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    February 2016

India, Nepal should patch up


There is a German proverb which says, “When two are fighting, the third is rejoicing.” The proverb comes to mind when one looks at the current state of India-Nepal relations which have trapped into an uncomfortable and undesirable bind. At a time when there is a growing anti-India sentiment in Nepal, China has been reaping a good harvest of positive perceptions. There has been a phenomenal improvement of Chinese influence and popularity in Nepal over the last few months. While Indian projects have witnessed attacks by radical Maoist groups and local people due to the perceived border blockade from the Indian side, Chinese companies are being allotted new infrastructure projects.
Interestingly, on December 17 last year, Chinese CAMC Engineering Company won a contract to carry out a feasibility study for the construction of the Kathmandu-Pokhara electric railway. The project is seen as part of the trans-Himalayan railway, envisioned by China, to connect Kathmandu. There are also speculations that Nepal and China might ink a deal to source petroleum products from China during Chinese President Xi Jinping’s visit to Kathmandu sometime in 2016. If Nepal gets an oil pipeline from China, the contours of politics in the Himalayan border region of India could change. According to initial estimates, if the agreement happens, China will claw a third of the 1.3 million tonnes of India’s petroleum exports to Nepal worth about Rs 9,000 crore.
There is another aspect where China is being benefitted from the strained Indo-Nepal ties. The Himalayan nation which has India on three of its four sides has a huge significance for India from the security perspective. Nepal’s porous 1,751-km border with India remains a boon for militants and Pakistani and Chinese smugglers.  Today, with an India-unfriendly Government in Kathmandu, New Delhi must vie with China for influence in a country that was its security preserve for more than half a century. Ever since the 1951 Chinese annexation of Tibet eliminated the outer buffer between India and China, Nepal has served as the main inner buffer and social or political turmoil in Nepal directly impinges on Indian security.
However, their tense relationship is not only affecting India, but it is also taking an equal, if not more, amount of toll on Nepal. The Himalayan nation also cannot afford to have souring ties with India. The country has 65% trade with India. Of the total foreign direct investment in Nepal, 46% is from India.  About 26% of tourists to Nepal are from India. Tens of thousands of Nepalis live in India and a large number of Indians live in Nepal doing business and work 
Our Cover Story analyses the chances of “re-setting” Indo-Nepal ties, where New Delhi went wrong and why it is important for India to have a cordial relationship with the Himalayan nation.
The six-day India visit of the new Nepalese Prime Minister, Khadga Prasad Sharma Oli, beginning February 19 is a concrete sign that Kathmandu does not wish bilateral ties to be damaged. Oli’s trip has assumed greater significance against the backdrop of India-Nepal relations reaching an all-time low due to Madhesi protests and India's displeasure over the new Nepalese Constitution promulgated in September last year. 
It may be a good starting point for India to publicly acknowledge the positive moves made by Nepal and if Kathmandu shows clear intent, the Indian side could also be persuaded to use its goodwill with various elements in Nepal to work on a negotiated solution. 


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