, a detailed project report is yet to be finalised. In contrast, the timely completion of hydropower projects by the Chinese companies was mentioned. However, Nepal’s decision to scrap a $2.5 billion deal with China’s Gezhouba Group Corporation to build the country's biggest hydropower plant and build it on its own was an important move.

Sunil KC said that there was considerable optimism in Nepal on the proposed railway link between Raxaul in Bihar and Kathmandu that would help strengthen people-to-people contact and bulk movement of goods. He suggested serious follow up action in this regard.

The speaker hoped that India would examine possibilities of more investments in Nepal, especially in the hydropower sector. This would also aid countries like Bangladesh, which needs 35,000 MW of electricity from 2025. He also hoped that the BBIN initiative (Bangladesh, Bhutan, India and Nepal) and its framework will be taken up seriously by all countries involved.

In the discussions that followed, emphasis was placed on the strong relationship between India and Nepal and India’s underlying respect for Nepal’s sovereignty. The open borders between the two neighbours was a reflection of the depth of their bilateral ties. Discussants pointed out that nearly 5 million Nepali citizens are working in India including the Gorkha soldiers in the 39 battalions in seven Gorkha regiments in the Indian Army.

Speakers called for a broader understanding of India at the ground level in Nepal and the need to clear the negative perceptions about India. India has been keen to work more closely with Nepal but there seems to be some trust deficit acting as deterrent. Unfortunately Nepal did not consider India’s offer to Nepal to develop its disaster response and mitigation capabilities. Speakers pointed out that Nepal’s decision to invite China to setup a disaster management facility close to the Siliguri corridor was questionable. Similarly, it was suggested that India provides huge potential market for Nepal’s hydroelectric power projects, similar to the Indo-Bhutan cooperation model. Management of negative perceptions about India in Nepal and how best to counter them, were amongst other issues discussed. It was mentioned that periodic meetings between parliamentarians and young political leaders from a wide political canvas could greatly contribute to generating better understanding and closer cooperation.