Nepal Between China and India: Difficulty of Being Neutral 3030999734, 9783030999735

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Nepal Between China and India Difficulty of Being Neutral Gaurav Bhattarai

Nepal Between China and India

Gaurav Bhattarai

Nepal Between China and India Difficulty of Being Neutral

Gaurav Bhattarai Department of International Relations and Diplomacy Tribhuvan University Kathmandu, Nepal

ISBN 978-3-030-99973-5 ISBN 978-3-030-99974-2 (eBook) https://doi.org/10.1007/978-3-030-99974-2 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

As extracted from Nepali Essayist and Poet Laxmi Prasad Devkota’s essay Is Nepal Small (English translation by the author) Crystal of diamond is small; Small is a pearl bead; A gem is small; Small is the sweet words of a child; Small is the pupil of the eye;

To Aama-Buwa, Mummy-Baba, Muwa-Buwa, Dulahi, Buhari-Bhai, and Sala-Salis for ceaselessly enduring my “unusual” engagements with laptops, books, and archives and incessantly inspiring me to see big in small.

Preface

Ardently pointing at the topographical map hung on the wall of the VIP lounge of Tribhuvan International Airport clearly displaying Nepal’s location between India and China, the Chairman of the Commission on Foreign Affairs of the National Assembly of the Kingdom of Cambodia Yara Suos asked me gently, ‘How would you manage?’ I tactically answered “it’s all about balancing”. Among various other survival strategies available to balance its Gulliverian neighborhood, Nepal’s attempt to neutrality has a prominent role in Kathmandu’s foreign policy behavior. Despite its historical experience as a non-neutral state, Nepal is expected to manifest a neutral foreign policy whenever tensions and differences run high between its two gigantic neighbors—India and China. But, such expectations from Nepal are rarely met as the Himalayan state has its own geopolitical ambitions that exasperate its difficulty of being neutral. Even though Nepal has been pursuing an independent foreign policy towards her southern and northern neighbors, neutrality has a pivotal role in its foreign policy claims. At least until 1948, when Nepal sent its troops to assist Indian government in dealing with the Hyderabad issue, Nepal had a non-neutral history. Since then, Nepal has preserved its militant neutrality at least in the neighborhood as the country also dispatches peacekeeping missions in different conflictporn regions under the framework of the United Nations. It cannot be denied, however, that Nepal has always faced difficulty in maintaining

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political neutrality with its two powerful neighbors. This book is about the same difficulty. Nepal’s claim to neutrality is driven by its geostrategic location. In its foreign policy priorities, neutrality was accommodated only after establishing diplomatic relations with China in 1955. But, Nepal’s neutrality has been variously critiqued and appraised, particularly during those junctures, when Nepal finds itself in a difficult position to balance both of its immediate neighbors. Apprehending the same, various literature have been produced, and different studies have been conducted gauging Nepal’s position in relation to India and China. Still, the actors and factors contributing to the causes and failures of Nepal’s claim to neutrality haven’t been adequately studied. Thus, this book centers on neutrality as a form of statecraft utilized by Nepal and aims to critically examine the challenges that Nepal’s claim to neutrality faces today. The scope of this book lies in framing how small states are coping with the rise of China and how Nepal has strategized its claim to neutrality in this context. Chapter 1 reveals various instances indicating Nepal’s difficulty of being neutral against the backdrop of Sino-Indian rivalry. Situating Nepal’s claim to neutrality into the literature on the concept of neutrality, this chapter explores how Nepal, without a grander history of neutrality that is further compounded by the dearth of foreign policy research institutions on neutrality, exploits its claim to neutrality only to draw geopolitical benefits out of the Sino-Indian rivalry. Distinctiveness of this study lies in raising the imperative questions regarding how Kathmandu’s neutrality is perceived by Nepal’s immediate neighbors, India and China, specifically within the backdrop of rising prowess of New Delhi and Beijing, whose relations are principally marked by security competition. Thus, Chapter 2, not restricting to the period after 1955 A.D., when Nepal established its diplomatic relations with China, highlights how New Delhi has understood Nepal-China ties. Surveying the evolution of India’s foreign policy towards Nepal in relation to China factor, the influence of India’s foreign policy securitization on Nepal’s claim to neutrality is calculated by analyzing India’s neighborhood policies from the days of India’s first Prime Minister Jawaharlal Nehru to incumbent Prime Minister Narendra Modi. In Chapter 3, we get to know how Beijing has sensed Nepal-India ties. Underlining Nepal’s inability in deciphering Chinese motives in Nepal, this chapter surveys the historical relations between Nepal and China, mostly before the establishment of Communist China and Beijing’s

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efforts to counterbalance Indian influence in Nepal, particularly after the annexation of Tibet. To ward off any kinds of impediments against its strategic interests in Nepal, China’s perception of Nepal-India ties, today, is shaped by Beijing’s foreign policy of ‘One China’ and Belt and Road Initiative (BRI). Although China has always counseled Nepal to maintain healthy relations with India citing cultural and civilizational bonds between the two neighbors connected by open borders, China’s increasing presence in the South Asian region has already discomfited India, particularly by the trans-Himalayan railways piercing Nepali mountains, which New Delhi considers as its defense frontier. While the scholarly pursuits of this book are concentrated on the perception of two Asian giants towards Nepal’s attempt to neutrality, this study presents the instances, where Nepal’s claim to neutrality has been severely questioned and critiqued by its neighbors, obliging the foreign policy experts and practitioners to assess and examine the relevance of neutrality for Nepal. Beijing’s perception of Nepal’s mercenary Gurkha soldiers fighting against China in its 1962 border war with India, along with New Delhi’s perception of increasing Chinese presence in Nepal through aids and investments, are critically examined. The way India perceives Nepal-China relations has often influenced Kathmandu’s neighborhood foreign policy and its attempts to neutrality. For instance, India’s 2015 blockade on landlocked Nepal impelled the latter to diversify its foreign policy and trade relations by exploring the trade and transit route through China. It stimulated the policymakers in New Delhi to perceive Nepal-China ties in such a manner that China was not only hauled in the Nepal-India border problems that resurfaced in 2020 but also identified ‘China connection’ in Nepal’s new map that incorporated the disputed Himalayan territories with India. Although China has perceived Nepal-India relations as civilizational and cultural, Beijing’s perception of Nepal-India relations should be understood in the context of luring Nepal towards China-led Belt and Road Initiatives (BRI) projects, which is interpreted by New Delhi as Nepal’s cessation of its neutrality. Prodigiously, Beijing is not pursuing this relationship out of charity and there exists a potential risk for Nepal to be debt-ridden. While Chinese lending in the sub-Saharan Africa, South Asia, Latin America and Caribbean, Europe, and East Asia has substantially grown, global concerns over the issue of debt trap faced by countries including Sri Lanka and the Maldives and the matter of ‘land grab’ in Africa are the apt examples indicating the probability of debt trap and loss

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of state sovereignty while embracing the BRI projects. Still, in the context of ‘debt trap’ allegations faced by China, Kathmandu finds an opportunity to seek grants, instead of loan, to finance the proposed trans-Himalayan railway linking China with South Asia via Nepal. Throughout the book, Nepal’s claim to neutrality is portrayed as Kathmandu’s ‘survival strategy’ in dealing with its gigantic neighborhood. But, in today’s globalized and interdependent world, an ambivalence claim to neutrality won’t prod positive outcomes. In the same light, Chapter 4 examines two pertinent questions: How far Nepal’s claim to neutrality has been sanguine and productive in achieving Nepal’s national interest? And, are there any prospect of upgrading Nepal’s survival strategies to the gallant strategy of sustenance, while India and China have emerged as the economic powerhouse? Introducing a new discourse of sustenance strategy, which has more to do with sustaining as a market state than a territorial state, this chapter claims that Nepali statecraft is menacingly fascinated by the survival strategies that abandoning them will only frustrate the power elites in Kathmandu. In the absence of inclusive and scientific institutions in Nepal, Kathmandu’s voyage to sustenance is thwarted by the medieval foreign policy institutions and antiquated economic institutions constraining Nepal’s foreign policy to the neighborhood. Nepal’s failure to go beyond the clutches of the Gulliverian neighborhood is, however, advantageous only to the Nepali power elites incessantly wishing to prolong their stay in the government, either by appeasing the neighbors or through tumultuous acts of balancing. Nepal has conventionally galloped different survival strategies to balance its two immediate neighbors. While suggesting a systematic and orderly shift to sustenance strategy, this study has realized that Nepal’s somberly feigned geopolitical ambition prevents Kathmandu from materializing the sustenance strategy. Conceptually, the sustenance strategy is closer to Philip Bobbit’s concept of the Market State over Han Morgenthau’s concept of the Territorial State, with the help of which, Nepal may take advantage from the vistas of opportunities briskly offered by the rise of India and China, beguiled by the emergence of new regional and sub-regional forums, and profusely exhorted by international trade, globalization, and open borders. Appreciating the changing systemic imperative, especially in the context of Xi’s aggressive strategy and Modi’s efforts to withstand Chinese pressures up to a point, the sustenance strategy demands sovereign equality and dismisses Nepal’s neutrality conundrum. But, until Nepal keeps on resorting to the Cold

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War survival strategies of hedging and balancing, along with a deficiency of required foreign policy research institutions, the stupendous benefits offered by sustenance strategy may not be prolifically realized. The failure and success of Kathmandu’s claim to neutrality in this regard, particularly in attracting investments from both sides, is highlighted by including data on the economic and infrastructure activities of the two powerful countries and their increasing attention to the Himalayan frontier. Also, the success and failure of Nepal’s neutrality strategy and its limitation, in the long run, are discussed in the book. Particularly, Chapter 5 explores the relevance of Nepal’s claim to neutrality in the present context citing the disastrous policy failure in opportunely accommodating the conflicting interests of major powers and great powers including China, India, and the US. Thus, this chapter makes the Foreign Policy Analysis of US-sponsored Millennium Corporation Challenge (which faced a political fiasco in Nepal) and China-led Belt and Road Initiative (BRI) projects (that have confronted unusual delays in Nepal) as an attempt to succinctly assess the relevance of neutrality for Nepal, where major political players remain hectically occupied, despite their abominable failure, to accommodate the conflicting interest of powerful countries. Moving further, the book also examines whether claim to neutrality has eased Nepal in moving beyond the Cold War survival strategies of balancing. Today, as Sino-Indian relations are not only driven by geopolitical competition and economic cooperation, but largely by territorial conflict, a new discourse is getting popularity among the security and foreign policy experts in Nepal i.e., “Small Power.” Not the unpretentious self-perception of the strategically located poor and landlocked country, what is the salability of such discourse in the regional and international affairs and what impacts it has on Nepal’s claim to neutrality? Chapter 6 critically mulls over it and claims that a dollop of geopolitical ambition mayn’t help Nepal in promoting its image abroad. Although there is no conceptual divergence between what constitutes a small state and small power, this study agrees that there is nothing wrong in being perceived as a small state because “equating bigness with success” only signals a hypocritical variant in foreign policy. Still, nation branding has a role to play in international politics. Nepal’s sojourn in branding itself as a small power has actually emanated from the long-standing desire of the power elites in Kathmandu, whose act of ‘balancing,’ is the prime source of Nepal’s small state syndrome, however.

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While the idea of smallness in the international studies designates an unending conflict between the idealistic prescription of ‘sovereign equality’ and the everyday hierarchy among the countries, the pertaining question is whether the geopolitical ambition overwrought with a convenient pretence of perceiving Nepal as a small power is salable and merchantable? Located between the two nuclear powers, India and China, which are also the oldest and biggest civilizations with big markets, large population, impressive economy, Nepal has been perceived small by its size, location, and influence. Most of the available literature on Nepal’s smallness identifies Gulliverian neighborhood as the prime cause of Nepal’s small state behavior. But no heed is paid on how Nepal has developed small state syndrome from its own structural inability and organizational incompetence resulting into amateurish foreign policy. While no attention is given to the internal configuration of small state syndrome, how would Nepal identify the sources of small power? In this book, small state and small power aren’t necessarily distinguished as two separate concepts as they have been used interchangeably in the available literature. Conceptually, this study borrows the same understanding and concurrently doubts the salability of perceiving Nepal as a small power, at least until the country reconsiders the internal make-up of its political, economic, and bureaucratic institutions instead of effortlessly identifying the colossal neighborhood alone as the key source of its small state syndrome. Although the terms, small powers and small states are used analogously, the former retains an assertive overtone while the latter reverberates a submissive undercurrent. But, limiting small power to discourse, when its behavior is incongruous and colossally driven by small state syndrome won’t yield any phenomenal advantage and would only expose the hypocritical strain in Nepal’s foreign policy. Geopolitically speaking, Nepal’s foreign policy strategy is targeted to the survival of Nepali state, which is the predominant feature characterizing a small state. But, if Nepali policy makers are genuinely willing and able to ameliorate Nepal’s small power capabilities, formulating suitable plans and policies, and devising appropriate institutions and pertinent strategies is prerequisite. To the doctrine of ‘sovereign equality,’ the idea of ‘smallness’ in international relations appears as a colonial construct. Nepal’s smallness, however, ensues from its foreign policy behavior towards its immediate neighbors. Although, today, the discourse of perceiving Nepal as a small power is gaining admiration among the Nepali security experts,

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the salability of such discourse remains limited to Kathmandu, unless Nepal reviews the domestic sources of its national power capabilities, and displays a political will to bolster their efficacies pursuing the spirit of accountability, transparency, and reliability. In the lack of which Nepal’s small state syndrome will continue to haunt its foreign policy priorities and behaviors. Thus, this book underlines the significance of democratic and inclusive institutions, evidence-based policies, and result-oriented strategies to alter Nepal’s smallness (caused by small state syndrome in the paucity of institutions necessitating to think big) with small power capabilities (which is not only about size, population, geography, and influence but more about the policy choices and their implications). If such an endeavor could be made, Nepal’s ambivalent claim to neutrality may not be further ‘diluted’ by the small state syndrome, fundamentally afflicting its neighborhood foreign policy. Kathmandu’s power elites, today, desire to ‘unlearn’ Nepal as a small state and ‘re-conceptualize’ it as a small power. But, it requires Kathmandu to ambitiously materialize its geostrategic strength, and in doing so, there are greater chances of its claim to neutrality being compromised. In the process of upgrading its national power capabilities, Nepal’s neutrality may be variously perceived by its two nuclear-armed neighbors and such perceptions are central to the assessment of Nepal’s attempt to neutrality. At the first glance, Nepal appears small only in front of its Gulliverian neighborhood. When we dig further, we find Nepal is small more because of its own structural deficiencies. It is small not only in its inability to manage the conflicting interests of the two neighboring countries but also for its failure in handling its own interest in the neighborhood and beyond. The interest in small states within the International Relaions (IR) has certainly taken momentum in the last few years. There is a growing body of literature that ties in the notion of “agency” of small states/powers. As such, the book add to the growing body of literature tied to small states, specifically, the study of Nepal’s foreign policy. The emphasis on neutrality offers a peculiar lens that is often not explored. Thus, this study reviews the ride-ranging literature available on neutrality and its relations with changing dynamics of world and regional order, foreign policy, security, and economic implications to highlight what it means to be neutral and how Nepal has strategized its claim to neutrality in coping with the rise of China, at the present context, and particularly in managing the interest of major powers in Nepal, historically. Raising the question of

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how this neutrality is perceived by Nepal’s neighbors, India and China, this study aims to evaluate the success and failure of Nepal’s strategy and its limitation amidst the increasing attention of New Delhi and Beijing to the Himalayan frontiers. Thus, at present, Nepal is not able to overcome its structural weakness triggered by its small economy and an eensy-weensy military capability. But, with the help of certain internal and external measures, Nepal could compensate for its structural weakness. Still, while undertaking such measures, there is a possibility of Nepal’s neutrality being compromised. Chapter 7, which is the concluding chapter, argues how Nepal’s attempt to neutrality cannot evolve in an institutional and functional manner against the backdrop of Sino-Indian rivalry. While the heightened rivalry between the two Asian giants at the regional front also exacerbates their conflicting and competing interests in Nepal, decision-makers in Kathmandu are obliged to pay a close attention to their interests and concerns. Today, while China aims to materialize its BRI projects in Nepal, particularly the trans-Himalayan railway to fulfill its long-standing ambition to get connected with the South Asian market via land, India doesn’t want to miss any opportunity to halt China’s increasing influence in South Asia. In making attempts to help them accomplish their interests through the act of balancing, Kathmandu-based power elites often look for the ways to prolong their stay in the government. In case of a failure in accommodating the interest of the two powers, small states are penalized with coercive foreign policies that inflict pains and sufferings on the general public as the power elites remain busy in shielding his/her regime or government. Foreign policy securitization has heavily directed their neighborhood policies, in the context of their ‘great power’ ambitions that have barred small countries like Nepal from pragmatically adhering to the spirit of neutrality. Because, as this study suggests, their rise has been without responsibilities towards the small countries in their vicinity. Even though the cultural and civilizational philosophy that drove their worldviews for centuries was not conflictual; today, the largest democracy India and the largest economy China perceive their borderlands as the source of conflict, not a site of civilizational and cultural contact. Their territorial disputes and rivalries are much loathed by the general public in Nepal and other small countries in their backyard. But, the power elites of the small countries, including Nepal, take no less time to exploit the Sino-Indian conflict

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to prolong their stay in power at the cost of people’s hopes and aspirations from the economic rise of India and China. It is the upshot of the ad-hoc neighborhood policies initiated by the two Asian powers, which are executed without bearing a sense of responsibility and accountability towards the neighborhood, from where the stories about their rise literally begin. By unveiling Nepal’s case of neutrality to the world, the contents in the book have been fashioned to cater to the needs of the international relations scholars interested in knowing about the strategies adopted by the small states in coping with the rise of China. The book may also benefit the policymakers of the small countries in South Asia by offering the analogies from Nepal’s case, which could be a source of insight in the context of policy choices and policy problems. Because, whereas the general public in South Asia has developed a sense of inspirations and hopes for better connectivity and regional development from the series of spectacular transformation taking place in China and India, the decision-makers in the small countries cite numerous challenges at the backdrop of geopolitical contestation between the two Asian giants to eventually regenerate survival strategies in their foreign responses. Thus, this study intends to fulfill the needs of the foreign policy experts and practitioners willing to know about the similarities and differences in the foreign policy priorities, foreign policy behaviors, and foreign policy objectives of India and China, explicitly towards the small states in the South Asian region. This book, in particular, helps them to understand how such similarities and differences are the result of New Delhi’s renunciation of the Indian ideal of “Vasudhaiva Kutumbakam,” which means “the entire world as a family” and Beijing’s relinquishment of the Chinese ideal of “Shijie Datong,” which implies “the world as a family.” Kathmandu, Nepal

Gaurav Bhattarai

Acknowledgments

After Prof. Dr. Anand Srestha kindly introduced me to the world of Nepal’s foreign affairs by inviting me to join Sangam Institute for Policy Analysis and Strategic Studies as an Assistant Editor in the year 2009, I have always remained fascinated by the different dimensions of Nepal’s foreign affairs, particularly by Kathmandu’s act of balancing. I have always understood Nepal’s claim to neutrality as ambivalent and uncertain and was looking for the ways to write and publish about it. Thus, I am thankful to Palgrave Macmillan for providing me this opportunity, particularly Senior Editor of the Political and Development Studies, Alina Yurova. Also, I acknowledge the efforts of Ashwini Elango, the project coordinator at Books Production Department at Palgrave Macmillan, for his invaluable technical support and assistance. I really appreciate the comments and reviews passed by the experts and reviewers on the proposal and the preliminary draft. I am thankful to the support from Mathru Srinivasan, the book project manager at Straive, for overseeing the production of the text of the book from manuscript to final print and online files. Kathmandu Winter, 2022

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ACKNOWLEDGMENTS

Map 1 Nepal in South Asia (Source United Nations Cartographic Section. Reprinted by taking permission from United Nations Publications Board.)

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Map 2 Map of Nepal along with its bordering towns adjoining China on the North and India on the South. It is created with Nepal boundary data taken from Local Boundaries, which is licensed under Creative Commons Attribution 4.0 International (CC BY 4.0)

Contents

1

Nepal’s Neutrality in Present Context Nepal’s Neutrality Riddle Neutrality: Policies and Postures Hiding or Binding? Evolution of Nepal’s Neutrality References

1 2 7 12 17 24

2

India’s Perception of Nepal-China Relations Nepal’s Quinquennial Missions Himalayas as Frontiers Peaceful and Stable Neighborhood Doubts and Suspicions Zone of Peace Proposal Policy of Securitization References

31 32 36 47 52 55 57 62

3

China’s Perception of Nepal-India Relations How Does China Think? China’s Wei Qi Lense Intruding China, Defensive India Tibet Factor in China’s Perception Coping with China’s Rise References

69 71 75 76 79 86 100

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CONTENTS

4

From Survival to Sustenance Nepal’s Neutrality: Survival Strategy Beyond the Neighborhood Nepal’s Geography: Prison or Power Aids and Interests Neutrality as Disguised Hedging Survival, Sustenance, and Success References

105 106 113 116 120 125 135 143

5

Relevance of Neutrality BRI and MCC: Antagonistic and Hostile? MCC Controversy and China Factor BRI: Balancing Strategy for Nepal Beijing’s Growing Footprints BRI Projects in Limbo? Can MCC and BRI Go Together? References

147 150 154 159 164 171 174 177

6

Salability of Perceiving Nepal as a Small Power Exploring Salability Small States or Small Powers Small State Syndrome Small Is Beautiful References

181 182 186 193 199 207

7

Rise with Responsibilities New Asian Drama India’s Neighborhood First Policy Himalayan Defense: Continuity and Change Bureaucratization of Policies Neo-Kautiliyan World View China’s Neighborhood Policy Tibetan Question Insecure Borders: China’s Encroachment? Xi Jinping Thought: Sinicization of Nepali Political Parties Responsible Rise? References

211 212 220 225 227 231 233 241 244 246 249 252

Index

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Abbreviations

AD AFP AIIB ASEAN AUKUS BBC BCIM BECA BIMSTEC BIPPA BJP BRI BRICS CAI CFR CGGC CIA CIDCA CINC CMEC CONCOR CPC CPEC

Anno Domini Agency France-Presse Asian Infrastructure Investment Bank Association of Southeast Asian Nations Trilateral security pact between Australia, the United Kingdom, and the United States British Broadcasting Corporation Bangladesh, China, India, and Myanmar Economic Corridor Basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Bilateral Investment Protection and Promotion Agreement Bharatiya Janata Party Belt and Road Initiative Brazil, Russia, India, China, and South Africa Comprehensive Agreement on Investment Council on Foreign Relations China Gezhouba Group Corporation Central Intelligence Agency China International Development Cooperation Agency Composite Indicator of National Capability China-Myanmar Economic Corridor Container Corporation of India Ltd Communist Party of China China-Pakistan Economic Corridor xxv

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ABBREVIATIONS

CPN-UML CSDP CTA DPR EPG EU FDI FOSS GAC GDP GNI GSP HMG HRW ICCPR ICWA IEXL IFA IMF IPS IR LAC LDC MCC MEA MNC MOU MP MSR NAM NATO NCP NEA NEFA NR NRB ODA PLA PM POW PPP PPP PRC

Communist Party of Nepal (Unified Marxist–Leninist) Common Security and Defense Policy Central Tibetan Administration Detailed Project Report Eminent Persons’ Group European Union Foreign Direct Investment Forum of Small States General Administration of Customs Gross Domestic Product Gross National Income Generalized System of Preference His Majesty Government Human Right Watch International Covenants on Civil and Political Rights Indian Council of World Affairs India Energy Exchange Limited Institute of Foreign Affairs International Monetary Fund Indo Pacific Strategy International Relations Line of Actual Control Least Developed Countries Millennium Challenge Corporation Ministry of External Affairs Multi National Corporation Memorandum of Understanding Member of Parliament Maritime Silk Road Non-Aligned Movement North Atlantic Treaty Organization Nepal Communist Party Nepal Electricity Authority North East Frontier Agency Nepali Rupee Nepal Rastra Bank Official Development Assistance People’s Liberation Army Prime Minister Prisoners of War Partnership for Peace Purchasing Power Parity People’s Republic of China

ABBREVIATIONS

PTI QUAD RMB RSS SAARC SAGAR SCA SCO SDP SIPRI TAR TEPC TFA UAE UK UN UNCDP UNCTAD UNGA UNHCR UNO UP US USA USSR WTO ZOP

Press Trust of India Quadrilateral Security Dialogue Renminbi Rashtriya Swayamsevak Sangh South Asian Association for Regional Cooperation Security and Growth for All in the Region Strategic Competition Act Shanghai Cooperation Organization Small Development Projects Stockholm International Peace Research Institute Tibetan Autonomous Region Trade and Export Promotion Centre Trade Facilitation Agreement United Arabs Emirates United Kingdom United Nations United Nations Committee for Development Policy United Nations Conference on Trade and Development United Nations General Assembly United Nations High Commissioner for Refugees United Nations Organization Uttar Pradesh United States United State of America Union of Soviet Socialist Republics World Trade Organization Zone of Peace

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List of Figures

Fig. 1.1

Fig. 3.1

Fig. 3.2

Fig. 3.3

Fig. 3.4

In this February 2018 Photo, Gurkha pensioners and their dependents are thronging and awaiting their turn to receive pays and pensions from the Indian government at Butwal Pension Camp, Phulbari (From Author’s Archive) The newly inaugurated road linking Uttarakhand’s Pithoragarh to Tibetan Autonomous Region via the Lipulekh Pass (Photo Courtesy: RSS) Statue of Manjushree on the southern outskirts of Kathmandu. According to legend, Manjushree was the first Chinese national to visit Nepal, when Kathmandu valley was a lake and not habitable. It was Manjushree, who cut the Chobhar hill to release the water from the snake-infested lake, and made Kathmandu inhabitable (From Author’s Archive) King Mahendra (wearing black goggles) with Prime Minister B. P. Koirala. While King Mahendra diversified Nepal’s foreign relations and introduced Nepal to the major multilateral forums, Koirala’s role in the democratic movement of Nepal is undeniable (Photo Courtesy: Nepali Times) A man sweeps “No Man’s Land” between Nepal and India at the Sunauli border point in an early morning of February 2019 (From Author’s Archive)

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LIST OF FIGURES

Fig. 7.1

Fig. 7.2

Fig. 7.3

Fig. 7.4

Photo 2.1

In the 2017 picture stands the gateway to China from Kerung borders, which is geographically hostile to conduct normal trade between the two countries (Photo Courtesy: Aayus Timilsina) Anti-Indian graffiti in Nepali vernacular language on the public toilet of Devghat, a pilgrimage destination for Hindus in Nepal and India. Unlike the placards targeted against the Indian state and the Indian embassy, which is not a rare sight in Kathmandu, this graffiti is targeted to a well-known Nepal expert from India, who has always been vocal on Nepal-India relations (From Author’s Archive) Nepal’s former prime minister Madhav Kumar Nepal (donning Nepali hat) dances in an evening cultural program organized on the premises of Nepal’s five-star, Soaltee Hotel, while the then Indian ambassador Ranjit Rae (extreme left with spectacles) watches him gracefully while audiences take the snapshots from their phones Horses grazing on Nepal-China borderlands in the Limi valley of Namkha Rural Municipality in Humla district of Karnali province. Limi, which geographically resembles Tibetan topography, is used by travelers to reach Kailash Mansarovar Lake—a pilgrimage destination to both Hindu and Buddhist (Photo Courtesy: Tenzin Norbu Lama) The yellow-colored house with green windows is the private residence of Chiniya (Chinese) Lama residing in the Bouddhanath area, which is also popular as the Vatican of Tibetan Buddhism. The first Chiniya Lama, Taifo Zhing, came to Nepal as a Chinese monk from Sichuan province of China during the premiership of Jung Bahadur Rana, who initially kept him as his interpreter. Zhing’s negotiation was very helpful in ending the third Nepal-Tibet war in 1855 AD. As an award for his contribution, he was allotted to head the Bouddhanath Stupa. Since his days, the chief priest of the Bouddhanath temple is popularly known as Chiniya Lama (Chinese Lama) (From Author’s Archive)

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LIST OF FIGURES

Photo 2.2

Photo 2.3

Photo 2.4

Photo 4.1

Photo 4.2

Photo 5.1

Photo 6.1

Indian Prime Minister Nehru (second from left) with the last Rana Prime Minister Mohan Shamsher (third from left) in a reception in 1950 in New Delhi (Photo Courtesy: Sanjay Upadhya) Nepal’s Prime Minister Mohan Shumsher Rana and Indian Ambassador Chandreshwar Prasad Narayan Singh signing the Treaty of Peace and Friendship in 1950 (Photo Courtesy: Nepali Times ) Indian Prime Minister Jawaharlal Nehru addressing a state banquet which was given in his honor in June 1959 by King Mahendra and Queen Ratna. On the extreme right, Prime Minister B. P. Koirala is listening (Photo Courtesy: Sanjay Upadhya) Chinese President Xi Jinping and Nepal’s President Bidhya Devi Bhandari raising their glass to toast during the state dinner at Soaltee Crown Plaza in Kathmandu on October 12, 2019 (Photo courtesy: National News Agency of Nepal) Chinese flag waves in the air, on the threshold to the reconstruction site of the nine-story palace at the Basantapur Durbar Square in Kathmandu. The historical palace was devasted by the 2015 earthquake and is being reconstructed today with the financial support of the Chinese government (From Author’s Archive) Partially opened Chinese market on the backdrop of lockdown in Jyatha of Thamel in Kathmandu, which is also known as “mini-China town”. Nepalis selling their goods in one of the major tourist destinations of Kathmandu are heard complaining of increasing Chinese influence displacing their business (From Author’s Archive) Heavy dust piles up on the road leading to the Birgunj border point in Nepal-India borderlands. Roads from Raxaul on the Indian side to Birgunj on the Nepali side haven’t been repaired and are in the dilapidated state since it was dug while constructing the cross-border petroleum pipeline. The sorry state of the major import route for Nepal often leads to traffic congestions in the Nepal-India borderlands (Photo Courtesy: Abhishek Jha)

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40

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51

117

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List of Tables

Table 4.1 Table Table Table Table

4.2 4.3 5.1 7.1

The volume of Nepal’s annual trade with India (Rs. in million) Direction of Nepal’s foreign trade (Rs. In Ten Million) Major events influencing Nepal’s claim to neutrality FDI stock of India and China as of mid-July 2020 Share of global military expenditure of top ten countries with spending in 2020

112 113 128 167 213

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CHAPTER 1

Nepal’s Neutrality in Present Context

“The darkest places in hell are reserved for those who maintain their neutrality in times of moral crisis,” wrote Dante Alighieri in The Divine Comedy. In today’s international politics, Dante’s contemplations quite suit the perception of the powerful countries, who have been leading alliances and strategic partnerships. Because, neutrality is what great powers don’t like, and what strategically located small countries are fascinated by. To American President Woodrow Wilson, neutrality was a “negative word which doesn’t express what America ought to feel.” But, to the former King of Nepal, Birendra Bikram Shah, any claims to neutrality particularly through his Zone of Peace proposal, was the source of strategic autonomy in an uncertain and hostile environment. Because, great powers have the power, clout, and dominance to avoid neutrality, of which small countries are deprived, however. Therefore, neutrality is also perceived as the survival strategy of small countries, particularly when they are surrounded by the rival countries or contending powers. Still, some of the small countries merely make claims to neutrality without effectively maintaining it, and Nepal’s case suits that better. With same understanding, this chapter unveils various instances about the difficulty of being neutral, for the countries like Nepal, who have been facing the ramifications of the geopolitical contestation in the South Asian region between Beijing and New Delhi. By delving into the broader literature on the concept of neutrality within the International Relations (IR) © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. Bhattarai, Nepal Between China and India, https://doi.org/10.1007/978-3-030-99974-2_1

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and Political Science and situating Nepal’s case within it, this chapter highlights even though small countries are unremittingly aware of the competition between India and China in the South Asian region, a similar level of realization is apparently missing in their foreign policy formulations and enactments. Nepal’s claim to neutrality is a befitting example, which is theatrically exploited to garner more benefits from the vicissitudes of Sino-Indian rivalry and to neutralize each other’s influence in the infant Republic.

Nepal’s Neutrality Riddle As an imperial and expansionist power in the Himalayas from the days of its unification in 1769 AD to the Anglo-Nepal war of 1815 (Regmi, 1999), Nepal never remained neutral. During the period of colonialism in South Asia, and particularly after losing the war with British in 1816, Nepal never exercised the policy of neutrality. Rather, Nepal was raiding Tibet (Tenzin, 1982), assisting British India in Sepoy Mutiny (Tiwary, 2009), and stood by Britain in the two world wars (Caplan, 1991). Thus, Nepal has a non-neutral history. But, with the annexation of Tibet by the Communist China, and following independence of India, Nepal appeared very small in terms of location and influence. After the fall of Tibet, Nepal had no other option than to inch closer towards India (Ramachandran, 2003). With the passage of time, the bond established by socio-cultural homogeneity, open borders, and shared political socialization (as the first batch of political leaders in Nepal had also fought in Indian independence movement) wasn’t sufficient to deal with the independent India. Kathmandu had to balance Indian influence in Nepal. In those days, until Nepal hadn’t joined the United Nations and established diplomatic ties with China, Nepal was almost a “semi-satellite” state to India (Rose & Dial, 1969). Nepal joined the United Nations in 1955 and had diplomatic relations with China in 1956. Although Nepal had diplomatic relations with the two great powers, including Britain and the US, before it established diplomatic relations with India, both the countries were geographically distant. Even China was a distant neighbor for Nepal owing to the unsurmountable geography. Still, Nepal fathomed to detect New Delhi’s fretting concerns over Nepal’s budding relations with China. New Delhi often tried to limit Nepal’s engagement with China citing the 1950 treaty signed between Nepal and India (Adhikari, 2012). When Nepal’s two neighbors went to war in 1962, Nepal declared its neutrality

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(Burke, 1963). Despite not having military alliance, Nepali nationals were fighting for India against China in the Himalayas (Cowan, 2018), and it was for the first time, Nepal officially declared its neutrality (Khanal, 2000). Since then, Nepal has witnessed various episodes of Sino-Indian standoffs and skirmishes, and Nepal has always stayed neutral. It is Nepal’s militant neutrality. But, the focus of this book lies in initiating discussion on Nepal’s foreign policy neutrality, or let’s say political neutrality, not legal neutrality. Because, Nepal’s political neutrality, particularly in the context of the rise of China, has been variously disparaged as an act of balancing, or the strategy of hedging. Today, when the Nepali leaders, in their speeches and statements, have superfluously branded Nepal as a bridge between India and China, what does Nepal’s claim to neutrality denote (Bhattarai, 2018). In the lack of clear-cut policy directives in regard to Nepal’s attempt to neutrality, there is always a probability of being burden, instead of bridge, to both of its neighbors. But the pertaining question is which aspect exceedingly contaminates Nepal’s claim to neutrality: Is it Nepal’s ambivalent stance over claim to neutrality or the policy of securitization adopted by the two nuclear powers towards the Himalayan country? When the oligarchic Rana rule in Nepal came to an end in 1950 with democratic revolution, unprecedented changes had taken place in Nepal’s neighborhood. India had got independence from the British colonialism in 1947 while China had annexed Tibet in 1950. Since then, Kathmandu has experimented with various political systems and withstood several political upheavals. But, not all of them unpretentiously placed neutrality in their foreign policy priorities and behaviors targeted towards the neighborhood and beyond. For instance, while British had quit India in 1947 and New Delhi had new rulers, King Tribhuvan in Kathmandu was clandestinely working with the Nepali revolutionaries and Indian ambassadors, including Surjit Singh Majithia (1947–1949) and Chandreshwar Prasad Singh (1949–1952) (Leuchtag, 1958) to secretly escape from the palace to India and overthrow Rana system, which had marginalized Shah kings after the military takeover of 1846, and was greatly dependent on the British for its survival. The Nepali king was so eager to take a refuge in India and conspire against Ranas that he had even developed code words to materialize the plan: Serpent—A Rana Moor—The King

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Big Snake—Prime Minister Mohan Shumsher Bird—Ambassador Kite—Airplane Flower—Letter Storm—Evacuation (Leuchtag, 1958) Finally, he was able to escape with his family in 1950 to the Indian embassy, from where he flew to Delhi, where tripartite agreement was signed between King, Ranas, and the Nepali Congress (a democratic force which was fighting against Ranas and had taken shelter in India) in February 1951 that led to establishment of democracy in Nepal. King Tribhuvan’s demeanor set a precedent in Nepali politics, however. Since then, in different periods of time, Nepali political leaders have multifariously sought India’s assistance and support (Dixit, 2020). Indian Prime Minister Jawaharlal Nehru himself arranged the talks between Ranas and the Nepali Congress leaders, in his presence, and offered premiership to Ranas in an interim government. Indian bureaucrats were guiding Nepal’s cabinet decision and monitoring Chinese activities in the Himalayas (Muni, 2009; Dixit, 2020). Such was the extent of Indian influence in Nepali politics and any attempt to neutrality was still a far cry for Nepal. Nevertheless, Nepal managed to protect its sovereignty while Portuguese colonies in Goa, and India’s princely states of Hyderabad, and Junagarh were integrated into the India Union. Despite Sardar Vallabhbhai Patel’s adventurism, the “pre-existing friendship” between Indian politicians and Nepali revolutionary leaders, as well as “Nehru’s liberal tilt” prevented Nepal from being annexed into independent India (Dixit, 2020). But, victory of the communists in China and Beijing’s claims of influence on the Himalayan region obliged India to develop a scrupulous approach towards Nepal, which was discernible in the Treaty of Peace and Friendship signed between Nepal and India in July 1950 (Levi, 1957). Comparing the 1950 treaty with the Treaty of 1923 signed between Nepal and British, it can be discovered how the 1950 treaty carried the colonial heritage to the changed political context (Muni, 1992) where India’s strategic and security considerations were palpable. Even its democratic ruminations in Nepal weren’t free from New Delhi’s strategic concerns, as India believed that Nepal’s democratic struggle against Rana regime could be exploited by the external powers, especially the US to establish its strategic toehold in Nepal (Khadka, 2000). Because the US was already desiring to fill up the political vacuum in Nepal, triggered

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by the British withdrawal in the region and China’s increasing influence in Himalayas. It was detectable in the visit of Joesph C. Satterwhite, the personal envoy of the US President Truman, to Nepal in April 1947. Against the backdrop, Nehru even went on saying that “a lot of money is thrown about by the US in Nepal to bribe the Nepalis” (Kumar & Prasad, 2000). Nehru had also opposed the attempts made by the western world to recognize an infant king in Nepal by backing the Ranas. Because, he didn’t want to see Nepal torn into Cold War bloc politics, which was also not advantageous to New Delhi. But, Rana premiership was endured at the cost of democracy in Nepal. The leader of the Nepali Congress B.P. Koirala, who was a home minister in the coalition of Ranas and the Nepali Congress, later revealed in his autobiography how he had to fight against the three forces at once, “the royal palace, Ranas and India.” Koirala has also disclosed that Indian ambassador to Nepal used to behave as if he was powerful than the King of Nepal (Koirala, 2001). While India was steering its security-driven foreign policy towards Nepal, particularly by sending Indian military mission to Nepal in 1952, with an objective to train Nepali forces and to monitor Chinese activities along Nepal’s border with Tibet (Gaige, 1971; Mullik, 1971), it was synchronously producing anti-Indian sentiments in Nepal (Levi, 1957). But, Nepal was yet to find a tactical way to neutralize Indian influence in Nepal. Thus, the source of Nepal’s claim to neutrality should be understood in the context of balancing Indian influence in Nepal. King Tribhuvan’s son Mahendra Bikram Shah better understood the importance of balancing for Nepal after his father’s death in 1955 (Rose and Scholz, 1980). The first policy Nepal ever introduced to neutralize India’s influence in Nepal was the policy of “equal relations with all the countries” instead of favoring India in all the issues (Atique, 1983; Brown, 1971; Rose & Dial, 1969). Since then, attempts to neutrality have always found wide-ranging presence, but a less care in Nepal’s foreign policy priorities, especially when Kathmandu needs to minimize Indian influence, and more recently as a coping strategy in the context of the rise of China (Adhikari, 2012; Rana, 2013). Actually, there are diverse understandings on Nepal’s claim to neutrality. To those, who distaste Nepal’s attempt to neutrality and demand Nepal’s wider engagement at the time of graver crisis in the regional and international affairs, perceive it as an instrument to reap geopolitical opportunities from the Sino-Indian rivalry by exploiting the act of balancing. But for those specializing on survival strategies of small countries, Nepal’s neutrality is

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a submission to Gulliverian neighborhood as the result of its failure to determine or influence the regional affairs. While neutrality for Nepal is not just about abstaining from any conflict or war, decision-makers in Nepal have exercised it in both the ways: as a strategic maneuvering and in a contextual manner (Bhattarai, 2018). Nepal’s claim to neutrality by King Mahendra as a response to Sino-Indian border war in 1962 was more tactical and strategic than the neutral posture Nepal maintained in 2017 standoff between China and India over Doklam, a disputed trijunction that they share with the Himalayan kingdom Bhutan. Mahendra’s strategic neutrality should be understood in his policy of diversification that he undertook to neutralize Indian influence in Nepal (Atique, 1983; Brown, 1971; Rose & Dial, 1969). Until 1962 Sino-Indian war, Nepal’s interaction with China was limited to high-level visits. But Kathmandu was prepared to start the first road connectivity with China after the war (Garver, 1991). Coming to the year 2017, Nepal’s interaction with China had widely increased through exchange and training programs, trade, and investments. Kathmandu could easily comprehend China’s increasing presence in South Asian region through connectivity projects (Bindra, 2017; Shabbir, 2017). India was unremittingly shielding status quo in the region, which however had a risk of destabilizing the existing regional peace and stability. Thus, Kathmandu’s 2017 neutrality was a coping strategy in the context of the rise of China, while 1962 neutrality was aimed at neutralizing Indian influence in Nepal, although policymakers in New Delhi demanded Nepal to support its war against China citing the provisions on collective security in 1950 treaty (Thapliyal, 2012). To Nepal, however, the provision of collective security in 1950 treaty expired as soon as India went to war with China and Pakistan without consulting Nepal (Rose & Dial, 1969; Ramachandran, 2003). Misconstructions also run high among the Kathmandu-based foreign policy experts while relating neutrality with non-alignment. Although both reinforce Kathmandu’s balancing strategy, Non-Alignment Movement (NAM) is an organization of the developing countries, which was institutionalized in 1961 as a response to Cold War bipolarity, whereas neutrality has a long history in the world politics. Still, there exists a trend of making erroneous assumptions reckoning Kathmandu’s neutrality in 1962 as the upshot of Nepal’s membership in Non-Alignment Movement. Foreign policy makers in Nepal often misperceive non-alignment as neutrality.

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Neutrality: Policies and Postures Although neutrality is perceived as the survival strategy of small states (Amstrup, 1976; McSweeney, 1987), evidences can be drawn from the history, where even powerful countries had exercised neutrality in their foreign policy. Although the American President Woodrow Wilson saw neutrality as an impediment to world peace around the time of World War I, the US had stayed neutral for almost 150 years, starting from 1793 (Muller, 2019), when President George Washington introduced the Neutrality Proclamation declaring the abstention and impartiality of the US in the European conflict between Great Britain and France. The US continued its neutrality in the French Revolutionary wars and Napoleonic wars (Hyneman, 1930), although in a brief war of 1812 against the Britain, the US had to compromise its neutral stance (Bukovansky, 1997). Despite declaring its neutral position in World War I in 1914, the US could not sustain its neutral position from more than three years and had to intervene in the European conflict (Seymour, 1935). Also, in the years including 1935, 1936, 1937, and 1939, the US Congress had passed Neutrality Acts, but attack on Pearl Harbor necessitated the US to abandon its neutrality (Muller, 2019) in World War II. Since then, the US has led the major wars, Cold War and War on Terror. While initiating the global campaign on War on Terror, the then US President George W. Bush even went on saying that “Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists.” It not only forced countries to take sides but also indicates how small countries had to compromise their policy and posture of neutrality in dealing with the dynamics of change in the international system that is driven by great powers. Nepal faces the similar fate whenever conflicts (re)surface between India and China. Because Nepal’s foreign policy behavior is largely determined by the nature of interaction between the two Asian giants. The American experience of neutrality was largely driven by Hamiltonian worldview stressing that the “rights of neutrality will only be respected when they are defended with an adequate power.” Because, for the founding father of the US, Alexander Hamilton, a nation characterized by its weakness, losses even the privilege of being neutral. Thus, power is required to maintain and preserve the neutral policies and postures (Bukovansky, 1997). In today’s multipolar world, great powers and regional powers have already dismissed the policy of neutrality

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as “unrealistic or immoral” (Muller, 2019). But, it has survived in the foreign policy options of successful small states in Europe, including Sweden, Norway, Switzerland, Denmark, Austria, Ireland, the Netherlands, and Finland. Some pursued it after the collapse of the League of Nations. Others adopted it during the Cold War (McSweeney, 1987; Morgenthau, 1939; Koht, 1937). Being culturally advanced, economically competitive and as the welfare states, some of the European countries have found neutrality an appropriate policy instrument to express their national behavior even after the end of Cold War. Still, there is no convergence in the foreign policies exercised by the countries attempting to neutrality (Agius & Devine, 2011; Joenniemi, 1993). As a result, approaching neutrality as a contested concept has become a commonplace activity because of one’s inability in distinguishing neutrality from other concepts including “non-belligerency,” “neutralization,” “non-alignment,” “military non-alignment,” “military neutrality,” and “non-allied” (Agius & Devine, 2011). Nepal’s claim to neutrality is different from neutrality in European political and legal setting. Although the concept of neutrality itself has evolved in accordance with the changes in international and regional security environment, the major problem faced by Nepal’s claim to neutrality lies in its failure to distinguish itself from neutralization and non-alignment. Policymakers in Nepal have always perceived Nepal’s attempt to neutrality in twofold ways: firstly, neutrality as an instrument to neutralize the influence of India and China in Nepal; secondly, justifying Nepal’s claim to neutrality by participating in Non-Alignment Movement (NAM). In principle, the objectives of NAM and neutrality are similar as both aim to regulate and limit the use of force in international and regional environment and demands a peaceful resolution of conflicts (Albrecht, 1988). They differ mainly in the means used to attain these objectives. NAM suggests active participation of all the 120 member countries, whereas neutrality is driven largely by the cause of individual abstention (Agius & Devine, 2011). The legal dimension of neutrality codified in the Hague Conventions of 1907 differentiates itself from other foreign and security policies and directs a neutral state not to participate in wars/conflict directly or indirectly and support the warring parties with military forces, or by making its territory available to them as military bases. During the time of the Cold War, the legal dimension of neutrality was heavily emphasized to underline a kind of distinction between neutrality and non-alignment

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(Braillard & Djalili, 1998). But the legal dimension of neutrality alone doesn’t offer guidelines for determining a country’s foreign and security policy. Thus, it is necessary to explore the political dimension, which defines neutrality as an expression of a country’s sovereignty (Frei, 1968) to defend its interest in global politics. For instance, militarily weak country embraces neutrality to maintain its sovereignty in the international system, where small countries are often coerced (Krasner, 1995). Thus, politically, neutrality guarantees a state’s political independence. Neutral state may also contribute in maintaining an international or regional equilibrium like Austria acted as the “neutral separator” (neutraler Riegel ) in Europe during the Cold War, whereas Switzerland guarded the Alpine passes in monarchical Europe and even Sweden maintained the “Nordic balance” during the period of Cold War (Riklin, 1992). Such were the realistic functions of the neutral states. Idealistically, however, neutral countries are qualified for mediation and arbitration to limit the use of force in international system (Probst, 1989). But, both the roles—realistic and idealistic—depend on the international system in which small countries operate (Hollis & Smith, 1990). Nepal’s claim to neutrality is without the accomplishment of both the roles. Firstly, although Nepal’s “Zone of Peace” proposal, unveiled in the middle of 1970s, aimed to neutralize the influence of India and China in the Himalayan country, it simulated an act of balancing and has been already rejected by India (Scholz, 1977). Secondly, the premise that small countries can play a mediating role is not flawed. However, there are certain conditions that need to be met for such countries to play a role. Mediating countries should have a reputation of being involved in the activities of peace-building and conflict resolution (e.g., Norway). Nepal has not so far shown sufficient interest in the larger global peace and conflict resolution issues, thus have not built any domestic expertise in any mediation efforts. Also, in its modern history, Nepal’s involvement in conflict management was limited to Tibet. Not only because of the absence of major wars, but more because of the changes induced by regional integration and challenges faced by it in the context of Brexit and Russia’s invasion of Ukraine, neutrality has further evolved in the European region and beyond. After the end of Cold War, the global politics witnessed a sea change. The self-conception of the state also underwent through a profound transformation. Given the unprecedented changes in the global affairs, neutrality too was not free from the challenges (Aunesluoma and Rainio-Niemi, 2016; Joenniemi,

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1993). As it was argued that for the neutrality to survive in the post-Cold War period, armament, conflict, tensions, and probability of inter-state wars are crucial. But there were scholars who believed that decline in tensions during the post-Cold War period favors neutrality, as decreased pressure allowed the “neutral countries to switch from passive to active politics” (Joenniemi, 1993) attesting the relevancy of neutrality. Also, there were the arguments on how conventional neutrality be reconciled with a county’s membership in an international or regional organization committed to common foreign and security policy? In the context of European regionalism, the erstwhile positive image of a neutral state was turning into an obstacle. As a result, increasing doubts and suspicions about the policy of neutrality surfaced. With the devaluation of neutrality, it was perceived as “contested, irrelevant and empty concept” and was understood as “constraint rather than asset” (Joenniemi, 1993). While such conceptual debates over the future of neutrality were being faced by the policies and postures of neutral states in the post-Cold War Europe, Nepal’s claim to neutrality neither encouraged such debates nor attempted to validate its relevance. Still, Nepali policy makers take no less time to accommodate neutrality in their foreign policy priorities, agendas, objectives and behaviors. The integrated international economic market in the European region has generated an environment for the neutral countries to revise their past policies. The Swiss Doctrine, which was defined by “legalism, conservatism, isolationism and armed neutrality” (Joenniemi, 1993) was grappled in the post-Cold War setting, with the question of revision. Finland, Austria, Ireland, and Sweden were also occupied with the question of what their neutrality suggest in regard to the membership in European Union (EU), North Atlantic Treaty Organization’s (NATO) Partnership for Peace (PPP) and Common Security and Defense Policy (CSDP) (Beyer & Hofmann, 2011). Nepal’s claim to neutrality, however, didn’t have to face such environment because landlocked country’s entry into South Asian Association for Regional Cooperation (SAARC) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is not associated with collective foreign and security policy. Still, in the postCold War period, when the neural countries in Europe were deliberating about the forms of institutionalizing the renewed norms of neutrality, Nepal (not a neutral state as the European neutral states are) only

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remained a mute spectator, without initiating any debates on the challenges, limits, and relevancy of its claim to neutrality in the post-Cold War locale. Situated between two rival powers, Kathmandu’s attempt to neutrality, today, faces assorted challenges, particularly in its efforts to accommodate the divergent and conflicting interests of the major powers. Incapable of escaping the major power contestation between the US and China and the geopolitical rivalry between India and China, Nepal’s claim to neutrality has encountered a dilemma regarding whether the rise of China should be celebrated or feared (Acharya, 2020) as its rise has already triggered the formation of new alliances, strategic partnerships and defense cooperations in the Asia Pacific region. Despite the challenges faced by small states in maintaining the neutral policies and postures, neutrality has still become advantageous in reshaping the modern world by offering an alternative to the unpredictability of international affairs and conflict-bound situations in world politics. Following the end of French Revolution and Napoleonic wars, neutrality occupied an important place in various international conflicts. Despite the destructions and damages invited by the two world wars along the impacts of the Cold War, and not withstanding the series of rejections and criticisms neutrality has faced, it still occupies a conspicuous place in modern world politics, particularly in implementing laws ensuring free trade and freedom of sea by championing the spirit of internationalism and multilateralism (Muller, 2019). Neutral states have also contributed in the establishment of twentieth-century international organizations and multilateral organizations. More than the role of great and major powers, they have subscribed to strengthening the rule of international law, as the neutral states find it more appropriate and beneficial not only for the protection of their sovereignty, independence, and autonomy but also to advocate for the peaceful, stable, and rule-based world order (Muller, 2019). Although Nepal’s foreign policy encompasses the components of world peace, UN Charter, and adherence to international law, it hasn’t been able to send a clear message to the world that Kathmandu’s claim to neutrality is characterized by its adherence to the spirit of internationalism, humanitarianism, and world peace, signaling a divergence between the policies and practices. In its foreign policy objectives, Nepal claims to abide by international law and UN Charter; in practice, however, Nepal’s foreign policy behavior denotes an act of hiding (emanating not from non-participation in conflict which neutrality principally demands,

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rather from the small state syndrome) at the time of conflict between the belligerents.

Hiding or Binding? In the June of 2017, India and China had a military standoff over Doklam plateau, a disputed trijunction, which two nuclear powers share with the tiny Himalayan kingdom Bhutan. Squeezed between India and China, Bhutan is bound by the 1949 security pact with India. Nepal initially responded to the crisis by maintaining silence. But on August 7, 2017, Nepal’s Foreign Minister Krishna Bahadur Mahara confirmed Nepal’s neutrality stating that Nepal won’t be taking sides and wishes for the peaceful settlement of standoff. While maintaining neutrality, Kathmandu’s anxiety was mounting in regard to whether Kalapani, the disputed Himalayan territory between Nepal and India will face the fate of Doklam. Because, while the standoff was underway, the Deputy Director General of the Boundary and Ocean Affairs of China’s Ministry of Foreign Affairs, Wang Wenli had stated to an Indian media delegation in Beijing, “what New Delhi would do if China enters Kalapani region” (Giri, 2017). It drew the attention of Nepali foreign policy experts and security analysts as Kalapani could be a new Doklam. Back in 1952, power elites in Kathmandu had allowed New Delhi to station its security forces in Nepal’s northern frontiers, including Kalapani region to monitor Chinese activities (Feer, 1953). Although India withdrew its military missions from other posts later, it continued stationing its troops at Kalapani (Cowan, 2015). Since then, Kalapani region is brewed as a disputed territory. Decision-makers in Kathmandu were taken aback in 2015 when India and China agreed to use Lipulekh pass near Kalapani to expand their trade routes without Nepal’s consent (MEA, 2015). The only self-help available to Kathmandu was to write both of its neighbors. But Kathmandu never received a satisfactory answer. Instead, India included the disputed territory in its new map unveiled in 2019 and inaugurated a road via Lipulekh in 2020, which Kathmandu claims as its own territory. Experts in Kathmandu were divided whether Nepal should raise the issue of Kalapani when they were locking horns in Doklam in 2017. Although Nepal claimed its neutrality on Doklam crisis, Kathmandu was heavily traumatized by the possibility of facing the destiny as of Bhutan that further aggravated its small state syndrome. Consequently, Nepal’s neutrality appeared as of “hiding” because of its helplessness to

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raise its own issue. While assessing Nepal’s manifested neutrality from the perspectives of “hiding” and “binding,” we consider hiding as an act of concealment, where the third-party state doggedly decides not to indulge, by any means, in the ongoing conflict between the disputing parties (Bhattarai, 2018). Rather, in trepidation, it chooses to conceal or hide prophesying that it might not be beneficial. Nepal, which is perceived as a small state chose to hide—initially by maintaining silence and later by confirming its neutrality—as any tilt would have been disastrous (Bhattarai, 2018). On the other hand, “binding” is relatively impressive. If “hiding” denotes lilliputian dilemma, “binding” implies lilliputian confidence as it unveils state’s normative core. Here, the third-party state doesn’t have to ineludibly hide, rather takes refuge in the norms of world peace and spirit of international law. More precisely, the third-party state firmly abides by the belief in international peace and security and displays a commitment to resolving the conflict in a peaceful manner. But, instead of upholding the strategy of binding, Nepal’s foreign policy behavior took resort in the act of hiding. Because, Nepal’s initial silence didn’t effectively prove its adherence to the cause of world peace, spirit of the UN charter and values of international law. Rather, Nepal’s indecisiveness regarding whether it could raise its own issue of Himalayan borders or not, when a senior Chinese official was referring to the probability of China’s entry into the disputed territory between Nepal and India, exposed Nepal’s inability to unequivocally distinguish whether Kathmandu has been employing hiding or binding forms of neutrality. It was understandable that Nepal can never choose one over the other, which however doesn’t mean Kathmandu should continue with the act of hiding, characterized by irresolute postures and uncertain policies. While Nepal is not prioritizing one over the other or tilting towards the one side, why Kathmandu has been unsuccessful in informing the larger international community and multilateral forums that Nepal’s foreign policy is abided by the norms of international law and world peace (Constitution of Nepal, 2015). Because of which, Nepal’s unwavering belief in the rule-based international order and commitment to harmonious regional security environment are merely perceived as the “hiding” strategy or “survival” strategy of the small states. While outshining its act of ‘hiding,’ Nepal too shouldn’t reach the extreme as it did by decrying the decision of the Trump administration to recognize Jerusalem as Israel’s capital. While Nepal voted against the move of the US in the December 2017

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at the United Nations, it possibly did justice to Palestinian cause but at the same time generated an environment scathing US-Nepal ties. In such cases, the policy of “abstaining” serves better than a display of adventurism. Nepal’s act of “hiding” is the result of its inability to distinguish non-alignment with the revised norms of neutrality that the European small countries have embraced after the post-Cold War period. Because the neutral posture exhibited by the newly awakened Asian countries in the Bandung conference in 1955 doesn’t suit the contemporary realities. Neutrality became the foundation of the foreign policy of the most of the Asian countries during the Cold War period. But, neutrality shouldn’t be confused only with the fleeting posture designated to avoid the Cold War bloc politics, which was imposed by the military pacts during the Cold War period. In the Bandung conference, the United Nations, and in several other international, regional, and multilateral forums, a concrete neutral posture was manifested by the newly awakened Asian countries including Nepal, India, Indonesia, Ceylon, Burma, and the United Arab Republic, while Thailand, Pakistan, the Philippines, Iran, and Turkey had military alliances with the Western countries (Khanal, 2000). Today, most of them have either abandoned or compromised their non-alignment policies and the neutral stance because of the unprecedented transformation brought by the striking changes at the political and economic fronts globally. At the Bandung, their claim to neutrality was leveled to shield their sovereignty and political independence. Today, they have other effective means to express their sovereignty, which itself is being redefined in today’s globalized world. Therefore, prior making any claim to neutrality, it is very important to weigh one’s posture and policies so that a small country like Nepal could send an unambiguous and straightforward message to the world in regard to its neutrality. Situated between two Asian giants, Nepal has missed numerous opportunities to infuse dynamic neutralism in its foreign policy behavior. As the prime cause behind its act of “hiding,” Nepal’s claim to neutrality is only limited to dismissing the Cold War world view and demanding a peaceful international system, without bloc politics. Nepal may take resort in neutrality while formulating its foreign policies, at least when the world is divided into opposing camps, and while regional politics fall prey to bloc politics, but an effective implementation of dynamic neutralism is missing in Nepal’s foreign policy enactments. It’s because of two reasons: firstly, confusing non-alignment with neutrality; secondly, trammeling its

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claim to neutrality as a survival strategy instead of employing it to express its national identity as European neutral states have done. Let’s take an example of 1962 Sino-Indian border war, when Nepali Gurkha mercenaries recruited in Indian army were fighting against China (Cowan, 2018; Bhattarai, 2018), how did Kathmandu justify its claim to neutrality? Such situations cannot be understood by categorizing under the principle of “binding” or “hiding.” Still, in such an adverse condition, what are the policy choices that Kathmandu could initiate to better inform the international community arguing Nepal’s claim to neutrality is not just a small state syndrome. After the 1962 war, China was accused of using subversion, pressure, punishment, and persuasion on the Gurkha Prisoners of War (PoW) so that the brainwashed POWs with their subversive intent would eventually lead to the termination of Gorkha recruitment (Cowan, 2018). Although New Delhi was providing covert support to the armed opposition against King Mahendra’s direct rule in Nepal following latter’s coup in 1961, such support weakened significantly after 1962 war, as Mahendra was getting closer with China against India (Cowan, 2018). Debates on the need of reassessing the recruitment of Nepali nationals in Indian army often surface in Kathmandu whenever India and China face the border scuffles and standoffs with frontline Gurkha soldiers. Doubts are often raised over Nepal’s attempt to neutrality in the context of Nepali nationals serving as the mercenaries in the army of one neighboring country, which has fought a war against the other immediate neighbor. Communist and nationalist parties in Nepal exploit this agenda for the vote banks and political benefits, particularly when they are out of power. Before launching their armed insurgency in 1996, Maoist rebels had also listed this agenda in their 40-points demands submitted to the government. But, as soon as they joined the mainstream politics after the political change of 2006, the mention of Gurkha recruitment was nowhere seen in their political proposals and documents. Regarding the history of recruitment of Nepali citizens into Indian army, it should be understood that British India started recruiting Nepali nationals in their colonial armies from 1816, when British India realized that although Nepal lost the Anglo-Nepal War (1814–1816) Nepali soldiers had fought with remarkable gallantry and valor, encouraging them to be recruited in British army. But, with the end of British colonialism in India, six Gurkha regiments were handed over to independent India while four regiments went to Britain as part of the tripartite agreement between Britain, India, and Nepal in 1947. Today, there are seven

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Gurkha regiments in Indian army, which have stood as strong pillars for India’s national security (Aneja, 2020). Although the exact number of Nepali nationals serving in Indian army is yet to be ascertained (Sharma & Thapa, 2013), roughly there are about 32,000 Gurkhas today that make up the 40 battalions (Aneja, 2020) (Fig. 1.1). Until now, Kathmandu hasn’t officially raised the issue of reviewing the recruitment of Nepali nationals into Indian army with New Delhi. However, Nepal officially proposed a review of the tripartite agreement between Britain, India and Nepal, to the UK. In the February of 2020, Nepal sent letter to Britain seeking the review of the tripartite agreement of 1947 (Giri, 2020, February 17). The former Prime Minister of Nepal K.P Oli had also raised the issue with the then British Prime Minister Theresa May in 2019. Although Nepal and India constituted an Eminent

Fig. 1.1 In this February 2018 Photo, Gurkha pensioners and their dependents are thronging and awaiting their turn to receive pays and pensions from the Indian government at Butwal Pension Camp, Phulbari (From Author’s Archive)

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Persons’ Group (EPG) in 2016 to examine the entire gamut of the NepalIndia relations, and to suggest the necessary recommendations, Gurkha recruitment was not the part of its jurisdiction. While Nepali youths, chiefly from the indigenous hill communities of Western Nepal, are constantly lured by the salaries and other social security benefits offered by the Indian army, approximately 122,000 Indian Gurkha pensioners residing in Nepal are receiving pensions. Nepal is socio-economically and politically not in a position to halt the recruitment into Indian army. But, fighting India’s wars against China and Pakistan, with which Nepal has harmonious and friendly relations, has jeopardized Nepal’s claim to neutrality and has limited it to survival strategy. They fought India’s major wars with Pakistan in 1947, 1965, and 1971. They fought against China in 1962 and have withstood skirmishes and standoffs between China and India. Although Beijing has, so far, not expressed any formal objections to the use of Nepali nationals against China, the Chinese troops had used loudspeakers in 1962 wars against a company led by Gurkha, asking the Nepali nationals recruited in Indian army, to withdraw (Thapa, 2018).

Evolution of Nepal’s Neutrality Geographically located between the two giant land masses of Asian civilization, India and China, Nepal’s own freedom and security depends on the interaction between her two big neighbors. Nepal’s claim to neutrality is an upshot of the similar realization regarding how meticulously Nepal must tread the diplomatic tightrope, when relations between the two Asian giants, whose friendship and cooperation Kathmandu cherishes in all occasions, display signs of strain (Shaha, 1965). In such a context, scholars often equate Nepal’s claim to neutrality with the metaphor of “yam” introduced by the founder of modern Nepal, Prithivi Narayan Shah, in his Dibhya Upadesh, a divine council on statecraft. For Shah, “Nepali state is a yam between two boulders and it needs to establish friendly relations with the Emperor of China, while great friendship should be maintained with the British India” (Shaha, 1978; Nath & Acharya 1953). Yam, here, although demands an act of balancing from Nepal, the metaphor can be also understood as a militant neutrality (Baral, 1981). But, his divine council couldn’t direct Nepal’s expansionist and adventurist rulers, who were heavily defeated by the British East India Company in the Anglo-Gurkha war of 1814–1816 culminating

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into Sugauli Treaty, under whose terms Nepal lost the territories it had conquered earlier. Even before the Sugauli Treaty was signed, agreement on recruiting Nepali Gurkha soldiers in the British Army was made. The first Gurkha Corps named as Nasiri Battalion was formed on April 24, 1815, by the East Indian Company (James & Sheil-Small, 1965). Defeat in war paved the way for pro-British foreign policy, relinquishing Prithivi Narayan Shah’s guidance on nourishing the policy of keeping balanced relations with both the immediate neighbors. Jung Bahadur Rana’s rise to power as a de facto ruler in 1846 following the Kot Massacre took him closer to British Residency. The British Resident in Kathmandu, Brian Houghton Hodgson, who resided in Nepal from 1820 to 1843 had endorsed Jung Bahadur’s rise. Jung Bahadur became the first Nepali Prime Minister to visit England in 1850 and offered military assistance to British East India Company during Sepoy Mutiny of 1857. Starting from Jung Bahadur, all the Rana rulers were acquainted with the strategic significance of appeasing Britain. For rendering the military assistance to British in Sepoy Mutiny, Jung Bahadur was awarded with the territory of Western plains including Banke, Kailali, Bardia, and Kanchanpur. Publicly known as “Naya Muluk,” they were the part of Gorkha conquest, which Nepal had lost in Anglo-Nepal War. While both Ranas and British benefitted from the strategic arrangements that Jung Bahadur had set, Nepal managed to capitalize on such modus vivendi by culminating a formal treaty with Great Britain on December 21, 1923, that recognized Nepal as an independent and sovereign country. With the acknowledgment of Nepal’s sovereignty by the Great Power like Britain, Nepal managed to escape the fate of 536 princely states that were annexed by independent India in the line of “national security exercise” by Sardar Vallabhbhai Patel, who was a Deputy Prime Minister in Nehru’s cabinet (Dixit, 1998). Throughout the period of British colonialism in South Asia, Nepal never made any claim to neutrality. In the words of colonizers, Nepal was a “buffer state” and was perceptively pursuing the policy of appeasement towards British and aggression towards Tibet. The buffer state developed as a distinct political terminology in 1883 (Ross, 1986) and British were first to use the concept in Afghanistan in separating Russian and British sphere of influence during the Great Game (Fazal, 2004). Britain employed the concept of buffer in Nepal and Tibet as well. Two conditions are fundamentally inescapable to be a buffer state. Firstly, buffer

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state is geographically located between the two contending powers or rival countries. Secondly, buffer state is comparatively smaller in its size and influence than the contending powers. However, the traditional function of buffer state lies in maintaining peace between the rival forces (Chay & Ross, 1986). Today, while such colonial construct still persists in perceiving Nepal as a buffer state between India and China, Kathmandubased policymakers should have been able to reassess whether China and India are indeed the archrivals. Because, their rivalry has been more infrequent and sporadic. Even their territorial disputes have been limited to standoffs, border clashes, and skirmishes. Even though they fought a war in 1962, it was limited to Himalayan borders. Today, while SinoIndian bilateral ties are driven not only by territorial conflict but also by competition in the multilateral forums and cooperation in the economic areas, what are the makers of Nepal’s attempt to neutrality? Because, Nepal’s embryonic claim to neutrality goes back to 1962 Sino-Indian war. Today, Chinese academicians and policymakers have begun to identify Nepal’s geographical location as a strategic gateway for China to enter South Asia as Beijing has not been able to materialize diplomatic relations with Thimphu and China finds its access to South Asia easier through Nepali territory (Tao, 2017; Bhattarai, 2018). Despite India’s sharp opposition and unwillingness to join China’s flagship BRI project, the connectivity and infrastructure development plans have attracted India’s South Asian neighbors (Shabbir, 2017). Resisting India’s cautions, it was a “pro” Indian government in Nepal that signed Belt and Road Initiative (BRI) agreement with China in 2017 (K.C. and Bhattarai, 2018). New Delhi understood it as a menace to its “special relations” with Nepal, and as such, Nepal’s claim to neutrality continues to face denunciation. Thus, in this changed context, what are the new markers of Kathmandu’s claim to neutrality, when Nepali leaders, including former prime ministers belonging to the leftist camps and the ousted king Gyanendra Shah have labeled Nepal’s location as a bridge between India and China? Foreign policy formulators and implementers in Nepal must explore answer to this question prior lionizing Nepal’s neutrality as an “indispensable element of Nepal’s foreign policy priorities” (Bhattarai, 2018). Because, Nepal’s attempt to neutrality has already faced numerous criticisms for restricting itself to an act of “hiding” or a survival strategy intended to cope with the sub-systemic anarchy against the backdrop of Sino-Indian rivalry. As a result, Nepal’s claim to neutrality hasn’t been able to send an impressive message to the international community.

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Nepal’s neutrality was sternly denounced by New Delhi in the June of 2020, when the border skirmishes between the two nuclear powers almost forced South Asian countries to take a side (Zheng, 2020). Although Nepal expressed a stern belief in nonalignment and neutrality (Ghimire, 2020), India outrightly questioned it referring to China’s increasing presence in Nepal (Gupta, 2020). But, Kathmandu perceived India’s suspicion over Nepal’s neutrality as the after effect of new map row between them (The Times of India, 2020). In 2019, Nepal expressed its reservation over India’s new map for having incorporated Nepali territories unilaterally. Kathmandu also dispatched diplomatic note to New Delhi, seeking a diplomatic resolution. But, as New Delhi paid no heed to it and constructed a road to Mansarovar in Tibetan Autonomous Region (TAR) via Lipulekh, which Nepal claims to be its territory, Kathmandu also unveiled a new map incorporating the disputed territories with India. While New Delhi paid no attention to Nepal’s repeated calls in resolving the border problems (Republica, 2020), it laid an opportunity for the then ruling communist party in Nepal to draw geopolitical benefits (Giri, 2020, June 20) out of the Sino-Indian dispute. But, such geopolitical benefits are usually aimed at moderating Indian influence in Nepal, by crawling towards China (Bhattarai, 2021). Even Nepal’s recent efforts for trade diversification and railway projects with China are perceived by New Delhi as the upshot of Nepal’s increasing discomfort with India, which is not a new experience, however. While India-China border war was underway in 1962, there were reports in the different corners of South Asia inquiring whether the war was to Nepal’s benefits (Khanal, 2000). Even though Nepal was not directly involved in the war, Kathmandu’s claim to neutrality drew a severe criticism in the Indian media, and Sino-Nepal relations were depicted as anti-Indian and pro-Chinese (Khanal, 2000). Kathmandu faced the same fate when India lost its 20 soldiers during a violent skirmish in Galwan valley in 2020 with China. Despite not being able to defend its neutrality, Kathmandu still reckons neutrality, non-alignment, and equidistance as germane, relevant, and applicable owing to its geostrategic location. In fact, they are the survival strategies of the small states in coping with the gigantic neighborhood (Koht, 1937; McSweeney, 1987; Beyer & Hofmann, 2011). However, they have been undergoing through an alarming trials and tribulations actuated by the geopolitical impacts of the Sino-Indian conflicts (Rana, 2013). After all, employing Nepal’s claim to neutrality as the geopolitical ambition in reaping benefits out of the

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Sino-Indian conflict would only tarnish Nepal’s image as the lack of clearcut neighborhood policies from Nepal has already sent the message of distrust and misperceptions in the foreign policy institutions of its immediate neighbors. On June 19, 2020, when the Nepal Communist Party had a virtual meeting with the Communist Party of China, it was severely denounced by Indian foreign policy experts, former Indian ambassadors to Nepal, and Indian media, as being hostile to New Delhi. Because, the virtual meet was organized at the time when the bilateral relations between India and China had worsened against the backdrop of the border skirmishes along the disputed borders in the Himalayan region. While the virtual meeting between the ruling communist party leaders of Nepal and the Chinese Communist Party members coincided with the violent territorial dispute between India and China, it was obvious for New Delhi to cast suspicion over Nepal’s claim to neutrality. India’s foreign policy experts, security analysts, and media were caught validating and endorsing the remarks made by the Indian army chief that “Nepal is acting on the behest of someone” (The Wire, 2020), which was an indirect reference to China. Although the virtual meeting was planned long before the skirmishes erupted between the Indian border troops and Chinese PLA, the timing was not appropriate. It could have been averted. Because of the failure in doing so, geopolitical ambition of the then ruling communist party drew widespread criticism (Giri, 2020, June 20). Rebukes weren’t limited to New Delhi, however. Even Kathmandu-based foreign policy experts and security analysts publicly expressed strong disapproval of Nepal’s perceptible geopolitical ambition over Sino-Indian disputes, reckoning such acts as disastrous for the landlocked country’s aspiration in drawing economic benefits from the spectacular rise of India and China. India’s spectacular economic performance and China’s unrivalled development has always given a hope of spillover effects to Nepal, whose search for economic prosperity is dependent on its transit diplomacy (K.C. and Bhattarai, 2018). But, quite often, the geopolitical rivalry between India and China emboldens the geopolitical ambitions among the power elites of the small countries in South Asian region, whereby they switch to prioritize the interest of one neighbor against the other so that their government or regime could receive the backup incessantly (Rose, 1971), degenerating all the claims to neutrality with an act of bandwagoning. Branded as “electrifying” bilateral relations of the century (Martin, 2015), Sino-Indian ties have variously evolved. But, their neighborhood

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policies haven’t much evolved. Although their neighborhood policies are characterized by certain level of differences, foreign policy securitization through aids and investment is what both share towards Nepal, whose presence in international affairs, however, is determined by three different approaches, including isolationist policy, Indo-centric approach, and globalist posture (Khatri, 1998). Until the end of 1950, Nepal pursued an isolationist foreign policy confining its interactions and engagements only with Britain. Although Nepal joined the comity of nations and acquired the membership of various international and regional organizations since 1955 in a bid to pursue the path of globalism, the revenge of geography impelled Nepal to pursue an Indo-centric approach (Ramachandran, 2003). But, following India’s unofficial blockade on Nepal in 2015, the Nepal has acutely started to diversify its trade and transit routes via China (Mishra, 2020). Nepal has been variously balancing its two immediate neighbors (Kissinger, 2014) employing different tactics, including the policy of appeasement during the period of colonialism; accepting the domination of neighborhood by signing treaties (like 1950 Treaty with India in the wake of threat emanating from the Chinese takeover of Tibet); and rejecting the dominance imposed by the gigantic neighborhood with the policy of hedging. After the two ancient civilizations, India and China, accepted the Westphalian model, they have been reduced to the status of geopolitical archrivals as communist China and democratic India. Although their rivalry is exploited by the power elites in the small countries, general public perceives Sino-Indian rivalry as a menace to the possibility of materializing Asian century through quid-pro-quo conditions among the rich and poor, and powerful and powerless countries in Asia. Their geopolitical contenstation in the Himalayan belt and South Asian region has been a major source of insecurity for Nepal (Burke, 1963; Rana, 2013; Garver, 1991). While China’s rise has already mounted challenges for Nepal, New Delhi, too, misses opportunities in taking Kathmandu into confidence. Eminent Persons’ Group (EPG) was an appropriate opportunity for India to achieve that (Oli, 2016). Officially constituted in 2016 with expert members from both the countries, EPG was mandated to review the entire gamut of bilateral relations and to come up with the key recommendations on the contentious issues. A report was finalized, including the joint recommendations from the experts of both the countries, during the 9th meeting of EPG in Kathmandu in 2018. But, Indian Prime Minister has not received the report

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yet, which has engendered a suspicion that Modi administration has harbored certain reservations against the contents of the report. After over three years, questions are being raised over the relevancy of the report (Giri, 2021) although the members of EPG have been urging the prime ministers of both the countries to accept the report. Nepal’s attempt to neutrality in dealing with its immediate neighbors is viewed by the foreign policy analysts as Nepal’s survival strategy, which has its root in the nineteenth-century colonial narrative (Bhattarai, 2021). After Nepal lost the war to British East Indian company in 1815, the colonial narrative of “buffer” was assigned to describe its geostrategic location. Although buffer state rejects the policies and posture of neutrality, Nepal—which was well-equipped in the art of territorial expansion until the 1815 Anglo-Nepal war—adopted the survival strategies of appeasement and started balancing the power of Chinese Emperor against the British colonizers in South Asia. Kathmandu watered those strategies further during the Cold War period, particularly after the Chinese takeover of Tibet. Thus, its geostrategic location has always shaped Nepal’s worldview, including its claim to neutrality, because Nepal’s security and stability are dependent on the interactions of its two neighbors (Bhattarai, 2005). But, maintaining equidistance relations with its two neighbors is a herculean task for Nepal (Schmidt & Thapa, 2013). While spectacular economic performance of India and China has offered a hope of economic development to Nepal (K.C. & Bhattarai, 2018), Sino-Indian conflict has also galvanized the spirit of geopolitical ambition in the leaderships of small states (Bhattarai, 2021), as result of which they don’t shy away to prioritize the interest of one neighbor against that of the other, principally to shield the interest of their political regime or to prolong their stay in the government (Sharan, 2017; Nayak, 2014). But Nepal’s fear of getting trapped into great power competition cannot be denied. For instance, when Tibetan Khampa fighters were using Nepali territory in the Himalayan region as a base to receive support from the US and to attack the Chinese PLA in the early 1970s, Beijing was intensely provoked (Adhikari, 2012). Today, once again, the decision made by Nepali political actors to receive fund under US-sponsored Millennium Challenge Corporation (MCC) has vexed rising China (Kumar, 2021). Nepal’s security threat has also burgeoned by the Sino-Indian territorial conflict in the same manner as it has ignited the flamboyant geopolitical hankering deeply rooted in the collective psychology of the power

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elites in Kathmandu. After the death of 20 Indian soldiers in the skirmishes on Sino-Indian borderlands in 2020 (BBC, 2020; Gettleman et al. 2020), Kathmandu issued a press statement calling both the countries to show restrain and resolve the crisis through peaceful means (MoFA, 2020) manifesting Nepal’s security threats, which is detrimental to the survival strategies purused by the Himalayan country. But, few leaders of the unified communist party of Nepal exploited the Sino-Indian skirmishes to fulfill their geopolitical ambition and held talks with the leaders of Chinese Communist Party (CCP) when Indian and Chinese troops were violently clashing in the Himalayas. It severely exposed the limit of Nepal’s claim to neutrality. During such a crisis triggered by the territorial conflict between India and China, the deployment of Nepali Gurkha soldiers serving in Indian army in the frontline against the Chinese aggression has once again raised question on Nepal’s neutrality (Nepali Times, 2020). Because, while New Delhi cites increasing Chinese presence in Nepal to denigrate Nepal’s neutrality, Beijing may find Gurkha regiment as against Nepal’s denial to take sides. The bilateral relation between China and India has different dimensions. China and India are geopolitical rivals in the context of China’s increasing presence in South Asia. But they are two emerging economies as well. Similarly, both are the two distinct civilizational entities. The failure of the leadership from both the countries to stabilize their bilateral relations, today, has foregrounded the dimension of conflict and competition over the possibility of cooperation between the two Asian giants. Thus, exploiting Sino-Indian territorial dispute to bolster its geopolitical ambition may instigate a backlash to the “raison d’etre” of Katmandu’s survival strategy (Dahal, 1998). Because, in near future, if China and India get closer, “will Nepal be (un)comfortable for losing its strategic space”? (Muni, 2016). In such situation, how will Nepal justify its claim to neutrality? To discover answer to this question, its best to begin by understanding how New Delhi perceives Nepal-China relations and how Beijing interprets Nepal-India ties, while Kathmandu’s strategy, at present, is to await the two ancient civilizations renegotiate their outlooks and understandings about each other.

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Martin, P. (2015). Beyond 1962, How to upgrade the Sino-Indian relationship. Foreign Affairs. McSweeney, B. (1987). The politics of neutrality: Focus on security for smaller nations. Bulletin of Peace Proposals, 18(1), 33–46. http://www.jstor.org/sta ble/44481298 MEA. (2015). Joint statement between the India and China during Prime Minister’s visit to China. https://www.mea.gov.in/bilateral-documents.htm? dtl/25240/Joint_Statement_between_the_India_and_China_during_Prime_ Ministers_visit_toChina Mishra, M. K. (2020). India in the Himalayan landscape: Security concerns and approaches. World Affairs: The Journal of International Issues, 24(3), 20–41. https://www.jstor.org/stable/48590641 MoFA. (2020). Press statement on recent development in Galwan valley area between India and China. Ministry of Foreign Affairs, Government of Nepal. Morgenthau, H. J. (1939). International Affairs: The resurrection of neutrality in Europe. The American Political Science Review, 33(3), 473–486. https:// doi.org/10.2307/1948801 Muller, L. (2019). Neutrality in World History. Routledge. Mullik, B. N. (1971). My Years with Nehru: The Chinese Betrayal. Allied Publishers. Muni, S. D. (1992). India and Nepal: A Changing Relationship. Konark Publishers. Muni, S. D. (2009). India’s foreign policy: The Democracy Dimension. Cambridge University Press. Muni, S. D. (2016). Trilateral engagement between India, China and Nepal. In Jaiswal and Geeta Kochhar (Eds.), India-China-Nepal: Decoding Trilateralism, GB Books. Nath, Y. N., & Acharya, B. R. (Eds.), (1953). Badamaharajdhiraj Shree Prithivi Narayan Shah Ko Divya Upadesh (Divine Council of Great King Prithivi Narayan Shah). Prithivi Jayanti Samaroha Samiti (Prithivi Birthday Celebration Committee), Second edition, Bageshwar Press. Nayak, N. (2014). Strategic Himalayas. Institute for Defence Studies and Analysis. (p. 18). Nepali Times. (2020). Gorkhas on the frontline between India and China. Oli, K. P. S. (2016). 21st Sapru house lecture. India Quarterly, 72(3), 209–215. https://www.jstor.org/stable/48505502 Probst, R. (1989). Good offices in the light of Swiss International practice and experience. Kluwer Dordrecht. Ramachandran, S. (2003). Nepal as seen from India. India international centre quarterly, 30(2), 81–98. http://www.jstor.org/stable/23006108

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Rana, M. S. (2013). China meets India in Nepal: A historical and future perspective. Indian Journal of Asian Affairs, 26(1/2), 59–73. http://www.jstor. org/stable/43550356 Regmi, M. C. (1999). Imperial Gurkha. Adroit Publishers. Republica. (2020). India continuously ignoring Nepal’s call for holding talks to resolve border issues: FM Gyawali. Republica. Riklin, A. (1992). Die neutralitat der Schweiz Alois Riklin Hans Haug Raymond Probst (Eds.), Neues Handbuch der schweizerischen Aussenpolitik Haupt Bern 191–209. Rose, L. E. (1971). Nepal Strategy for Survival. University of California. Rose, L. E., & Dial, R. (1969). Can a ministate find true happiness in a world dominated by protagonist powers? : The Nepal case. The Annals of the American Academy of Political and Social Science, 386, 89–101. http://www.jstor. org/stable/1037617 Rose, L. E., & Scholz, J. T. (1980). International relations: A root between two stones profile of the Himalayan Kingdom. Westview Press. Ross, T.E. (1986). Buffer states: A geographer’s perspective In J. Chay and T. E. Ross (Eds.), Buffer States in World Politics, Westview Press, (p. 16). Scholz, J. T. (1977). Nepal in 1976: Problems with India threaten birendra’s new order. Asian Survey, 17 (2), 201–207. https://doi.org/10.2307/2643477 Seymour, C. (1935). American neutrality: The experience of 1914–1917. Foreign Affairs, 14(1), 26–36. https://doi.org/10.2307/20030699 Shah, R. (1978). Nepali Politics: Retrospect and prospect. Oxford University Press, (p. 104). Shaha, R. (1965). Heroes and Builders of Nepal. Oxford University Press, (p. 86). Sharan, S. (2017). How India sees the world. Juggernaut books, (p. 166). Sharma, S., & Thapa, D. (2013). Taken for Granted: Nepali Migration to India. Centre for the study of Labour and Mobility. (pp. 8–9). Talat Shabbir, (2017). Rising China and its South Asian neighbors: Evolving dynamics and the outlook. Policy Perspectives, 14(2), 137–152. https://doi. org/10.13169/polipers.14.2.0137 Tao, Li. (2017). From Yam to Bridge. The Kathmandu Post. https://kathmandu post.com/opinion/2017/02/03/from-yam-to-bridge Tenzin, A. K. T. L., & Dhondup, K. (1982). Early relations between Tibet and Nepal (7th to 8th Centuries). The Tibet Journal, 7 (1/2), 83–86. http:// www.jstor.org/stable/43300047 Thapa, C. S. (2018 February-March). Impact of cut in Gurkha recruitment into Indian army by Nepal. Salute, Vol. 10, Issue 6. Thapliyal, S. (2012). India and Nepal treaty of 1950: The continuing discourse. India quarterly, 68(2), 119–133. http://www.jstor.org/stable/ 45072541

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The Wire. (2020). Army chief says Nepal objected to India’s link road to Lipulekh at someone Else’s Behest. Tiwary, V. K., & Tiwary, V. K. (2009). The recruitment of the Gurkhas in the British army, their role in British Empire. Proceedings of the Indian History Congress, 70, 802–813. http://www.jstor.org/stable/44147727 The Times of India. (2020). Border row with India: Nepal’s Parliament approves new map. Upadhya, S. (2012). Nepal and the Geo-Strategic rivalry between China and India. Routledge. Zheng, S. (2020). China-India border dispute may force South Asian neighbours to pick a side. South China Morning Post.

CHAPTER 2

India’s Perception of Nepal-China Relations

We cannot allow the Himalayan “barriers” to be pierced because it is also the “principal barrier” to India’s security, stated Indian Prime Minister Jawaharlal Nehru eloquently in the Indian parliament in 1950. Nehru was hinting at the geopolitical whirlpools across the Himalayan borders, particularly referring to annexation of Tibet by China. In today’s context too, India’s perception of Nepal-China relations is largely shaped by the Himalayan frontier. As such, this chapter sheds light on how India has been perceiving Nepal-China relations, sans confining the account of past events to the period from 1955, when Kathmandu established diplomatic relations with Beijing. Different approaches in India’s foreign policy towards Nepal, including the Himalayan Frontier Theory, Gujral Doctrine, and Neighbourhood First Policy are examined. Throughout the chapter, several factors influencing Nepal’s attempt to neutrality are featured, mainly, securitization of India’s foreign policy. Presenting various instances of India’s denunciation of Nepal’s claim to neutrality from the modern and contemporary histories and also divulging the probabilities of Nepal’s strategy of neutrality being compromised while Kathmandu intends to shore up its national power capabilities, this and the subsequent chapter offers readers how such perceptions become so central to the assessment of Nepal’s neutrality and its relevance for Nepal in the present context.

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Nepal’s Quinquennial Missions Until the emergence of modern and independent India in 1947, the bilateral relations between Nepal and China remained largely unscathed, except Nepal-China War (1788–1792), when Chinese soldiers had reached the Trisuli valley of Nepal towards Nuwakot, by crossing Kerung, which, today is an international borders between Nepal and China. The war had taken place over the question of trans-Himalayan trade, issue of currency and matter of inter-conflict in Tibet (Vaidya, 1999). But, with the signing of Betravati treaty on October 2, 1792 both the countries looked for the ways to restore amity, cordiality, and friendliness in their relations by sending diplomatic missions. But, such endeavors in the light of power asymmetry existing in Sino-Nepal bilateral relations were deemed by the colonial thinkers as of a “tributory” and “suzerain” although Nepal has, hitherto, never accepted any foreign influence and dominance of a suzerain power (Vaidya, 1999). The first Nepali mission to China in 1792 was intended to reestablish a “friendly intercourse” by sending mission to Ch’ing court under the leadership of Kazi Dev Dutta Thapa (Manandhar, 1999), following the visit of Chinese officials, including General Pa-Chung, Ao-hui, and Cheng-teh, who were dispatched by Chinese Emperor Ch’ien Lung to investigate the situation in Tibet after the outbreak of Nepal-Tibet war of 1788. China had also sent its Yang Tingliang mission to Nepal to achieve its goal of convincing Kathmandu to send a Nepali mission to the Ch’ing Court (Martynov, 1983). Hence, the Nepali missions shouldn’t be understood as a “tributary” because available evidences not only suggest that the missions were received with full honors by China. They not only exchanged gifts; Nepali rulers were also bestowed with Chinese titles. The title of “Ertini Wang” (Prince of the Law) was given to King Rana Bahadur Shah, and the title of “Kung” (The Bravest Rank of a Duke) was conferred on Regent Bahadur Shah (National Archive of India, n.d.), with an objective to prevent Nepal’s aggressive policy towards Tibet (Rose, 1971). Later, Jung Bahadur Rana became the first Prime Minister of Nepal to obtain the Chinese title of “Thong-Lin-Pimma-Kokang-Wang-Syan” (The Leader of the Army, the Most Brave in Every Enterprise, Perfect in Everything, Master of the Brave People, Mighty Maharaja). The Rana prime ministers after Jung Bahadur, including Ranaudip Singh in 1878, Bir Shamsher in 1889, and Chandra Shamsher in 1902 were conferred with the same Chinese title; and thence, Nepal sent its mission to China, as a sign of

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its goodwill towards the Emperor of China prolifically attesting why it shouldn’t be reckoned as “tributary mission.” Because, while recollecting the stories attached to Lord Macarteny’s mission to Peking from 1792– 1793, a large number of presents were also sent by King George III of England as a matter of goodwill to Chinese emperor. Here, one may argue, can we consider English mission to Beijing Court as a tributary, as it entirely resembled that of the Nepali missions to China! Other forms of cultural exchanges between Nepal and China also convincingly refute the misrepresentation of Nepal’s five yearly missions as “tributary”. (Photo 2.1). Nepal sent a quinquennial mission to China after the end of the NepalChina war of 1792 and the practice of sending missions discontinued after 1906. With the beginning of the Chinese Revolution of 1911,

Photo 2.1 The yellow-colored house with green windows is the private residence of Chiniya (Chinese) Lama residing in the Bouddhanath area, which is also popular as the Vatican of Tibetan Buddhism. The first Chiniya Lama, Taifo Zhing, came to Nepal as a Chinese monk from Sichuan province of China during the premiership of Jung Bahadur Rana, who initially kept him as his interpreter. Zhing’s negotiation was very helpful in ending the third Nepal-Tibet war in 1855 AD. As an award for his contribution, he was allotted to head the Bouddhanath Stupa. Since his days, the chief priest of the Bouddhanath temple is popularly known as Chiniya Lama (Chinese Lama) (From Author’s Archive)

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which overthrew the Ch’ing dynasty, and after the emergence of the Republic of China under Dr. Sun Yat-Sen, the Nepali government ended the custom of sending missions by not dispatching Nepali quinquennial mission to China in 1911. But, with an objective of renewing relations with Nepal, in May 1930, the Nationalist Government of China under Chiang Kai-Shek dispatched Pa Ve Sun, Councilor of the Committee of Mongolian and Tibetan Affairs, with various presents and letters to the Nepali King Tribhuvan Bikram Shah and the Prime Minister Bhim Shamsher (Royal Nepal Academy, 1988). Also, in the February of 1932, the Chinese Nationalist Government sent a special mission to Nepal to confer on the Nepali Prime Minister Bhir Shamsher, the Honorary rank of General of the Chinese Army (Lee, 1932). The Nationalist Government of China sent its goodwill missions to Nepal in 1934 and 1946. Until the establishment of diplomatic relations between Nepal and communist China in 1955, Nepal’s southern neighbor, India, perceived Nepal-China ties as “tributary” and “suzerainty.” Such perceptions are, however, doomed to criticism citing the persistence of colonial hangover in India’s foreign policy behaviors towards its South Asian neighbors. Actually, suzerainty is an attribute of feudal laws and from the political and legal perspectives, the tributary is less real and more psychological (Manandhar, 1999). Diverse interpretations of the peace Treaty of 1792 (The Betravati Treaty), which had commenced Nepal’s five-yearly missions to China, indicate at the same. To the Chinese authorities, Nepal had accepted Chinese suzerainty in the peace treaty (Cammann, 1951). But, Nepal strongly denies that. China’s lack of interest in rescuing Nepal upon latter’s request during the Anglo-Nepal war (1814–1816) exposed how China didn’t adhered to Article 4 of the Treaty legally. Chinese Resident at Lhasa, on behalf of Peking Court, had also rejected Nepal’s request for military assistance against the British India in 1814 (Rose, 1961). While China claimed suzerainty over Nepal, it lacked its responsibility, which a suzerain principally owes to its tributary or vassal. Thus, it was more psychological in nature. Although under the Article I of the treaty, Kathmandu agreed to treat the Chinese emperor as arbitrator for any dispute between Nepal and Tibet, it doesn’t imply acceptance of China’s suzerainty. Even from the perspective of international law, acceptance of third party’s arbitration doesn’t mean suzerainty of that third party. Nepal and Tibet had gone to war from 1855 to 1856, instead of referring their disputes to China. Interestingly, Nepal acted as a mediator during the Sino-Tibetan crisis of 1911–1912 (Lamb, 1966; Upreti,

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1980), leading to withdrawal of Chinese troops from Tibet. It should be also noted that Nepal didn’t follow the timetable of the missions systematically, which a vassal state is supposed to do. Even though from 1792 to 1852, Nepal sent missions to China regularly, some of the missions were confined to Nepal-Tibet borderlands for the purpose of submitting presents and gifts. After 1852, Nepal discontinued the five-yearly missions several times without justification. Kathmandu had abolished the system unilaterally after 1906. Interestingly, the presents and gifts dispatched to Chinese court were described in the accompanying letter as “Mamuli Saugat,” which means ordinary presents, not tributes (National Archive of India, n.d.). Nepal never offered any kind of military support to China, which a vassal state usually does. Rather, Nepali Gurkha soldiers, with the consent of Nepal government, were dispatched to fight in support of British against the Chinese in the Boxing Uprising of 1900–1901. Nepal also supported British expedition (also known as Younghusband military expedition) against Tibet from 1903–1904. While Nepal’s ability to sign treaties and declaring wars in her own independent capacity without any kinds of outside support and participation signaled Nepal’s sovereignty and strategic autonomy, Nepal’s ties with China was free from vassalsuzerainty relationship. But, such a perception was not only the product of the feudal psychology of Chinese emperors. Because, even Republican China under Sun Yat Sen had included Nepal in the long list of lost Chinese territories (Bahadur, 1957; Nigam, 1968). Chinese Communist leader Mao Tse-Tung, too, made an attempt to reinstate China’s claim over Nepal in 1939 (Jain, 1959). India’s perception of the historical interactions between Nepal and China dismisses the critical analysis of how Chinese claim of suzerainty over Nepal cannot be unambigiously gauged from the western perspective. Because, the claim was more symbolic than being driven by the component of dominance. Numerous European, Asian, and African countries were listed as “tributaries” in Imperial Dynastic Chronicles. But, except for regular interactions, the Chinese court had no required information and knowledge about most of them. From the Chinese perspective, any foreign state in constant interaction with China was perceived as tributary (Fairbank & Teng, 1941) because Beijing regarded itself as superior, and other countries as barbarians. Nepal never acknowledged the five-yearly mission as tributary but as a symbol of time-honored relations. Neither with the acceptance of the Chinese Emperor did Nepal lost her sovereignty, nor did the proximity with British India entirely

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subjugated her. At times, Nepal was the prisoner of geography, and other times, it reinvented the power of geography. In the evolution of Nepal’s neutrality, and also in India’s perception of Nepal-China relations, both the variables—geography as prisoner and geography as power—are unavoidably present. India’s post-independence foreign policy towards Nepal hasn’t turned a blind eyes to these ingredients of historical linkages between Nepal and China, which is usually spotted whenever Nepal inches closer towards China. Although religion, culture, and geography have tied Nepal and India into a unique relationship, at such occasions, New Delhi takes no less time to portray Nepal-China relations as of “suzerainty” and “tributary” by raising questions over Nepal’s claim to neutrality, which Kathmandu officially adopted after 1950. In the April of 2020, when Kathmandu protested against India’s Mansarovar route claiming that New Delhi inaugurated the route through Nepali territory, Indian army chief Naravane remarked that Nepal was acting, “at the behest of someone else” (Naravane, 2020) which was an indirect reference to China. Naravane’s remarks unveiled the same old perception of New Delhi.

Himalayas as Frontiers India never wanted Nepal to develop relations with China unilaterally. Only after India signed a treaty with China in 1954 over the question of Tibet, Nepal had started to develop diplomatic relations with China (Rose & Scholz, 1980). It clearly gestured the presence of colonial elements in the foreign policy of independent India. As soon as India got its independence, during the conversation with British Field Marshal Lord Montgomery, the first Prime Minister of independent India, Jawaharlal Nehru stated, “though Nepal was an independent country, it was very closely allied to India in culture and tradition and we did not look upon it as a foreign country” (Bhasin, 2005). New Delhi unveiled its Nepal policy within the framework of “special relations,” which was earmarked to portray Nepal-China ties not as important and indispensable in comparison to Nepal-India relations. Nehru himself told to the Indian parliament on December 6, 1950, that relationship with Nepal was so intimate that the world needs to appreciate the geographical, cultural, and other forms of relationship existing between Nepal and India (Bhasin, 1994). Such an understanding about Nepal was developed by the power elites of the independent India owing to the threats emanating from the Chinese advances

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into Tibet in 1950 (Saraf, 1968). For New Delhi, consolidating ties with Kathmandu would prevent China’s influence in the Himalayan region that India has traditionally perceived as its sphere of influence (Feer, 1953). Strategically, New Delhi has never been at comfort with a third party’s influence in Nepal. India inherited such a disposition from its colonial legacy. The colonial India availed itself of Sugauli Treaty inked between Nepal and British East India Company in 1816 to coerce Kathmandu in not letting the latter get closer in its strategic and economic affairs with other countries, including the US and European countries. It can be also inferred from Viceroy Lord Curzon’s 1903 letter to the secretary of state, “… Nepal should be regarded as falling under our exclusive political influence and control.” Following the emergence of communist China in Nepal’s neighborhood and particularly with the annexation of Tibet by China in 1951, the post-colonial and independent India reinvigorated its security concerns in Nepal by resurrecting the colonial policy on Himalayan frontiers. Modern India’s strategic interest on Nepal was palpable in Jawaharlal Nehru’s statement delivered in Indian parliament on December 6, 1950. He stated: From times immemorial, the Himalayas have provided us with magnificent frontiers…we cannot allow the barrier to be penetrated because it is also the principal barrier to India. Therefore much as we appreciate the independence of Nepal, we cannot allow anything to go wrong in Nepal or permit that barrier to be crossed or weakened, because that would be a risk to our own security. (Rose, 1971)

Mao Zedong’s understanding about the Himalayan belt was also not strikingly different. To him, Tibet was the palm of China, while Nepal, Ladakh, Bhutan, Sikkim, and North-East Frontier Agency (NEFA) are its five fingers (Rowland, 1967; Schram, 1963). Today, when China attempts to pierce the Himalayas with the help of connectivity, infrastructure and investment projects under its ambitious Belt and Road Initiative (BRI) framework, Indian foreign policy formulators and implementers cherish the strategic relevance of Himalayan frontier theory in India’s foreign policy enactments (Kapur, 2007). The opening of Indian road connecting Uttarakhand’s Pithoragarh with Kailash Mansarovar in Tibetan Autonomous Region via Lipulekh in 2020 further elucidated India’s strategic interests and ambitions in the Himalayas.

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Independent India’s unremitting emphasis on “special relations” with Nepal, was the outcome of India’s security concerns in the wake of the annexation of Tibet by communist China (Muni, 2015; Suhrwardy, 1996). As a result, India not only proposed coordinating Nepal’s foreign policy, but also took initiatives in modernizing Nepal’s defense capabilities and guarding Nepal’s northern border. But, once Nepal opened itself up to the outside world including China (Rose, 1971), and concomitantly diversified its foreign relations, Kathmandu couldn’t circumscribe its foreign policy behavior to the attribute of “special relations” with India. Following the withdrawal of Indian military mission from Nepal, Kathmandu-based policymakers began to reiterate on the principle of “relationship on the basis of sovereign equality” over the Indian interest on preserving the component of “special relations” (Rose & Dial, 1969; Suhrwardy, 1996). Nepal’s opening up to the outside world under King Mahendra riled Indian policymakers, particularly when Beijing was allowed to construct roads linking Nepal’s capital with the Chinese borders. Named as the Kodari Highway, the road to Tibet not only penetrated India’s Himalayan frontier but also made Nepal’s policies of neutralization and diversification attainable (Rose & Scholz, 1980). Because, the road was anticipated to reduce landlocked Nepal’s dependency by offering an alternative to Calcutta port of India. While Beijing added a new attribute to Nepal’s diversification policy, Kathmandu’s geostrategic value burgeoned during the 1962 war between the two Asian powers. Today, geopolitical competition has seized their bilateral relations, in such a manner that they have enclosed ingredient of securitization in their foreign policy priorities toward Nepal, usually obliging the latter to compromise its claim to neutrality. Their competition over doling out aid, assistance, and investment to Nepal is also not free from the act of securitization (Khadka, 1992, 1997). For instance, as soon as the Chinese President Xi Jinping wrapped up his two-day visit to Nepal in October 2019, Beijing decided to offer 150 million RMB military aid to the Nepali Army (Giri, 2019) which not only divulged China’s increasing presence in Nepal’s defense sector but also alarmed New Delhi and Washington. Not much has changed since 1988, when King Birendra decided to purchase anti-aircraft guns from China that spurred India to impose an economic blockade on Nepal, accusing Kathmandu of violating the 1950 Treaty of Peace and Friendship between India and Nepal (Garver, 1991). The treaty was signed in the same year, when Chinese communist forces

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invaded Tibet, which was at least until China’s invasion, perceived by India as a buffer defending the Indian subcontinent from possible Chinese incursions. Assessing Nehru’s speeches delivered in the decades of 1950s and early 1960s, it can be surmised how the Himalayas were perceived as a natural defense by the Indian policymakers against “military expeditions and undesirable influences” from the North (Subedi, 1997). On March 17, 1950, Nehru had stated: It is not necessary for us to have a military alliance with Nepal. But the fact remains that we cannot tolerate any foreign invasion from foreign country in any part of the subcontinent. A possible invasion of Nepal would inevitably involve the safety of India. (Singh, 1999)

Such Nehruvian concerns are also evident in the Treaty of 1950 formalized with the signatures of the Nepali Prime Minister Mohan Shumshere J. B. Rana and the Indian ambassador Chandreshwar Prasad Narain Singh (Bhasin, 1994) against the backdrop of the democratic movement against 104-year long Rana oligarchy in Nepal (Photo 2.2). The treaty was also accompanied by an exchange of letters between the two signatories, which were chiefly concerned with the probable threats emanating from the communist China, without naming it. The letters that were exchanged along with the treaty were made public only on December 3, 1959 by the Indian Prime Minister Jawaharlal Nehru at a news conference. The use of the term “foreign aggressor” was sufficient to grasp the message of the letter sent by the ambassador of India to the Prime Minister of Nepal on July 31, 1950. With the exchange of letters, the two governments agreed, “neither government shall tolerate any threat to the security of the other by a foreign aggressor. To deal with any such threat, the two governments shall consult with each other and devise effective countermeasures.” Although the two countries were bound to assist each other in the wake of foreign aggression of any kind, why did Nepal remain a mute spectator during the time of the IndiaPakistan war and the Sino-India war? Even though Nepal was not in a position to offer any material support to India, not even a token of gesture of sympathy was expressed by Kathmandu (Bhatt, 1996). India, too, didn’t informed and sought assistance from Nepal prior waging its wars against Pakistan and China. In those junctures, Kathmandu self-glorified its attempt to neutrality by avouching how the treaty and exchange of letters restricted Nepal’s strategic autonomy and freedom.

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Photo 2.2 Indian Prime Minister Nehru (second from left) with the last Rana Prime Minister Mohan Shamsher (third from left) in a reception in 1950 in New Delhi (Photo Courtesy: Sanjay Upadhya)

Even though Nepal’s claim to neutrality intends to escape the geopolitical traps, practically, Kathmandu takes no less time to compromise its attempt to neutrality in the wake of geopolitical competition between India and China. It’s how New Delhi and Beijing have shaped and intricated Nepal’s claim to neutrality, usually obliging the latter to confine the policy of neutrality to papers. With the help of the 1950 treaty and exchange of letters, India sought to keep Nepal under its northern security system (Kumar, 1990; Mehra, 1994; Suhrwardy, 1996). Under the framework of the treaty, both the countries agreed to strengthen their relations and respect each other’s sovereignty by agreeing to “inform each other of any serious frictions or misunderstanding with any neighboring state likely to cause any breach in the friendly relations subsisting between the two governments (Article II)” (Bhasin, 1994). Here, the “neighboring state,” with whom any friction or misunderstanding may

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develop, is presumably communist China. This provision evokes the conditions embodied in Article III of the 1923 Treaty between Nepal and British India, where both the parties had agreed to inform each other of any serious frictions or misunderstanding with those states likely to rupture such friendly relations (Bhasin, 1994). The attribute of Article II’s “neighboring state” was described as “foreign aggressor” in the letter of exchange, and by “consulting with each other,” Nepal and India agreed to develop “effective countermeasures” (Bhasin, 1994). During the time when the treaty was signed, Nepal hadn’t made any attempts to neutrality in its foreign policy objectives, owing to King Tribhuvan’s policy of alignment with India. Five years later, when Nepal entered into a diplomatic relation with China in 1955, Kathmandu sought refuge in balancing strategy, which became more pronounced when Nepal made its first claim to neutrality in 1962, as a foreign policy response to Sino-Indian border war. Although the treaty pledges to acknowledge and respect each other’s sovereignty, political independence, and territorial integrity; continue diplomatic relations; and to grant on a reciprocal basis to the nationals of one country on the territories of the other the same privileges; over the years, the treaty provisions generated resentment in Kathmandu (Subedi, 1994; Thapliyal, 2012). Not only because it was signed by the democratic India with undemocratic Rana regime in Nepal. Also, not only because the treaty was signed without paying heed to protocol, as an ambassador from India, who was lesser in designation in comparison to the Prime Minister of Nepal, signed it on behalf of New Delhi. The way New Delhi took advantage of anti-Rana struggles in Nepal and inked the treaty, when Rana regime was on its last leg, immensely infuriated the Nepali democrats, nationalists, and leftists (Adhikari, 2012; Suhrwardy, 1996). Actually, Nepal’s policy towards India from 1947–1950 was targeted in winning support of Indian government for prolonging Rana rule in Nepal. Ranas left no stone unturned in appeasing the new government in India as they had been to British India. Ranas quickly accepted Indian advise on political reforms in Nepal, sent Nepali troops to assist Indian government in dealing with the Hyderabad question in 1948, and promptly complied with New Delhi’s proposal for a new treaty which was heavily influenced by the 1923 treaty that Nepal had signed with British India (Jha, 1997). Nehru himself admitted in the Indian parliament in 1950 about the necessity of instigating colonial doctrine to address

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the probable security threats emanating from the change in Himalayan geopolitics following China’s invasion of Tibet: we have been inheritors of many good things from the days of British rule, and many bad things also; and our relations with our neighboring countries grew up sometimes in an expansive phase of British policy, of British imperialism…Naturally, and quite frankly, we do not like, and we do not propose to like, any foreign interference in Nepal, so our relationship is intimate, and no other country’s relationship with Nepal can be as intimate, and every other country must have to realize and appreciate this intimate geographical, cultural and other relationship of India and Nepal. There is no way out except by realizing this fact. (Bhasin, 1994)

Although the primary basis of inking the treaty was India’s China scare, Beijing’s Tibet policy concomitantly terrorized the oligarchic Rana regime in Nepal to take refuge in the 1950 treaty, which Rana leaders perceived as of strategic value to prolong their rule (Mukarji, 2006). But, New Delhi was not only sympathetic towards the democratic forces revolting against the Rana regime, but also found them more reliable in advancing its policy of “special relationship” with Nepal (Suhrwardy, 1996). But, in these seven decades, since the treaty was signed, Nepal has variously expressed its reservations over Articles 2, 6, and 7, which are yet to be addressed officially by India (Thapliyal, 2012). Letters of exchange raised intense debates in Kathmandu in view of the asymmetrical relations between the two countries. To Kathmandu, treaty obligations have offered New Delhi an opportunity to interfere in the foreign, defense, and domestic affairs of Nepal. Although New Delhi has agreed in “reviewing, adjusting and updating” the Treaty of 1950 to address the current realities and contemporary needs (Jaiswal, 2017), the 2018 Nepal-India Eminent Persons’ Group (EPG) report that recommends for the revision of the treaty hasn’t been purportedly received by the Indian Prime Minister Narendra Modi, making the future of the treaty uncertain (Giri, 2021). Consequently, discussions are underway in both the countries over whether the treaty should be thoroughly revised or entirely scrapped. Rana’s helplessness in relation to India was not because of Nepal’s geographical location but primarily because of two reasons: firstly, as Rana rulers had deposited their wealth in the Indian banks, any policy not favorable to India may result into freezing of their bank accounts (Jha, 1977). Secondly, it was because of Nepal’s limited diplomatic engagement with

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the external world affecting Kathmandu’s extent and “scope of maneuverability and bargaining in its relations with India” (Jha, 1977) (Photo 2.3). New Delhi’s action was willed and intended to employ the treaty provisions in ensuring that Kathmandu didn’t compromise India’s security interests while developing relations with Beijing. Hence, India’s strategic concerns in Nepal had bourgeoned by the 1950 treaty, which restricted Nepal’s independent foreign policy by envisaging Nepal as a key component of broader Indian security framework (Suhrwardy, 1996). Because, New Delhi had developed a communist China scare, following the annexation of Tibet by China (Feer, 1953; Saraf, 1968). India’s increasing strategic interest in Nepal was the result of Indian policy to make “its exposed frontiers more secure” (Thapliyal, 1998) which was underlined by Nehru in his parliament speech of December 6, 1950, as:

Photo 2.3 Nepal’s Prime Minister Mohan Shumsher Rana and Indian Ambassador Chandreshwar Prasad Narayan Singh signing the Treaty of Peace and Friendship in 1950 (Photo Courtesy: Nepali Times )

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Our interest in the internal conditions of Nepal became still more acute and personal, if I may say so, because of the developments across our borders, because of the developments in China and Tibet, to be frank. And regardless of our feelings about Nepal, we were interested in our own country’s security, in our country’s borders. Now so far as the Himalayas are concerned, they lie on the other side of Nepal, mostly, on this side. Therefore, the principal barrier to India lies on the other side of Nepal and we are not going to tolerate any person coming over that barrier. Therefore, much as we appreciate the independence of Nepal, we cannot risk our own security by anything going wrong in Nepal which permits either that barrier to be crossed or otherwise weakens our frontiers. (Bhasin, 1994)

At the time when the treaty was signed, neither Kathmandu was in a position to import weapons from China, nor Beijing was in a position to export it because of the lack of roads, railways, and airways connecting Nepal and China. Still, New Delhi was anxiously haunted by the China scare obliging the former to take refuge in the Himalayan Frontier Theory (which accentuates Himalayas as natural frontier for India) originally advanced by the colonial strategists. Prompted by foreign policy securitization, New Delhi often looks for the ways to restrict Nepal’s defense policies with the help of the treaty. In the 1950 treaty, the provision about the import of weapons by Nepal, states: “Any arms, ammunition or warlike material and equipment necessary for the security of Nepal that the Government of Nepal may import through the territory of India shall be so imported with the assistance and agreement of the Government of India.” To reinforce its posture, New Delhi typically invokes a secret Arms Assistance Agreement, which it had concluded with Kathmandu in 1965, three years after the Sino-Indian war. Under the agreement, “India undertakes to supply arms, ammunition and equipment for the entire Nepalese Army” (Clause 3[a]) and to “replace the existing Nepalese stock by modern weapons as soon as available and also to provide the maintenance of and replacement for the equipment to be supplied by them” (Clause 3[b]). Nepal could “buy arms or ammunitions essential for its security from or through the territory of India” (Clause 5). Citing the same provisions, Nepal was prohibited from importing arms during the period of Maoist insurgency in Nepal. Perceiving China as an existential threat, New Delhi has influenced Nepal’s neutrality with the securitization of Indian foreign policy. In the early years of 1950s, India pulled out all the stops in highlighting Article II of the 1950 treaty as a document for common defense. When

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the treaty was being negotiated, even Nepali Congress leaders demanded Indian government to look after the foreign and defense relations of Nepal (Jha, 1977). But from the perspective of international law, Article II of the Treaty only demands the signatories to share military information with each other. Even the letters of exchange along with the treaty necessitate the signatories to consult each other and devise counter measures against any threats. But, consultations, information, and joint measures cannot be reckoned as common defense (Subedi, 1994). While Article II calls the two governments to “inform each other of any serious friction or misunderstanding with any neighbouring state likely to cause any breach in the friendly relations subsisting between the two Governments,” it does not mention about regular or immediate provision of information sharing. Also, it is the matter of the judgment of contracting parties to decide whether its misunderstandings or frictions with third countries are likely to cause a breach in the friendly relations with the other contracting party (Subedi, 1994). With the exchange of letters, New Delhi began to shape its relations with Nepal as a major component in the Indian security framework on the Himalayan frontier (Rose & Scholz, 1980). In 1953, New Delhi sent an Indian military mission to Nepal. In 1954, Indian posts were established on Nepal’s northern border (Cowan, 2015; Levi, 1957; Shukla, 2006). New Delhi influenced Nepal’s neutral and independent foreign policy by dictating Nepal’s foreign affairs and strategic interests, at least until King Mahendra Bikram Shah set Nepal’s diversification policy in motion. India’s Himalayan Frontier Theory, which has fashioned Nepal’s neutrality in two important ways—firstly, by limiting Nepal’s international engagements with 1950 treaty; secondly, India’s foreign policy of securitization jostled Kathmandu towards Beijing—encountered a grave challenge in 1962 war with China (Levi, 1963; Pringsheim, 1963). Consequently, it ushered in a new policy option for Nepal. Along with an alteration in the regional security environment after the 1962 war, the withdrawal of the Indian military mission and military personnel stationed at Nepal’s northern borders in 1969 (Rana, 2013) and the construction of road linking Kathmandu to Tibet, further impelled an atmosphere of neutralization and emboldened the policy of diversification. After the death of King Mahendra in 1972, his son Birendra floated a proposal to the international community for declaring Nepal as a “Zone of Peace.” The proposal had an intention to continue with the attempts to neutrality, which was officially inaugurated by his father while responding

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to Sino-Indian war. In the 1973 summit of non-aligned countries in Algeria, Birendra stated: “Nepal, situated between two of the most populous countries of the world, wishes her frontiers to be declared a zone of peace.” Despite his frequent attempts, and instant support of Pakistan, China, Bangladesh, the proposal was rejected by New Delhi finding it against the provisions of the 1950 treaty (Baral, 1988; Scholz, 1977; Shakoor, 1989). Accepting Nepal’s frontiers as a Zone of Peace would have limited the extent and scope of India’s Himalayan Frontier Theory. Hence, New Delhi never agreed to it. Rather, India continued resorting to the rationale of colonial doctrine that perceives Himalayas as the defense frontier. The colonial imprint in New Delhi’s external policies has coached the makers of India’s foreign policy in comprehending even a legitimate, justifiable and autonomous act of foreign policy diversification by a small country, as the compromise of its claim to neutrality. But, Nepal’s active support for the People’s Republic of China’s admission in the United Nations shouldn’t be seen as the compromise of its neutrality. Nepal’s neutrality substantially evolved in its foreign policy behaviors after the country joined the United Nations in 1955. Nehru himself wanted Mao’s China to join the UN in 1950s, when the UN seat was being occupied by the Republic of China (Taiwan) because keeping Beijing outside of the UN meant the former may not develop an obligation towards international law and rule-based international society. Notably, Zhou Enlai, the Chinese premier had told the first Indian ambassador to China K. M. Panikkar, “the United Nations claims to have no obligation towards the PRC, and we also have none to them” (Roy, 2018). Thus, to escape the unpredictability of PRC, Nehru made appeals to the leaders of different countries. Nepal also deciphered India’s interest in accommodating PRC in the United Nations. Hence, while addressing the 15th UN General Assembly on September 19, 1960, Nepal’s Prime Minister BP Koirala earnestly requested the assembly in accepting PRC’s seat in the United Nations. He stated, “In our opinion, the United Nations can neither become universal nor can it reflect the political realities existing in the world today until the People’s Republic of China is given its rightful place in the organization. The United Nations will not be able to fulfill effectively some of its most important purposes and functions until the People’s Republic of China is brought in” (Koirala, 1960). In post-1960 geopolitical milieu, developments on the facade of SinoNepal relations miscellaneously rippled Nepal-India relations, generating

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suspicions, and doubts in the psyche of New Delhi’s foreign policy circle over Kathmandu’s claim to neutrality. First, the signing of the Treaty of Peace and Friendship between Nepal and China in 1960. And, in the same year, Chinese Embassy was also opened in Kathmandu. Second, 1961 agreement to construct a highway connecting Kathmandu to China’s borders. Plethoric speculations hinted that “Nepal signed the Kathmandu-Lhasa road agreement with China, being alarmed at the pressure of India-based armed raids organized by the Nepali Congress elements” (Dixit, 1998). Third, China’s acceptance of Nepal’s Zone of Peace Proposal and denunciation of merger of Sikkim into the Indian Union in 1975. Fourth, in 1989, when Nepal bought anti-aircraft guns from China, India heavily penalized the landlocked country with a blockade. Fifth, China’s deepening engagement with Nepal’s security forces after the abolition of monarchy. Sixth, Nepal and China signed trade and transit treaties in the wake of 2015 Indian blockade on Nepal. Seventh, Nepal officially signed China-led BRI projects in 2017, of which India is not a member. Eighth, Kathmandu and Beijing signed an agreement on trans-Himalayan railways connecting Chinese railways to Nepal’s borders with India on the backdrop of Nepal’s policy of trade diversification. Ninth, India identified “China connection” in Nepal’s new map that Kathmandu unveiled in 2020.

Peaceful and Stable Neighborhood “You can change your friend, but not neighbors.” It is a frequently cited axiom in international relations. New Delhi, too, has remained vigilant of its neighborhood since the days of Kautilya, India’s ancient strategist thinker (Pande, 2018, 2020). Jawaharlal Nehru emphasized on democratic, stable and peaceful neighborhood. His successors, including Indira Gandhi and Rajiv Gandhi, even pursued the coercive approaches to promote democracy in the neighborhood (Muni, 2009). Almost all the governments, so far, in New Delhi have steered their Nepal policies by constraining themselves to the provisions in the 1950 Treaty, until the Gujral Doctrine exceptionally surpassed the security provisions offered by the treaty while perceiving Nepal-China relations, in 1990s. As a set of principles guiding India’s neighborhood policy (Murthay, 2008), Gujral Doctrine displayed an accommodative feature of India’s Nepal policy (Bhattarai, 2020). Inaugurated by former Indian Prime Minister Inder Kumar Gujral, when he was the foreign minister in 1996, the

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Gujral Doctrine emphasized that New Delhi should not impose its interests and ambitions while demanding reciprocity from its small neighbors (Murthay, 2008). As a result, Kathmandu developed a realization that New Delhi won’t be restricting its perception towards Nepal (and latter’s foreign policy diversification) be shaped only by the provisions of 1950 treaty, and allow Kathmandu to pursue an independent foreign policy. The doctrine introduced in the post-Cold War setting emphasized on five points. First, New Delhi won’t demand reciprocity from the neighboring countries, rather it accommodates their interests. Second, New Delhi strictly objects in using the territory of one country against the interest of another country. Third, India’s neighbors should stand against any kinds of foreign intervation in the internal affairs of another country. Fourth, all the countries in the region must respect each other’s territorial integrity and sovereignty. Fifth, in case of any disputes, the settlement should be sought through peaceful bilateral negotiations (Gujral, 1998). Hence, Gujral Doctrine envisions a peaceful, stable, cooperative, and affluent neighborhood, and as such, favors the hopes and aspirations of the small countries (Gujral, 1997). When New Delhi doesn’t demand reciprocity, and unconditionally accommodates the interests of the neighboring countries, Nepal’s claim to neutrality remains free of challenges (Mishra, 2020). While weighing Nepal-China relations from the perspective of Gujral Doctrine, New Delhi is not anticipated to perceive Nepal’s foreign policy diversification as hostile to Indian interest. Although the doctrine refused to toe Himalayan frontier theory advanced by colonial strategists, it was difficult for Gujral to resolve the contradiction between the idealistic standpoint of international relations and the realpolitik worldview in relation to India’s national interests (Dixit, 2004). Gujral believed that in spite of the bourgeoning problems that have riveted India’s relations with China and Pakistan, New Delhi should make attempts for negotiations with an aim to normalize the relations. Gujral Doctrine thrives on the principle that diplomacy and foreign relations are not “only the elitist responsibility entrusted only to the certain power structure, but a participatory and democratic exercise, going beyond government-togovernment interaction” (Dixit, 2004). As Gujral constantly reiterated on the relevance of non-aligned movement for India’s neighborhood policy, when the effectiveness of the non-aligned movement was being questioned, it came as a ray of hope for Nepal’s neutrality too. Because, as per the spirit of Gujral Doctrine, New Delhi, being the largest political

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unit in the South Asian region, should display a sense of responsibility towards the concerns, hopes, and ability of its neighbors (Gujral, 1997, 1998). Gujral’s advocacy on the democratization of diplomacy and international relations is undeniably advantageous to the trade and foreign policy diversifications of the small countries in the region, as his policy orientations demanded New Delhi to address the asymmetrical relations existing between itself and the small countries in the region (Mishra, 2020). Gujral responded to Nepal’s pressing demand for the revision of the 1950 treaty between Nepal and India by publicly stating that India was willing to revise or abrogate the treaty. Even though Gujral Doctrine is slightly rebuked for its failure in billeting the spectrum of political realism and strategic decisiveness, his idealism and commitment to regional peace and stability are still cherished and valued by the foreign policy decision-makers of the small countries. Gujral Doctrine doesn’t restrict small countries like Nepal to maintain equal friendship with all. But, in the 1950s, it was almost unimaginable. When Tanka Prasad Acharya initiated the policy of equal friendship with all, New Delhi was instantly alarmed. As soon as Acharya was appointed the Prime Minister of Nepal in 1956, he emphasized on the policy of equal friendship with all the countries, instead of restricting Nepal to the ingredients of special relations with India. As a result, diplomatic relations were established with Japan, Soviet Union, China, Egypt, and Ceylon (Devkota, 1958). He desired to maintain direct trade relations with all the friendly countries, instead of developing trade relations only through India, as directed by the Treaty of Trade and Transit of 1950. But, Economic Assistance Agreement signed between Nepal and China during Acharya’s visit to China on October 7, 1956, and ChouEn-Lai’s remarks during his Nepal visit in 1957 that the existing affinities between Nepal and China cannot be “affected even by the Himalayas,” put New Delhi at discomfort. Because of its deteriorating relationship with Beijing, India perceived China’s entry in Nepal as the balancing strategy of Kathmandu to counterbalance Indian influence in the Himalayas, in the name of equal friendship with all. India’s frustrations over Nepal became more pronounced when Nepal, for the first time, didn’t vote with India in the United Nations General Assembly in 1956 (UNGA Official Record, 1956). On the Hungarian issue, Nepal had voted against the Soviet Union. When Indian President Rajendra Prasad visited Nepal in 1956, immediately after Acharya’s return from China, he had delivered a speech in the Royal

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banquet which echoed the provisions of 1950 treaty. Rajendra Prasad stated, “any threat to the peace and security of Nepal is as much a threat to peace and security of India. Your friends are our friends and our friends yours…Nepal is with us and we are with Nepal” (Bhasin, 1994). While Kathmandu interpreted Rajendra Prasad’s speech as New Delhi’s prescriptive measure coalesced into a hegemonistic posture against small countries’ foreign policy diversification, New Delhi perceived Kathmandu’s interpretation as a palpable shift in Nepal’s foreign policy from alignment with India to a budding policy of non-alignment with its neighbors (Thapliyal, 1998). Explaining his China policy to India on December 4, 1956, Acharya stated during his India visit that instead of getting involved in the contentious issues between India and China, Nepal aims to draw benefits from the “progress” and “development” in the neighborhood. He said, “I hope that India’s nearest neighbor, Nepal, will also benefit by your progress and development…China too, with India, has to shoulder a great international responsibility. Nepal too considers its her duty and responsibility to help world peace by the maintenance of India-China friendship, cooperation and unity” (Bhasin, 1994). Unlike Tanka Prasad Acharya’s foreign policy of maintaining equal relationship with India and China, Dr. Kunwar Inderjeet Singh’s government, which came into force after the dismissal of the coalition government of Acharya on July 14, 1957, went on restoring “special relationship” with India. Singh took no less time to support India’s position on the Kashmir issue. In the press conference of August 3, 1957 in Kathmandu, he stated, “We shall support India over the Kashmir issue. There is no doubt about it. Kashmir was and is a part of India and the people of Kashmir desire to live with the Indian Union; we respect their wishes (Bhasin, 1994).” Halting Nepal’s diversification policy, which was also advantageous for the gradual evolution of Nepal’s neutrality, Singh strictly adhered to the policy of maintaining special relationship with India. He didn’t permitted Soviet Union and China to establish embassies in Kathmandu (Kessing’s Contemporary Archive, n.d.) This episode shockingly reveals how change in guard invites discernable shift in the foreign policy priorities and behaviors. In the Nepali context, such a change molded the nature, extent and scope of its budding neutrality, in relation to the immediate neighbors. Gujral Doctrine was also the upshot of change in guard in New Delhi, which triggered a new discourse of “sovereign equality” in the conduct of

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Indian foreign policy towards the small neighboring countries. Leadership in Nepal after Singh was demanding the same posture from India in the late 1950s. Critiquing Nehru’s November 27, 1959 statement, “…any aggression on Bhutan or Nepal will be considered by us an aggression on India,” Nepal’s Prime Minister Bishweshwar Prasad Koirala stated on November 29, 1959, “we are at peace with everybody and we do not apprehend any danger from any quarter. I don’t know the international status of Bhutan and its relations with India. But Nepal is an independent sovereign nation and there can never be any doubt with regard to this fact” (Bhasin, 1994) (Photo 2.4). But, the policies pursued by Nepal wasn’t perceived by New Delhi as an act of accommodation with the neighboring states. Rather, it was viewed as adventurism cashing on the competition and conflict between its two neighbors. Because, following the annexation of Tibet by China, India was warily eying for such a government in Nepal that would remain sensitive to Indian security interest. Nehru discovered the same in B. P.

Photo 2.4 Indian Prime Minister Jawaharlal Nehru addressing a state banquet which was given in his honor in June 1959 by King Mahendra and Queen Ratna. On the extreme right, Prime Minister B. P. Koirala is listening (Photo Courtesy: Sanjay Upadhya)

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Koirala-led government after the latter told a press conference on June 20, 1959, in Kathmandu that “there was no difference between the views of the two governments on international and allied problems including Tibet” (Bhasin, 1994). On June 14 of the same year, Nehru had declared that “there is concurrence between India and Nepal in their approach to the Tibetan questions” (Bhasin, 1994). Nehru’s statement made the political community in Kathmandu wonder, whether India was trying to pull Nepal into the Cold War against China on the backdrop of SinoIndia border dispute (Devkota, 1958). Although Koirala himself stated that there was no fear of aggression from both the neighboring countries, ironically, he signed the Joint Communique with Nehru on the issues of common security interest. On the one hand, Koirala was emphasizing on neutrality, on the other hand, he had obligations to joint security interests with India (Nath, 1975). Such dilemma manifested by Kathmandu many times in different episodes of history makes New Delhi apprehensive about Nepal’s attempt to neutrality on Sino-Indian dispute.

Doubts and Suspicions When Sino-Indian relations had deteriorated, Nepal and China were strengthening their friendship. Such was the perception of the policymakers in New Delhi, before the Sino-Indian war broke out in 1962. Even Nepal’s independent foreign policy choices were reckoned by New Delhi as the compromise of its neutrality. When Chou-En-Lai’s visit to India in the April of 1960 failed to yield any results on resolving SinoIndian border disputes, he had stopped over in Nepal on his way back to China. During his sourjoun, Treaty of Peace and Friendship was signed between Nepal and China on April 28, 1960, with an affirmed faith in Panchsheel . On March 21 of the same year, during the visit of Nepal’s Prime Minister Koirala to China, an Agreement on the Question of Boundary was signed to delineate boundary scientifically on the basis of traditional customary line. Diplomatic efforts were made to resolve the issue regarding the ownership of Mt. Everest. Chinese attempt in resolving the contentious issues through the spirit of accommodation and generosity earned numerous sympathizers in Nepal, while Beijing and New Delhi were on the threshold to wage a war against each other. In the December of 1960, when King Mahendra took over power in Nepal, it was received in India with severe criticism. For Nehru, it was a “setback to democracy” (Lok Sabha Debates, 1960). Politically

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unstable neighbor was not in India’s interest, particularly at the time when Sino-Indian relations had withered and waned. But, King Mahendra dealt with Indian reprehension by developing relations with Beijing and Islamabad, which whom India’s relations had turned topsy-turvy. Mahendra’s demeanor once again made New Delhi severely critique Nepal’s attempt to neutrality by playing one neighbor against the other for its own strategic advantage. But, during his visit to India on April 18, 1962, King Mahendra attempted to persuade India by justifying that Nepal’s relations with China were based on Panchasheel (five principles of peaceful co-existence) and the construction of Kathmandu-Kodari road was unavoidable for conducting trade with Tibet (ICWA, 1962). Although Mahendra highlighted on the economic significance of the road for landlocked Nepal, India perceived it as an infringement of Himalayan frontiers and a strategic gain for China. India’s discomfort augmented further with Marshal Chen-Yi’s statement on October 5, 1962. On the first anniversary to mark the signing of China-Nepal border agreement, Chen-Yi said, “In case any foreign army makes a foolhardy attempt to attack Nepal…China will side with the Nepalese people” (Hagen, 1990). As Chen-Yi’s remarks came just before the outbreak of 1962 war, it was viewed as a militant posture of Beijing to contain Indian influence by consolidating its relationship with Nepal. But, Nepal was largely concerned about its own freedom and security against the backdrop of the newly evolving changes in the regional balance of power. Still, Nepal couldn’t call back the Nepali Gurkha soldiers providing their service to Indian army, despite China’s appeal to withdraw by using loudspeakers in the disputed Himalayan borders (Ramakant, 1988). Apprehending the intricacies impelled by the war between the two hostile neighbors, Nepal’s policy of maintaining “equal friendship with all” was also paralyzed that was reflected in the statement made by King Mahendra in a press interview on November 10, 1962: Nepal longs to maintain cordial relations with all friendly countries. She never interferes in others’ affairs nor she tolerate others’ interference in her affairs. So, this being a dispute between India and China, Nepal deems it most appropriate that they should resolve it through mutual understanding. (Shah, 1962)

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After facing a defeat in the war, New Delhi had no other options than to readjust its policy towards Nepal by giving primacy to aid and investment for Nepal’s infrastructure development and connectivity projects. But, with the readiness of western donors to invest in Nepal, Kathmandu was prepared to distance itself from India, which concurrently triggered competitions among donor countries (Khadka, 1992, 1997). Following India’s failure in defending its own territory against Chinese aggression, Nepal started to modernize its defense apparatus by diversifying its sources for defense supplies. In 1964, Nepal had announced that it agreed to receive modern light weapons and military equipments from the US and UK, which eventually compelled New Delhi to sign an Arms Assistance Agreement with Nepal in 1965 with an objective to modernize Nepali Army. The agreement emphasized on New Delhi’s role as the primary supplier of arms to Nepal although the latter was “free to import from or through the territory of India, arms, ammunition or warlike material and equipment necessary for the security of Nepal.” Later, in 1969, Prime Minister Kriti Nidhi Bista decided to annul it by stating that “Nepalese government has written to New Delhi that so far as Nepal is concerned the agreement doesn’t stand any more” (The Times of India, 1969). Although Indian Ambassador Raj Bahadur is said to have conveyed the wish of the Indian government to annul the agreement, there is no proof of correspondence between the two governments on the cancelation of the Agreement. Thus, a kind of confusion continues whether the Agreement exists or not. As Kathmandu attempted to diversify its sources of defense supplies, Bista also demanded the withdrawal of Indian military posts and Indian Military Liaison group from Nepal, which was dispatched in 1962 to “reorganize and modernize” Royal Nepal Army. Bista claimed that “because of the dearth of trained Nepali personnel, Indian radio operators had been stationed in the checkposts on Nepal-Tibet border, but as Nepalis are trained with India’s assistance, Nepali Government feels that Indian personnel should withdraw. Also, Indian Military Liaison Group has completed its work and should withdraw” (Bista, 1969). In addition, Kathmandu was quite keen to showcase its non-alignment to the world, following the withdrawal of Indian military presence from Nepal. However, security concerns of India and Nepali sentiments on autonomy and sovereignty have always moved parallel to each other (Thapliyal, 1998). With the emergence of Bangladesh in 1971, following the inability of Beijing to prevent the disintegration of Pakistan, New Delhi’s nuclear

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explosion and annexation of Sikkim in 1974, India’s national power capabilities had significantly surged up since 1962 that not only raised question on the effectiveness of Nepal’s India policy (Rose, 1977) but also generated an environment for Kathmandu to recognize Bangladesh in the January of 1972.

Zone of Peace Proposal After the death of King Mahendra in 1972, his son Birendra Bikram Shah’s attempts in diversifying Nepal’s foreign policy, particularly Nepal’s proposal of establishing itself as a Zone of Peace, was perceived by New Delhi as Kathmandu’s another step towards reducing dependence on India for its security. Although he continued Mahendra’s policy of “equidistance” between India and China, he didn’t accepted the traditional lens of perceiving Nepal as a “buffer state.” Considering the concept of buffer as “outmoded,” he redefined the geostrategic situation of Nepal. Birendra stated, “Nepal is not a part of the subcontinent. It is really that part of Asia, which touches both China and India. Our historical experience is that we maintain friendly relations with both these countries” (Shah, 1973). His policy options were widely influenced by external and domestic obligations. While emergence of Bangladesh had altered the regional security dynamics, Kathmandu feared that India’s support to the rebel Nepali Congress may destabilize Panchayat regime. Actually, one of the distinguishable characteristics of small states is “their extreme suspicion of any possibility of an external influence adversely impinging on their independence or sovereignty” (Rajan, 1988). Sikkim’s merger with the Indian Union following New Delhi’s support to the democratic forces in the hilly state made Nepal alarmed of the possible outside interference. In the NAM summit of Algiers in 1973, King Birendra emphasized on the importance of combating external intervention and foreign aggression targeted towards the non-aligned countries (Shah, 1973). Although New Delhi assured Kathmandu of non-intervention in the internal affairs of Nepal (Gandhi, 1973), Panchayat regime in Nepal discovered India’s involvement and support in various instances, including that of August 1972, when an armed outfit of the Nepali Congress from Indian territory assaulted a police sub-station in Haripur of Nepal. The hijack of Royal Nepal Airlines plane by the Nepali Congress in 1973 ferrying 3 million Indian Rupees of Nepal State Bank was reported to have been done in close collaboration with the Nepali Congress leaders in India.

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The anti-Panchayat activities conducted from the Indian soil and the alleged indifference of New Delhi to thwart them was the major source of insecurity to Nepal. Annexation of Sikkim by India in 1974 aggravated Nepal’s external security threats. Kathmandu protested the merger of Sikkim in the forms of strikes and anti-India demonstrations. Indian Cooperation Mission and Indian Culture Mission in Kathmandu were stoned by the demonstrators, resulting into India’s displeasure. New Delhi even dispatched a Protest Note asking Kathmandu to apologize for the anti-India demonstrations, provide compensation for the damage made during the protest and demonstration and publicly accept Sikkim as a part of India (Rasgotra, 1994). Precisely, Nepal-India relations were strained by the merger of Sikkim into the Indian Union. With nuclear explosion at Pokhran on May 18, 1974, by India, Nepal’s security threats further bourgeoned, although Kathmandu was looking for the ways to assert its strategic autonomy by converting itself into a Zone of Peace (The Rising Nepal, 1973). Also, on the occasion of his coronation on February 25, 1975, Birendra reiterated on Nepal’s faith in non-alignment and the country’s desire to institutionalize peace through Zone of Peace by stating that: We adhere to the policy of non-alignment because we believe that it brightens the prospects of peace. We need peace for our security, we need peace for our independence, and we need peace for development. As a matter of fact, Nepal in the past had signed formal peace and friendship treaties with both our friendly neighbors. And if today, peace is an overriding concerns with us, it is only because our people genuinely desire peace in our country, in our region and everywhere in the world. It is with this earnest desire to institutionalise peace that I stand to make a proposition—a proposition that my country, Nepal, be declared a Zone of Peace. (Shah, 1975)

The proposal became Nepal’s major foreign policy objective, when it was accommodated in Nepal’s constitution through the third amendment on December 15, 1980. Amended Constitution’s Article 19(6) declared that “the foreign policy of the Panchayat system shall be striven for making Nepal a Zone of Peace in pursuance of the basic purpose of the UNO and the principles of non-alignment” (Shaha, 1990). India was, however, riled by Nepal’s attempt to internationalize the Zone of Peace proposal. Even though Nepal believed that the proposal adhered to the spirit of non-alignment, India perceived it as against India’s security

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concerns in Nepal, and also reckoned that with the proposal, Kathmandu didn’t aim to be a neutral state (Singh, 1985) as it had no desire of being an Asian Switzerland by abandoning the active membership of NonAlignment Movement for neutrality (Giri, 1976). Responding to India’s reservation over Kathmandu’s proposal, Prime Minister of Nepal Tulsi Giri stated that “Since Nepal’s territory lies both to the North as well as to the South of the Himalayas, there is no reason to suppose that Nepal’s geopolitical importance in India is greater than it is to China” (Thapliyal, 2003). India’s reluctance in endorsing the proposal, however, was chiefly due to Kathmandu’s emphasis on the policy of equidistance between India and China. India’s acceptance of the proposal would have signaled that there was a dearth of convergence in the security perceptions of Nepal and India (Nanda, 1987). Although India’s rivals, China and Pakistan, had extended their “firm support” to Nepal’s proposal (Rana, 1983), the US expressed its inability to endorse the proposal unless Nepal’s immediate neighbor India does it. The American standpoint was made clear by the US President Ronald Reagan, during Birendra’s visit to the US in 1983. Reagan stated that “We Americans support the objective of Your Majesty’s Zone of Peace Proposal and we endorse it. In the meantime, we encourage you to continue to work closely with your neighbors to make Nepal’s Zone of Peace Proposal a reality” (Reagan, 1984). The response from the USSR and France was also non-committal (Muni, 1975; The Rising Nepal, 1975). The proposal was, however, dismissed by the democratic governments after 1990 and it was not incorporated in the newly promulgated constitution too, as the proposal was associated with the King. The inability of King Birendra to get the Zone of Peace proposal successfully materialized, made the Panchayat regime realize the importance of taking India into confidence. Such a realization is still missing in the foreign policy agendas and behaviors of the democratic leadership in today’s Nepal too.

Policy of Securitization Frequent change of regimes has always been detrimental to Nepal’s foreign policy of non-alignment and its claim to neutrality. Surveying Nepal’s foreign policy from 1950 to 1990, it has been realized that Nepal has, in no circumstances, been able to evince an unambiguously neutral foreign policy, not only because of its geographical location, but more because of its policy of appeasement that was initially adopted

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by Ranas, and policy of balancing advanced by King Mahendra and chased by King Birendra. Also, because of Nepal’s limited engagement in world affairs and unusual confinement to its neighborhood, a sharp divergence in the policy and practice, when it comes to Kathmandu’s attempt to neutrality was visible in different episodes of history. Above all, the securitization policy of India and China towards Nepal made latter’s claim to neutrality appear more ambivalent. As it is important to understand the nature of regional security environment while assessing Nepal’s neutrality in a systematic manner, comprehending New Delhi’s perception of Nepal-China relations offers a clue. To Kathmandu, China comes as a resort in modulating Indian influence in Nepal; while for Beijing, Nepal appears as a strategic gateway to enter South Asia (Tao, 2017). But, for New Delhi, increasing presence of China in Nepal is maleficent to its security and strategic interests in the South Asian region. Kathmandu endorsing Beijing’s unprecedented involvement in Nepal has already made New Delhi anxious upon the fear of loosing its traditional sphere of influence. When Kathmandu sought to purchase anti-aircraft guns, light arms, and ammunition from Beijing in 1988, New Delhi perceived it as the gross violation of 1950 treaty and an infringement of 1965 agreement between Nepal and India. Although New Delhi had been the principal supplier of arms to Nepal since 1950s, Kathmandu complained that as India did not pay heed to Nepal’s request for anti-aircraft guns in 1972 and 1976 saying that Kingdom had no need, it had to approach China (Garver, 1991). After the first consignment of arms started to reach Kathmandu through the Chinese-built Araniko highway, Indian Prime Minister Rajiv Gandhi dispatched a special envoy to the Royal Palace in Nepal in order to prevent Kathmandu from future arms purchases from China, and to seek assurance that the purchased weapons wouldn’t be used against India. But, King Birendra not only insisted on the sovereign right of Nepal to purchase the weapons for its internal security, but also refuted any kinds of security threats to India. However, when he shared his plan about increasing the size of Nepali army, it spiked India’s security concerns over the probability of SinoNepal defense ties budding into a “Pakistan-like relationship with China” (Upadhya, 2012). Not only during the Cold War, New Delhi’s perception of NepalChina relations was driven by India’s security concerns. Even today, Nepal’s admission into BRI is perceived, as the possibility for Beijing to develop defense ties with Nepal against India. When Kathmandu officially

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joined BRI in 2017, Narendra Modi’s administration in India appraised it as Nepal’s geopolitical ambition because the Himalayan country was selecting the connectivity projects under BRI, when New Delhi and Beijing were locked in a standoff in Doklam. Nepal signed BRI just a month before the Doklam standoff. Although India’s South Asian neighbors initially perceived Modi’s neighborhood first policy as in line with the Gujral Doctrine, the ensuing episodes impelled by the neo-Kautiliyan approach in Modi’s policies confirmed the stern divergence from the accommodative spirit of Gujral Doctrine. The presence of the heads of the governments of all the South Asian countries to attend Modi’s first oath-taking ceremony in 2014 signaled a departure in India’s neighborhood policy. The presence of Pakistani Prime Minister Nawaz Sharif in his oath-taking ceremony was perceived by the regional diplomats as the rejuvenation of SAARC. But, in no time, India’s neighborhood policy rehabilitated the legacy of securitization, which it inherited from the British colonizers. Today, New Delhi has shaped Nepal-China relations in an assorted manner. While India’s interventionist policies, hegemonic posture, and the sporadic use of coercive tactics have goaded Kathmandu closer to Beijing (Ganguly & Brandon, 2015), policymakers in New Delhi take no less time to vent ire against the power elites in Kathmandu for cultivating ties with China by compromising the “special” relations with India (Singh & Behal, 2020). Although a regional power like India, which today aspires to be a great power, is principally expected to project a degree of accountability and responsibility towards the South Asian region, New Delhi has chosen the path of hegemony and dominance while dealing with its neighbors (Bhasin, 2008), in the context of China’s increasing presence in India’s backyard. Because of New Delhi’s coercive measures and interventionist policies, South Asian countries including Nepal are anomalously lured by China’s mega infrastructure connectivity projects. For example, Nepal tiptoed towards China in the wake of India’s “unofficial” blockade on Nepal (Ganguly & Brandon, 2015). When India’s Nepal experts chant the mantra of “special” ties, Nepali folks are left to wonder whether India’s micromanagement of Nepal’s political spectrum, continuity of its interventionist policies, and coercive actions including blockade make the bilateral relations “special.” The concept of “special” relations was strategically tabled by India in the early years of 1950s to prevent Nepal from developing bilateral relations with China. Citing the significance of cultural relations and

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open borders between the two countries, the idea of “special” relations fulfills India’s objective to keep Nepal under its sphere of influence. After King Mahendra understood India’s motive to outweigh Nepal’s bilateral relations with other countries, he instantly inaugurated the policy of equal relations with all the countries, not the “special” relationship with one country. Mahendra’s attempt towards foreign policy diversification was driven by the efforts to go beyond the neighborhood. While King Mahendra was developing a close tie with the US during the presidency of Lyndon B. Johnson, political leaderships in New Delhi and Beijing raised their eyebrows. When Mahendra received a grand welcome from the US President Johnson in the US in 1967 (The New York Times, 1967), Nepal’s two neighbors, who had almost ceased communicating with each other after the 1962 war, started to remain in communication regarding the implication of the proximity between Mahendra and Johnson in the global context of Cold War. The intimacy between Mahendra and Johnson was more pronounced after the American president dispatched a physician to take care of King Mahendra when the latter had a heart attack in 1968. Until his death in 1972, Mahendra skillfully balanced Nepal’s relations with both of its neighbors: at times with policy diversification; once in a while with claim to neutrality; and on occasions, by getting closer with the superpower like the US. India’s perception of Nepal-China relations is colossally driven by the extent of the political socialization of the first batch of Nepal’s democratic and communist leaders in India (Thapaliyal, 2019). Those Nepali revolutionary leaders, who fought against Rana rule in Nepal were either politically socialized in Banaras or Calcutta. They also took part in the Indian independence struggle, which highly encouraged and influenced Nepal’s democratic movement. If the first batch of Nepali political leaders had been educated in the West, India’s perception of Nepal would have been shaped differently. But, the Nepali political leaders along with the support of King Tribhuvan not only stood by the Indian freedom fighters but also demanded a back-up position from independent India to overthrow the Rana regime from Nepal in 1950. Demanding Indian support to protect your regime and government is still a political ritual in Nepal as almost all the mainstream political parties in Nepal, either communist or democratic, nationalist or Madhesh-based, once had their political schooling from the Indian leaders (Bashyal, 2016). Despite the presence of ‘so many India’ in the Nepali political spectrum, Indian news channels take no less time to portray Nepal as a proxy to China with

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the intriguing new stories about how Nepal is plotting against India in close connection with China. It is India’s new China scare (Bhattarai, 2020). Because Indian news media and foreign policy experts could have easily discovered that it was India’s coercive approach that pushed Kathmandu closer to Beijing. India’s attempt to dictate Nepal’s sovereign right to promulgate its own constitution in 2015 not only fueled antiIndian sentiments in Nepal but also created an atmosphere to creep towards China in the context of the harsh Indian blockade on the landlocked country. Because of the shortage of daily goods entering Nepal from the Indian borders, power elites in Kathmandu inked a transit and transportation agreement with China in 2016. As such, Nepal got access to Chinese sea and land ports. Earlier, Nepal had access to only the Calcutta and Visakhapatnam ports in India. It’s how New Delhi has shaped Nepal-China ties. Because of looming threats from China after the communist takeover of Tibet, and following the humiliating defeat in the 1962 war with China, New Delhi left no stone unturned to take Nepal into confidence. India exercised all the tactics, ranging from interventionist approach to accommodative posture. But, ultimately, the persistence of colonial hangover in its neighborhood policy pushed Nepal towards China in an unprecedented manner. At present, New Delhi continues to portray Nepal-China ties as antagonistic to India. Even Nepal’s independent and autonomous foreign policy is perceived by India as a clandestine deed against Indian interests. For instance, when Beijing pledged to offer 150 million renminbi as military aid to Nepal Army, New Delhi understood it as a conspiracy against India. Similarly, when Nepal unveiled a new map in 2020 after New Delhi paid no heed to Kathmandu’s ceaseless call to resolve the border problems diplomatically, Indian defense officials, security analysts, and media persons saw the “China connection” in Nepal’s new map. Indian Army Chief General M.M. Naravane went on saying that decisionmakers in Kathmandu “might have raised this” concern (indicating the new map that has the disputed territories including Lipulekh, Limpiyadhura, and Kalapani) “at the behest of someone else” (The Wire 2020). Such is the new China scare for the policymakers in New Delhi. Army chief of the world’s largest democracy was making such an interpretation about Nepal’s new map, while India and China were confronting a violent clash in Galwan. India’s news channels hurriedly endorsed and validated Naravane’s claims portraying Sino-Nepal ties in a dreadful and appalling

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manner, eventually shaping the perception of the general public in India as per the interest of the state. Today, while the existing world order hasn’t been entirely dismantled and a new world order is yet to emerge, the new generation of Nepalis, now, has new aspirations. Neither the new generation of Nepalis participated in the Indian independence movement, nor did the new generation of Indian leaders know them personally, which has the advantage and disadvantage to both the countries. The advantage is that India’s micromanagement may gradually wane in the context of the absence of personal ties in bilateral relations. The disadvantage is the endless lobbies and parleys, in the dearth of personal contact, to get things done may frustrate the Nepali diplomats. Modi’s reluctance in receiving Eminent Persons’ Group (EPG) report is an apt example. The new generation of Nepalis have new aspirations from the economic rise of India and China and seek the support of the two neighbors in realizing them. But, if New Delhi continues to pay no attention to the new needs and longings of the Himalayan country, undeniably some Himalayan roads of Nepal will lead to North, not as a paradigm shift but more as what different governments in Nepal (either democratic, communist, or authoritarian) have pursued so far: if the heat from the south becomes unbearable, creep towards the shade in the north. Interestingly, even in such a situation, the power elites in Kathmandu won’t forget to jingle the mantra of neutrality using some of the popular catchphrases like “amity with all and enmity with none,” “zone of peace,” “equidistance,” “equi-proximity,” among others. It betokens how Nepal’s claim to neutrality is constrained by an inherent persistence of strategy pursued by the Nepali statecraft to offset Indian influence in Nepal.

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CHAPTER 3

China’s Perception of Nepal-India Relations

In the decade of 1960s, when Araniko Highway was being constructed linking Nepal’s capital with Chinese borders, Chairman Mao had said to his Nepali guests, “once these roads are opened, India may be a bit more respectful towards you.” Although much has varied in Sino-Indian interactions from the decade of 1960s to the early years of the 2020s, China’s intention in minimizing Indian influence in Nepal remains the same. Earlier, the means were roadways and aids. Today, the means are railways and investment pledges. Hence, this chapter highlights how China’s understanding of Nepal-India relations, at present, should be understood in the context of enticing Nepal towards China-led Belt and Road Initiatives (BRI) projects, which is deemed by New Delhi as the expiration of Nepal’s claim to neutrality. Owing to the same, this chapter sheds light on how Beijing is not pursuing this relationship out of charity and potential risks still exist for Nepal to be debt-ridden in the context of implementing BRI projects, including the trans-Himalayan railways. Even though China wants Nepal to maintain friendly relations with India, citing the civilizational and cultural linkages between Kathmandu and New Delhi, Beijing’s increasing presence in the region has already discomforted India. Beijing considers South Asia as a site to further exercise China’s “opening up” program, and concurrently incite the “corridor development” projects under the China-led Belt and Road Initiative (BRI) (Anwar, 2020). But, getting access to South Asian markets via land is © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. Bhattarai, Nepal Between China and India, https://doi.org/10.1007/978-3-030-99974-2_3

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not an easy task for China. Although Bhutan’s geography offers the swiftest way to fulfill China’s South Asian ambition, Thimphu’s inability to develop diplomatic relations with China by coming out of Indian security umbrella made Beijing cast its eyes on the 1,414-km border existing between Nepal and China’s Tibetan Autonomous Region (TAR). Among the hundreds of Himalayan passages linking TAR with the South Asian region, Nepal’s Himalayan belt provides access to dozens of such routes (Tao, 2017). But, Beijing’s desire to expand its connectivity to South Asia, which is India’s traditional sphere of influence, is not free of challenges. Thus, while offering Beijing’s perception of Nepal-India relations, this chapter also presents the geopolitical impediments against the materialization of trans-Himalayan railway between Nepal and China, which may rebrand the Himalayan country as a “burden” not a “bridge” between India and China (Bhattarai, 2021). Beijing has always counseled Kathmandu to maintain a friendly and harmonious relationship with Nepal’s southern neighbor, despite the blatant reality that New Delhi tries to avert every step taken by Nepal to creep closer to China (Bhattarai, 2020). But Nepalis find it mysterious why China offers such counseling. Possibly, China doesn’t want to jeopardize its bilateral ties with India over Nepal. Beijing’s counseling to Kathmandu reveals its perception of Nepal-India relations, which the middle kingdom reckons as rooted in cultural and civilizational ties powered by open borders and people-to-people relations. It contrasts with Nepal-China ties that are heavily influenced and informed by the interests and ambitions of the Nepali and Chinese states (Bhattarai & Ali, 2021). Nepalis don’t find it difficult to surmise New Delhi’s interests, intents and concerns as they have been interacting culturally, linguistically, economically, and politically with the Indian state and Indian people. But historically, the Nepalis have had very less interactions with the Chinese state and Chinese people because of the geographical restraint and linguistic barrier. As such, they are not well acquainted with the Chinese mind and are able to understand only the overt behavior of the Chinese (Bhattarai, 2020). But, when Chinese investment and aid to Nepal have unprecedentedly increased, it becomes important for Kathmandu-based policy makers to understand how China really thinks, when it comes to Nepal, and particularly, how the Chinese state perceives Nepal-India ties.

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How Does China Think? New Delhi has always considered South Asia as its traditional sphere of influence. But, with the increasing presence of China in the South Asian region through aids, investments, and connectivity projects, India’s clout in the region has faced grotesquely prodigious challenge (Jain, 2018). Increasing Chinese aid and investment shouldn’t be understood only as overt behavior, however. The covert motives triggering such overt actions should also be identified. Beijing’s covert intent is not confined to reducing Indian influence in the region, because there have been instances where two nuclear powers haven’t contested, rather collaborated. The inauguration of the Kailash Mansarovar route by India in 2020, which Nepal protested claiming the pilgrimage route passes through the Nepali territory of Lipulekh, ostensibly ensued from the 2015 quid-pro-quo situation between China and India (Bhattarai, 2020). Following the 2015 earthquakes, when Nepal was putting all its efforts into post-earthquake reconstruction, rehabilitation, and relief, Nepal’s two neighbors, India, and China made a decision to use Lipulekh as one of their trading points. It not only stirred controversies in Nepal, but also raised questions over the intentions of the two neighbors towards the impoverished landlocked country (Bhattarai, 2020). Besides resorting to the anti-Indian sentiments, Nepalis also wondered about Beijing’s intention, whose public image in Nepal has always been positive, and most importantly Nepali folks have always labeled China as a responsive and friendly neighbor, despite knowing what Indian Prime Minister Modi and Chinese President Xi Jinping agreed on the Lipulekh corridor without Nepal’s consent. On May 15, 2015, the two Asian giants signed a 41-point agreement to enhance “border-area cooperation through border trade, pilgrimage…and to expand border trade at Nathu La and Qiangla/Lipu-Lekh Pass and Shipka La” (MEA, 2015). In May 2020, after India announced its pilgrimage route to Kailash Mansarovar in the Tibetan Autonomous Region (TAR) of China, the Nepali public edgily wondered what would be China’s response to India’s pilgrimage route. The Chinese foreign ministry took almost a two-week time from the day of India’s inauguration to diplomatically state “no unilateral action should be done on the trijunction” (Lijian, 2020). Citing the 1816 Sugauli Treaty signed between Nepal and British India, which had fixed Nepali territory, the Nepali public further wondered as Lipulekh, according to the same treaty is not a trijunction, rather, a

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Nepali territory for them. Instead, Limpiyadhura, which is located on Nepal’s north-western corner is a trijunction. Now, Nepal’s new map has stretched its territory up to Limpiyadhura, which according to New Delhi is a “cartographical manipulation.” Thus, responding to the release of the new map by Nepal, India’s Ministry of External Affairs stated: This unilateral act is not based on historical facts and evidence. It is contrary to the bilateral understanding to resolve the outstanding boundary issues through diplomatic dialogue. Such artificial enlargement of territorial claims will not be accepted by India. Nepal is well aware of India’s consistent position on this matter and we urge the Government of Nepal to refrain from such unjustified cartographic assertion and respect India’s sovereignty and territorial integrity. (MEA, 2020)

Unlike China’s intent, decoding India’s purpose and motives is not arduous for Nepal, however. Although New Delhi labeled it as a pilgrimage route, the Mansarovar route has a strategic significance that Nepal could clearly decipher chiefly because of two reasons: firstly, the route was inaugurated during the first wave of global pandemic, when countries had closed their borders and no pilgrimage was possible in the foreseeable future (Bhattarai, 2020). Secondly, with the inauguration, India was resorting to its Himalayan Frontier Theory in the wake of the increasing presence of China in the region. In 2015, when they agreed to use Lipulekh as a trading point, Sino-Indian relations were comparatively peaceful, harmonious, and driven by their economic interest. But, with India’s entry into the US-led Indo-Pacific Strategy (IPS) and Quadrilateral Dialogue (QUAD), their relations faced a predicament, which was later aggravated by the Galwan valley skirmishes. Furthermore, the inauguration of the pilgrimage route by India’s defense minister, instead of the Indian Ministry of Road Transportation and Highways exposed New Delhi’s strategic maneuvers. India has been stationing its troops in Lipulkeh and Kalapani areas since the mid-1950s to advance its military preparations against the possibility of Chinese aggression through the Himalayas, which is more pronounced today, in the light of China’s plan to extend its Qinghai-Tibet railways up to Nepal’s borders through the mountains (Bhattacharya, 2013). Thus, the inauguration of the Indian road connecting Uttarakhand’s Pithoragarh with Kailash Mansarovar via Lipulekh resonates Nehru’s 1950 speech delivered in the Indian parliament: “from time immemorial, the Himalayas have provided us with a magnificent frontier…” (Fig. 3.1).

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Fig. 3.1 The newly inaugurated road linking Uttarakhand’s Pithoragarh to Tibetan Autonomous Region via the Lipulekh Pass (Photo Courtesy: RSS)

In the 1960s, when the Araniko highway was being constructed linking Nepal’s capital, Kathmandu, with China’s borders, Chairman Mao reckoned Nepal’s efforts towards diversification with China’s support to counterbalance Indian influence in Nepal (Garver, 1991). Today, as there remains a possibility of China accepting India’s pilgrimage route via Lipulekh, it not only dilutes Nepal’s claim over the Himalayan region of Lipulekh, but also starkly reveals the constraints of the small countries like Nepal (Bhattarai, 2020). Such a possibility is encouraged in the context of economic interaction between India and China. During the time of SinoIndian territorial dispute, there remains a less probability of upgrading Lipulekh as an economic corridor, sending a sigh of relief to Nepal. But, India has cited the 2015 quid-pro-quo with China to construct the route. Thus, New Delhi is taking advantage of its economic deal with China on Lipulekh to fulfill its strategic ambitions in the Himalayas. In 2015, when Sino- Indian bilateral trade was significantly growing, the two Asian giants eyed for an all-weather route to further increase their trade volume. The Nathula pass, which is the only operational land route between them

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is not a year-round route because of its terrain and climatic condition. Closed since the 1962 war, the snowy and perilous pass was reopened only in 2006. Thus, Lipulekh became the best choice for them. But, the 2015 agreement on Lipulekh between India and China wasn’t the first as such. It was in the year 1954, when India and China, for the first time, agreed to allow Indian pilgrims to use the Lipulekh pass. Also, during the visit of the then Indian External Affairs Minister Jaswant Singh to China in 1999; in 2005 visit of Chinese Premier Wen Jiabao to India; and, during the 2014 visit of Chinese President Xi Jinping to India, both the countries had discussed the probability of using Lipulekh for pilgrimage and trade (Dixit, 2020), which distinctly bespeaks that the two nuclear powers don’t share divergent or conflicting views on Nepal’s claim to Lipulekh (Bhattarai, 2020). Here, Nepal and the Nepali folks may wonder in regard to China’s intention: Why Beijing is planning to extend the Qinghai-Tibet railway to Nepal’s borders with India while the two Asian powers have jointly agreed to use the Lipulekh pass as an economic corridor. After the Sino-Indian skirmishes in the Galwan valley coincided with Nepal’s border dispute with India on Lipulekh, it further made Nepali folks wonder about the Sino-Indian relations, which has the dimension of cooperation, conflict, and competition (Indurthy, 2016; Konwer, 2011). When Nepal sees China and India cooperating on one side of the Tibetan Autonomous Region and confronting on the other side of TAR, the Himalayan country is left to wonder: How does China think? Although Nepali power elites have always looked up to Beijing to counterpoise Indian influence in Nepal, Kathmandu remains unsure whether Beijing will respect its sovereignty and territorial integrity in the former’s claim to Lipulekh or not. Such an extent of the lack of surety is impelled by Kathmandu’s failure in seizing how China really thinks? Instead of merely awaiting future days to figure out China’s stance on Lipulekh, it would be better if Kathmandu could at least develop a realization that without comprehending China’s motives, Nepal’s search for prosperity through China-led BRI projects (chiefly on the areas related to growthdriven development and infrastructure-impelled prosperity), cannot be materialized. Communist China perceives Nepal-India relations, today, as a rising power does. While China’s rise has already affected Nepal-India relations geopolitically, Beijing’s perception is shaped by its foreign policy of “One China” and BRI projects. In addition, Beijing also takes no less time in perceiving Nepal-India relations as an instrument of exerting its influence

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in South Asia, which Beijing generally does in two ways: firstly, by making attempts to haul Nepal outside of the Indian sphere of influence; secondly, by endeavoring to use Nepal as a strategic bridge in fulfilling China’s South Asia ambitions through the materialization of trans-Himalayan railways. Most importantly, China’s perception is determined by its strategy of Wei Qi, the protracted campaign. While New Delhi stumbles from one policy to the other in containing the rise of China, Beijing has been calmly carrying out its long-planned objectives, steadily fortifying its position, which however makes decision-makers in Kathmandu wonder, how does China think?

China’s Wei Qi Lense Wei Qi is understood as a concept of strategic encirclement (Kissinger, 2011), which according to Henry Kissinger, drives Chinese strategy. In a game of surrounding pieces, Wei Qi not only offers each player the 180 pieces or stones on the board but also the ways to reinforce his/her strength by gradually encircling and capturing the opponent’s stones. As such, it is different from the strategies used in Western chess, where the emphasis is on discovering the quickest way to capture the king. In Wei Qi, the objective is to gradually and patiently amass the assets to turn the outcomes in one’s favor. More precisely, Wei Qi emphasizes longterm strategy instead of short-term gains (Mahbubani, 2020). Most of the moves made by India in luring Nepal to turn the strategic game in New Delhi’s favor have treaded on the strategies used in Western chess. The first was limiting Nepal’s engagement in world affairs with the 1950 treaty. The second was the coercive attempt of imposing blockade on the landlocked country in 2015, which obliged Nepal to diversify its trade and transit with China because of the shortage of goods coming from India. The third was the failed effort made by the Indian Prime Minister Narendra Modi to prevent Nepal from joining Belt and Road Initiative. Unlike chess, which demands a total victory, the objective of Wei Qi is to trap the opponent into a position, where its fall is unavoidable. With the emergence of Bangladesh from its archrival Pakistan in 1971 and following the annexation of Sikkim by India in the same year when New Delhi tested its first atomic bomb, India had revitalized its strength since the 1962 war with China. These events had once again restored India’s influence at the regional front. But, today, once again, India’s clout is diminishing and it is more because of India’s unflinching

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interest in finding the fastest route to strike its opponent, which is New Delhi’s policy of securitization in relation to China’s rise and the latter’s increasing presence in South Asia. India’s neo-Kautiliyan approach, an Asiatic term for neo-realism named after ancient India’s strategic thinker Kautilya, has already pushed the small countries in South Asia towards China. Nepal’s northern neighbor is accustomed to enduringly and firmly allure its neighbors. Today, China’s allurement is its economic capabilities. In the past history, China used its innovation, culture, and civilization as the means of alluring (Fig. 3.2). While neo-Kautiliyan foreign policy also aims for total victory like in the Chess by deploying all the capabilities, Wei Qi looks for relative advantage over the absolute victory by concurrently assessing the reinforcement capabilities of the adversaries. Soon after being elected as the Prime Minister of India, Narendra Modi executed the Kautiliyan policies of Saam (accomplishment through peaceful negotiations) Daam (accomplishment through money or financial allurement) Danda (accomplishment through penalty), Bhed (accomplishment by creating division) in a newfangled way while dealing with the South Asian neighbors. Modi’s address in Nepal’s parliament in 2014 and the way he had appeased the Nepali public was a tactic of Saam, while India’s aid and assistance provided to Kathmandu during the 2015 earthquake was an act of Daam; the way India imposed a blockade on Nepal for not paying heed to the concerns of New Delhi while promulgating its new constitution was a severe act of Danda, and lastly, India’s demand of two provinces in Terai of Nepal can be seen as an act of Bhed.

Intruding China, Defensive India India’s neo-Kautiliyan diplomacy has offered room for China to make its unprecedented presence in South Asia through Beijing’s policy of strategic encirclement, instead of entering into head-on clashes. China’s increasing aid and investment in the infrastructure and connectivity projects in India’s traditional sphere of influence signals the same. In 2018, issuing a report on Sino-Indian relations, India’s Parliament Standing Committee on External Affairs recommended the Modi government to be meticulous of China’s sensitivities and “not to continue with deferential foreign policy towards China” (Tharoor, 2019). China seemed to have designedly encircled India by forming ever-closer ties with the latter’s immediate neighbors. China has invested heavily in building ports

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Fig. 3.2 Statue of Manjushree on the southern outskirts of Kathmandu. According to legend, Manjushree was the first Chinese national to visit Nepal, when Kathmandu valley was a lake and not habitable. It was Manjushree, who cut the Chobhar hill to release the water from the snake-infested lake, and made Kathmandu inhabitable (From Author’s Archive)

in Sri Lanka. In 2014, alarm bells were set off in Delhi, when two Chinese submarines docked at Colombo, Sri Lanka’s main port and a major trans-shipment port for the exports arriving in India. More than the myths and realities attached with Hambantota port, Sri Lanka’s ragging debt crisis has already aroused controversy and debate on China’s “debttrap diplomacy” (Rajah, 2019). Norochcholai Power Station, Colombo International Container Terminals, Colombo Airport Expressway, and Moragahakanda project have been completed with China’s support in

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Sri Lanka. Despite Sri Lanka’s worst financial crisis and painful political turmoil, China values the island in the Indian Ocean as a low-cost transit—situated between Dubai and Singapore—for shipping and logistics (Roy-Chaudhury, 2019). Bangladesh, another of India’s neighbors, has also received Chinese investment for building mega infrastructure and connectivity projects (Jain, 2018; Rachman, 2016). Similarly, whenever China and Bhutan inch closer to resolving their disputed 470 km border, India often pay a close heed to China’s strategic considerations in the region. With the worsening of Sino-Bhutan relations, following the Chinese occupation of Tibet in 1951, Bhutan has always relied on India for its defense and security. Thus, India has left no stone unturned to prevent China from negotiating a territory exchange deal that would threaten India’s national security. For example, In 2012, when, for the first time, without India’s information, China and Bhutan entered into a discussion, on the sidelines of the Rio + 20 Conference in Brazil, over the possibility of establishing full diplomatic ties, it resulted in the withdrawal of India’s petroleum subsidies to the Himalayan kingdom on the eve of Bhutan’s 2012 general election (Sarki, 2019). In the June of 2017, the two Asian nuclear powers stood eyeball to eyeball over the Doklam plateau, where India had sent its troops to block China’s effort to build roads as the plateau is also claimed by Bhutan (O’ Donnell, 2018). When it comes to Nepal-India relations, Beijing is quite aware of the ups and downs that the bilateral relationship has witnessed because in all the lows, the China factor has been held responsible. Not only today. Even before 1955, when Nepal hadn’t established diplomatic relations with China, New Delhi made every efforts in limiting Nepal’s foreign policy engagements and diversifications, which proved to be self-destructive for India in the near future. Writing to Nepal’s Prime Minister M.P. Koirala, following the visit of Chinese premier Zhou Enlai to India, Indian Prime Minister Nehru stated in 1954 that although he was convinced of China’s desire to live in peace with neighboring countries, “Nepal shouldn’t encourage diplomatic relations with China” (Rao, 2021). But, China could easily perceive how Kathmandu had started to develop its diplomatic relations with Beijing only after India signed a treaty with China on the question of Tibet in 1954. It made China not only understand the role of Indian influence in the Nepali political spectrum but also offered Chinese Communist Party few ways to replace the traditional Indian influence with its own. Constructing a

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road linking Nepal’s capital with Lhasa was the first attempt as such. Because, in the absence of motorable roads connecting two countries China was always viewed as a “distant” neighbor (Rose, 1977) by the Nepali people in comparison to the open borders existing between Nepal and India. Beijing didn’t take much time to understand the Nepali psyche that sensed China not only as the “distant” neighbor, but also a great and powerful country, whose image Kathmandu could strategically utilize to reinforce its foreign policy priorities in the uncertain regional environment, where Nepal is obliged by its geography, to interact. Thus, communist China is aptly aware of its positive image in Kathmandu, brushing aside the threats that the Chinese empire posed to Nepal in the late eighteenth century. Actually, the role defined for Beijing, from the late eighteenth century to the middle of the nineteenth century, and again from 1955 onwards, by the decision-makers in Kathmandu, is that of a counterforce to India. Beijing saw the reflection of the same in the “equal friendship” policy directed by Nepal towards its two giant neighbors. Even though Beijing never had a role or influence, like India has variously, in the formation and evolution of Nepali society and culture; and also there was no proof of Sinicization having taken place in Nepal, Kathmandu realised the equal importance of both the neighbors, in a strategic sense. Even the Nepali democratic leaders, who have publicly displayed their hostilities to the communist movement have been doing this. For instance, it was a proIndian government in Kathmandu that joined China-led BRI in 2017. Interestingly, Beijing perceives Nepal’s policy of “equal relationship” as a means to neutralize Indian influence in Nepal, and it has been executing its foreign policy accordingly. For a Wei Qi player, China’s presence in Nepal aims to retrench the strategic capabilities of New Delhi in the Himalayan country, not through single-mindedness but with the help of strategic flexibility.

Tibet Factor in China’s Perception Kathmandu’s response to the annexation of Tibet by China in 1950 was characterized by ambiguity (Rose, 1977). Although the general perception in Kathmandu about China was that of a counterbalance to India, it was also perceived as a potential threat to Nepal. Because some Chinese communist leaders, including Mao Zedong, were making statements that included Nepal as the lost Chinese territory on the account of unequal

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treaties imposed on China by the colonial forces. Such statements raised a question among the power elites in Nepal: will Nepal have to face the same fate as that of Tibet? But, Kathmandu wasn’t in a position to react strongly against China’s takeover of Tibet in the same manner as it did over the annexation of Sikkim by India twenty-four years later, in 1974. Because, either it was during the Sino-Nepal war (1788–1792) or NepalTibet war (1854–1856), China was always an obstacle for Kathmandu to bring the roof of the world under its control. But, Chinese representative at Dalai Lama’s court in Lhasa or ‘Amban’ was always helpful in fulfilling certain Nepali interests. On the issues of trade disputes between Nepal and Tibet, Amban not only served as a mediator, but also took decisions in favor of the Nepali merchant community in Lhasa. Both Kathmandu and Peking had shared interest in Tibet, which was however very weak and feeble in resisting external pressure and maintaining the autonomy of its own. Kathmandu sensed both the opportunities and dangers of having communist China as an immediate neighbor. But, in those days, Nepal was accepting Indian advice and counsel on almost all the issues. As such, contacts with the Chinese were avoided as far as possible, at least until late 1952, when Sino-Indian relations showed some kind of improvement. Although they agreed to transform the Indian mission in Lhasa into a Consulate-General and Beijing was allowed to establish the office of a Consulate-General in Calcutta, New Delhi restricted Kathmandu from entering into any kind of direct relationship with China. New Delhi’s dictation to Kathmandu not only generated anti-Indian sentiments in Nepal, but also made Kathmandu realize the opportunity of having China as an immediate neighbor. It was only after China and India signed an agreement on Tibet in the middle of 1954, along with Panchsheela (Five Principles of Peaceful Co-existence) as a clause, Kathmandu received a green signal from New Delhi to establish diplomatic contacts with China. But, Prime Minister Tanka Prasad Acharya’s emphasis on “equal friendship” with India and China over the “special relations” with India, made New Delhi unhappy although there was nothing inauspicious about the formula of “equal friendship,” as long as Sino-Indian relations remained free from tensions. Although the BP Koirala government came to power in Kathmandu by gaining a victory in February 1959 elections, it didn’t comply with all of King Mahendra’s policies. At the same time, the new government was also not interested in restoring the principle of “special relationship” with India. They found it impractical, unacceptable, and

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harmful to Nepal’s national interest (Rose, 1977). But, new developments in Tibet in 1959 invited challenges to the newly formed government in Nepal. Maltreatment of Nepali traders in Lhasa, attack by Chinese military on an unarmed Nepali border patrol, and an unexpected claim by China on Mount Everest led to a severe crisis in Nepal-China bilateral relations. For the first time, anti-Chinese protests were organized in Nepal. Although the disagreements were diplomatically resolved, China was awaiting a favorable government in Nepal. Beijing’s wait was finally over with the resumption of King Mahendra’s direct rule by dismissing the Nepali Congress government in December 1960. As in other Asian countries, in Nepal too, Beijing found it easier to interact with authoritarian regimes than with democratic governments. Even in 2005, when Nepal’s monarchy was on its last legs, Beijing helped the royal regime fight the Maoist insurgents until the very end. But, India, which brokered Nepal’s peace process by facilitating an alliance (between mainstream opposition parties vehemently protesting against the monarch and the Maoist rebels waging war against the parliament and palace), had a covert objective to prevent Kathmandu’s tilt, which the royal palace was making towards China. After the communist takeover of China in 1949, the US found Tibetan resistance as leverage against international communism. Even though the US wanted Dalai Lama to go into exile in 1951 to either India or Sri Lanka as the symbol of Tibetan resistance against China—a communist regime, Dalai Lama preferred to negotiate with China by staying at home (Roberts& Roberts, 2009). Although Dalai Lama had accepted the 17point agreement affirming Beijing’s sovereignty over Tibet, the Tibetan spiritual leader was sending tribute missions to Nepal until 1953 as a way of asserting claims of independence. While the US President had ordered the CIA to kick start covert activities globally against communist regimes, by 1958, the CIA had started operations to offer support to Tibetan resistance. Besides training Tibetans in Colorado about Guerrilla warfare techniques, and parachuting them into Tibet from the airbase in East Pakistan, the CIA also assisted them with airdrops of arms and equipment that they were trained to use (Riedel, 2016). But in the March of 1959, when Beijing viciously suppressed a large-scale uprising in Lhasa, Dalai Lama was left with no other option than to flee to India. Although the Communist Party of Nepal not only supported China’s action in Tibet and doubted Tibetan resistance as “engineered by a handful of Tibetan reactionaries with the aid of imperialists,” (Ramakant, 1976) the

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Nepali Congress, which had its origin in Indian exile during anti-Rana campaign, perceived Chinese action in Tibet as “19th-century imperialist tradition.” Prime Minister B.P Koirala, who was also the leader of the Nepali Congress, expressed his intolerance over Nepal being used as a base for military operations against its northern neighbor (Grunfeld, 1996) and repaired the ties with China by allowing the latter to open its embassy in Kathmandu in 1960 (Fig. 3.3). Arming Tibetans on Nepal’s northern border had also upset India as it could provoke China to send its troops into Nepal (Cowan, 2014). Overflying Indian territory sans permission from New Delhi, from 1957 to 1961, the CIA had delivered more than 250 tons of “equipment, arms ammunition, radio, medical supplies, and other military gear” (Knaus, 1999). As the Chinese forces had eliminated thirty-seven CIA trained operatives out of forty-nine by the early 1961 and the People’s Liberation Army was winning the battle, the CIA changed its focal point of operation from dropping equipment inside Tibet to Mustang, an isolated mountainous area in Nepal bordering China (Riedel, 2016). Because hundreds of resistance fighters had entered into Mustang in late 1960 to escape the Chinese oppression in their homeland. In the April of 1961, as per the decision of the Kennedy administration, the CIA started dropping 2900 pounds of equipment consisting of arms and ammunition for 400 Tibetan insurgents in Mustang, where Nepal’s central government control was weak. But, after Pakistani President Ayub Khan cut off the use of the airbase in East Pakistan, upon his anger over the Kennedy administration’s overtures to India, the whole operation was jeopardized (Office of the Historian, 1996). Beijing saw the great power politics in the Himalayan region as a threat to its “One China Policy” and since then has been appeasing the small countries in its neighborhood, including Nepal, with aids and investment projects. In the present context too, China ensures its control “for governing Tibet” and its culture through the selection of the next Dalai Lama and sinicizing Tibetan Buddhism, as directed by China’s 2021 White Paper (The State Council, 2021). But, China is already riled by the probable alignment of the US and India on Tibet. The US, in December 2020, passed a Tibetan Policy and Support Act stating that succession of Dalai Lama is a religious matter that needs to be decided by the Tibetan Community and aging Dalai Lama himself. Nepal, too, has banned the celebrations of the Dalai Lama’s birthday. It’s not only because of the increasing presence of China in Nepal but more because of the manner that Nepali leaders have displayed in favor of

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Fig. 3.3 King Mahendra (wearing black goggles) with Prime Minister B. P. Koirala. While King Mahendra diversified Nepal’s foreign relations and introduced Nepal to the major multilateral forums, Koirala’s role in the democratic movement of Nepal is undeniable (Photo Courtesy: Nepali Times)

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gaining goodwill from Beijing. It has impacted Nepal’s claim to neutrality. Nepal’s government only recognizes those Tibetans crossing borders before 1989 as refugees. Those coming after 1989 are considered illegal immigrants. As such, Nepal has come up with policies that don’t identify them as refugees, rather citizens of China’s Tibetan Autonomous Region (TAR), illegally entering Nepal. Tibetan refugees crossing borders into Nepal significantly decreased after 2008, as China heightened its border security after the Beijing Olympics. Nepal, today, claims that despite not being a party to the refugee convention, it is hosting a larger number of Tibetan and Bhutanese refugees on humanitarian grounds, and as Nepal is committed to One-China policy and recognizes Tibet as an integral part of China, its foreign policy prohibits any kinds of anti-China activities and protests against China from the Nepali soil. Nepal thwarted the 84th birthday celebrations of Dalai Lama on July 6, 2019, that was scheduled to take place at Mustang Samaj Monastery in Swayambhu of Kathmandu. Although the Kathmandu-based Tibetan Refugee Welfare Office had assured the District Administration Office in Kathmandu that the celebrations will embrace no anti-China activities, the request was rejected, which made the refugee communities upset. The celebrations were not planned with the political motive but along the larger religious belief of the Tibetan communities. Most possibly, invitations sent to the ambassadors of the US, the UK, Japan, to attend the celebrations made it appear more objectionable to the Nepal government. Western press and human rights activists identify such restrictions imposed by the Nepali state as the violations of Article 18 (1) and 19(2) of International Covenants on Civil and Political Rights (ICCPR), and the “principle of nonrefoulement,” as included in Article 33 of 1951 Refugee Convention. ICCPR mandates states to respect the rights of an individual or community to exercise freedom of opinion and expression in any medium and form. Even though Nepal is a non-party to the convention, the “principle of non-refoulement,”as part of customary international law, obliges Nepal not to deport or return (refouler) a refugee in any manner that endangers his/her life, rights, and freedom. Nepal’s constitution has also expressed the commitment of the Nepali state to protect and promote the universally accepted human rights norms. The same commitment was visible in the 1970s too, when the Nepali state decided to issue citizenship to the Tibetans, so that they could improve their livelihood by owning carpet industries. But, with the securitization of Beijing’s foreign policy towards Kathmandu, and as

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China get alarmed by the anti-Chinese activities of Tibetan diaspora in different parts of the world, a small country Nepal, situated between two big powerful states, finds it hard to neglect the bilateral relations with northern neighbor. Being committed to the “One China Policy,” however shouldn’t signal that Nepal has sacrificed its foundational beliefs in world peace and regional harmony, which have also found place in the fundamental objectives of Nepal’s foreign policy. Still, a diplomatic balance is prerequisite in dealing with major international powers, donor countries, human rights regimes, multilateral entities, and financial institutions. But, Nepal often misses to keep such balance skillfully. Recently, on May 20, 2022, Nepal’s Foreign Ministry stated during a press briefing that the government was unaware of meetings between visiting US Under Secretary Uzra Zeya (also a special coordinator for Tibetan issues for the Joe Biden administration) and Kathmandu-based Tibetan refugee leaders. While Nepal has shown extra care to address China’s concerns over Tibetan refugees, the US and some Western countries have been pressurizing Nepal to provide refugee cards to Tibetans. Tibet plays a central role in Nepal-China and China-Nepal-India relations, and it has impacted Nepal’s claims to Neutrality too. Despite having a historical affinity with Tibet, Kathmandu is not in a position to develop its free and autonomous opinion over Tibet and Tibetans, because Nepal perceives China as a counterforce to Indian influence. Most interestingly, China is quite aware of Kathmandu’s predicament. It is the geostrategic perception of Beijing. On the other hand, Beijing also perceives NepalIndia relations in a geo-economic way as China aims to restore the old trade route from India to Tibet via Kathmandu with the trans-Himalayan highways and railways. But, without India on board, such an arrangement is not likely. The materialization of trans-Himalayan railways from China’s borders to South Asia via Kathmandu will erode the Indian sphere of influence. Comprehending the same, New Delhi hasn’t joined BRI. But, the small, poor, and landlocked Nepal is convinced that the connectivity and infrastructure projects under BRI will radically reduce its dependence on India. Notably, as Beijing remains aware of the psychology of the small countries in South Asia, the former keeps on luring the latter with aid and investments. Nepal’s recent initiatives to diversify her trade, along with new rail projects are not only the result of increasing discomfort with India, but reveals to us Nepal’s coping strategy in responding to China’s rise. Because, whether the rise of China comes as an opportunity for the South Asian region or as a threat to their sovereignty and

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territorial integrity? The answer lies in the future’s womb, as China is not pursuing this relationship out of charity.

Coping with China’s Rise As South Asian small states are coping with the rise of China variously, Nepal has strategized its China’s policy by joining Xi Jinping’s flagship BRI program to reap benefits from the infrastructure and connectivity projects. As China “aspires to be a great, modern, socialist country,” by the middle of the twenty-first century, landlocked Nepal yearns to get benefitted from the spectacular development in the neighborhood, by paying less heed to the likely challenges that the BRI projects may generate in near future. Harboring suspicion and distrust over Beijing’s ambitious project, Washington has cautioned Kathmandu on not getting lured by the “debt trap” (Panday, 2018). Such an admonition is obvious, while BRI projects are drawing global and regional denunciations owing to China’s “debt trap diplomacy.” But, Beijing has been instantly refuting such charges as mere rumors, and a ploy to contain the rise of China (Jones & Hameiri, 2020). China’s interest and ambition to get connected with South Asian markets through the trans-Himalayan railways is not a fresh idea however. Because the very idea of connecting Nepal’s capital, Kathmandu, with Lhasa in Tibet goes back to the 1973 meeting between Nepal’s king Birendra and Mao Zedong. But it couldn’t be materialized during the Cold War, when Nepal was receiving aids and investments from different quarters, including superpowers and major power. But, after the political change of 2006 and abolition of monarchy in Nepal, the idea of connecting Kathmandu with Lhasa fleetingly resurfaced. Still, it was only after the 2015 blockade on Nepal, the trans-Himalayan railway got the impetus, when Kathmandu was looking for ways to diversify its trade and transit routes. Although the feasibility study for the transHimalayan railway from China’s borders to Kathmandu, and then to Pokhara and Lumbini (two major tourist destinations in western Nepal) was completed in 2018, no considerable progress has been achieved since then, not only because of the COVID-19 pandemic (Mouritz, 2020) but also because of the political uncertainty in Kathmandu compounded by the changing dynamics in regional geopolitics. China has also fabricated appealing discourses bolstering its entry in South Asia. The idea of “land-linked” Nepal is indigenously not a Nepali attempt to break away from the established identity of a landlocked

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country. Rather, identifying Nepal as a land-linked state between India and China favors China’s South Asian ambition. It is the matter of another debate, whether Nepal’s access to the ports in India and China alters its existing landlocked status or not. But the extension of Sichuan-Tibet railways to Kathmandu through Lhasa and Shigatse, once materialized, helps China to get connected with South Asia (Sharma, 2019). Still, to materialize the railway project, Beijing’s sole endeavors and willingness are not sufficient. Because, the modality of funding the proposed transHimalayan railway is still uncertain and the political fiasco in Nepal over the U.S.-sponsored MCC project (which is being perceived as hostile to BRI) has further delayed China’s ambition. Thus, it is understandable that China’s trans-Himalayan railways face economic, geopolitical, political, and environmental challenges. Previously, the railway was planned to reach Nepal’s borders by 2020. Now, Beijing is yet to extend its railway to the Nepali side. Until then, the construction of the railway line in Nepal is delayed. Although Nepal has asked China to fund the Detailed Project Report (DPR) of Kathmandu-Kerung railways amounting to Rs. 35 billion, Beijing has made more pledges and promises than real endeavors. On December 8, 2021, Chinese Foreign Minister Wang Yi was heard reiterating that Beijing will make visible progress in the feasibility study of cross-border railway project (Shrestha, 2021). Since the National Railway Authority of China handed over the pre-feasibility study report in 2018 that was conducted in grant, not much has progressed. Because only after finalizing the DPR, the funding modality for the railway project could be ascertained. Although the COVID-19 pandemic further procrastinated the study of the trans-Himalayan railway, China has started to conduct the study on the Chinese side of the borders, particularly from Shigatse to Nepal. But no such studies have been conducted, so far, on the Nepali side (The Rising Nepal, 2020). Regarding the funding modality of the project, Kathmandu has already claimed that the BRI railways cannot be constructed without the Chinese grant. Forging an unanimous understanding among the major political players of Nepal, although Kathmandu looks forward to escaping the fate of Sri Lanka and the Maldives facing the debt trap, Nepal hasn’t paid any attention to the possibility of erosion in state sovereignty while embracing BRI connectivity projects. Former Foreign Minister Pradeep Gyawali believed that Nepal “cannot invest Rs. 300 billion on a single project. Thus, Nepal has asked China to build this project on grants”

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(Setopati, 2018). While Nepali leaders have been unilaterally proposing grants from China to materialize the project, Beijing has maintained a mysterious silence. In the second Belt and Road Forum for International Cooperation held in Beijing in April of 2019, no discussion was initiated on the funding modality. As such, China’s ambition, and interest to get connected with South Asia remained uncertain. With the outbreak of the COVID-19 pandemic and its impact on the Chinese economy, BRI projects in different corners of the world faced uncertainty (Mouritz, 2020) including the trans-Himalayan railway (Shrestha, 2021). In addition to the financial challenges delaying China’s interest to get connected with South Asia through railways, the political challenges are also interesting to mull over. Politically, Nepal is an infant Republic situated between the largest democracy and communist China. With the promulgation of a new constitution in 2015, Nepal was expected to come out of the protracted transitional period, into which the Himalayan country lurked and lingered for a long time. But, the political debacle following the intraparty rift inside the ruling communist party and subsequent dissolution of the parliament sensationalized Nepal’s political environment, sending ripples to the neighboring countries as well. While Nepal aims to draw benefits from the multidimensional connectivity network, including roadways, railways, waterways, airways, optical fibers, petroleum and gas pipelines, and electricity transmission lines with the neighboring countries (IFA, 2021) its two immediate neighbors, India and China, also have their own strategic interests and economic concerns in Nepal. History is evident to the fact that their interests and concerns have always been impacted whenever Nepal has undergone a political transition. Today, China’s BRI projects, including the trans-Himalayan railway, are bearing the brunt of the political uncertainties in Kathmandu. Although Nepal inked a trade and transit agreement with China in the context of India’s blockade on Nepal in 2015, China’s long-standing desire of building railways through Nepal gained some momentum only after Kathmandu officially joined BRI in 2017. In addition to China’s pre-feasibility study report of KathmanduKerung railway in 2018, the statement made by the Chinese President Xi during his 2019 visit to Nepal on how the trans-Himalayan railway helps Kathmandu to become a land-linked country, divulges Beijing’s interest in materializing the railways as soon as possible. The establishment of fraternal ties between the Communist Party of China and the

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Communist Party of Nepal was the outcome of former Prime Minister of Nepal K. P. Oli’s much-hyped friendship with China in the post2015 Indian blockade. But, following persistent struggle inside his own party, and not to let his grip on the party and national politics become weaker, he apparently shifted towards the South. His shift was interpreted as inviting “foreign interference” in a joint statement issued by the five former prime ministers of Nepal. While India hasn’t joined Belt and Road Initiatives (BRI) and has been constantly displeased by Nepal’s entry into China’s flagship project, China’s South Asia ambition may have to endure the numerous political challenges, impacting the process of policy coordination between the two countries. Beijing astutely responded to Oli’s increasing rapprochement with India by not sending invitations for the 2021 conference of the Boao Forum for Asia, of which Nepal is a founding member. It indicates China’s displeasure at the new political development in Nepal. Beijing was the architect of the 2018 merger between Nepal’s two largest communist parties, i.e., CPN-UML and the Maoist center to form the united communist party of Nepal. The Nepal Communist Party also organized a symposium discussing Xi Jinping thought in Kathmandu in September 2019. The political proximity not only made the visit of Chinese President Xi Jinping to Nepal possible, but also multiplied the opportunities for effectively implementing the BRI projects in Nepal, and above all, the much-awaited trans-Himalayan railway. But, things started to move in an opposite direction as soon as the rift in the Nepal Communist Party heightened. Beijing used all its instruments, including the perceptible parleys by Chinese Ambassador Hou Yanqi to keep the party intact. Yanqi’s involvement was however perceived by many as a significant departure from China’s conventional policy of non-interference in Nepal’s internal politics. But, the rift inside the Communist Party of Nepal reached a tipping point, when Oli’s move to dissolve parliament stunned Beijing. After the split of the Communist Party of Nepal, Oli started improving his relations with New Delhi, which has however become an annoyance to Beijing and its South Asia ambition. Besides, the perception of western industrialized countries of BRI as an expansionist project of China has not only sent a negative message about the infrastructure and connectivity projects, but has equally disseminated the narrative of “sovereignty erosion,” that may exacerbate the political challenges in the countries implementing the BRI projects, including Nepal and its South Asian neighbors, where China is viewed

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more as a geopolitical competitor to India. Regarding the environmental and geo-engineering challenges, the pre-feasibility report submitted by China in 2018 identified weather, topography, tectonics, hydrology, and cost as the core challenges to the construction of trans-Himalayan railways connecting China’s TAR with Kathmandu. As the railway has to pass through sharp Himalayan mountains, it requires multifarious structural engineering. Above all, seismic activities pose a grave challenge to geo-engineering impacting slope stability. Because, the proposed railway runs through a geological fault line, where the Eurasian plate meets Indian plate for the formation of the Himalayas. The geological problems including landslides, rockfall, avalanches, debris flows may further delay the construction process. As the railway passes through Nepal’s two national parks, Shivapuri and Langtang, serious concerns over the biodiversity and environmental issues are being raised. While Nepal aims to achieve net-zero emission by 2050, and Beijing’s infrastructure projects are being severely criticized globally for their environmental impacts, both countries are yet to find an amicable solution to address the environmental challenges faced by China’s South Asia drive. Beijing has already admitted that the construction is going to be arduous and complex owing to the geo-engineering intricacies. Thus, for an effective materialization of the railways through the earthquakeprone Himalayan range, scientific attitude and technological responses are prerequisite. The pre-feasibility report submitted by the Chinese Railway Administration to the Ministry of Physical Infrastructures and Transport Management of Nepal underlines the similar realization in geoengineering to address the topographic difficulties, geological complexities, and seismicity. In a press conference in May 2019, Hou Yanqi, the Chinese Ambassador to Nepal emphasized innovative and scientific approaches to the construction of a railway through the extremely inhospitable steep terrain descending from 4,000 m in Tibet to 1,400 m in Kathmandu in tunnels and bridges. In the process of mitigating the risks invited by the environmental and geological challenges, the project’s cost is expected to surge up in an unexpected manner, delaying China’s ambition to get connected with the South Asian regions with the materialization of trans-Himalayan railways. Among all the challenges procrastinating China’s ambition to get connected with South Asian market, geopolitical impediments top the list. Because of the changing dynamics of international and regional politics compounded by China’s increasing influence globally and its aggressive

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entry into India’s traditional sphere of influence, plus the strategic implications of the BRI connectivity projects, geopolitically, impede the transHimalayan connectivity network. State’s geographical location is one of the key determinants of national power capabilities (Agnew, 2003) and shapes the geopolitical view of the country (Tauthail & Agnew, 1992). Scholars frequently use the term “geopolitics” to explain the geographical situation of the country and its strategic significance (Tauthail & Agnew, 1992) and the influence of geography on international relations (Wagner, 2016). The geopolitical variables have evolved with the transformation in global and regional politics (Sempa, 2003). Conventional underpinnings attached with geopolitics concentrate on the geographical and historical circumstances of the state affecting the behavior of a country (Sempa, 2003). However, new variables gradually emerged with world wars and the Cold War in the twentieth century (Sempa, 2011). With reshuffling of variables scholars started perceiving geopolitics as a “struggle” between the two states, alliances, or ideological components for maintaining international and regional influence (Sempa, 2003). Blending the modern substratum of geopolitics with its traditional roots, BRI projects transport the strategic ambition of the Chinese Communist Party to govern the world through connectivity projects in the geographical regions stretching from east to west (Sempa, 2019). Today, while China has extended its clout to the different corners of the world through economic investment (Kaplan, 2020), it is important to understand the geopolitical significance of BRI projects. As the geographical space is being largely occupied by economics, technology, and interdependence along with nationalism and populism (Kaplan, 2020), the change in the geographical imaginaries is interesting to ponder over (Clarke et al., 2020). The objective of military advancement pursued by the states has increased the extent of geopolitical risk associated with heightened reach of the state beyond the conventional idea of territoriality (Bolton, 2013). Still, not only the availability and accessibility to submarines, warships, fighter jets, ballistic missiles, and cyber warfare capabilities determine the geopolitical dominance of a state, but equally important are the economic power, industrial capacity and technological supremacy (Cohen, 2009). Therefore, in this light, geopolitical vulnerabilitiess are not only restricted to geography and history but have also shifted to the realm of technology, military, globalised trade and economy (Cohen, 2009). As such, China’s BRI retains the possibility of increasing geopolitical competition or struggle between the states in different forms (Kaplan, 2020).

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China’s BRI has already aggravated the geopolitical tensions (Chakma, 2019) at the bilateral, multilateral, regional and international fronts. Because, Beijing’s increasing influence in the global South has changed the way resources are commodified and the manner connectivity infrastructures are funded and built. China’s reinvigoration of the ancient Silk Road, along with new roads and routes in the geopolitically important regions has generated new security concerns (Asif & Ling, 2018; Chakma, 2019) along with alarming geopolitical risks to the host countries in Asia, Africa, and Latin America (Cui & Song, 2018). While the strategic competition between China and the US (spurred by trade and technological conflict) is underway (Baruah, 2020; Cui & Song, 2018; Kaplan, 2020), BRI may further expand the sites of contestations (Baruah, 2020). After all, China’s economic rise has hoisted the strategic concerns of the US in different parts of the world (Wagner, 2016). Despite China’s justifications citing economic parameters of BRI, the strategic component of the BRI projects manifested by the emerging issues of “debt trap” and “erosion of sovereignty” reveals the changing geopolitics in different regions of the world (Zhexin, 2018). The European powers like France and Germany are vexed by the increasing investment of China through BRI in the Eastern European countries (Zhexin, 2018). In South Asia, India has vocally opposed BRI projects (Baruah, 2020). As the fastest growing economy in the world, India has conventionally dominated the subcontinent (Wang & Liu, 2019) by influencing the politics and economy of the small states in South Asia (Baruah, 2020). But, the onset of China-led BRI projects in the small countries of the region has vexed New Delhi in an unprecedented manner. The China-Pakistan Economic Corridor running through the disputed region of the Jammu and Kashmir between India and Pakistan has renewed the age-old geopolitical disputes between India and China and India and Pakistan (Tharoor, 2019). Increasing Chinese investments in the countries including Sri Lanka and the Maldives, which are near to Indian shore, have increased the probability of geopolitical disputes in the Indian Ocean (Bajpee, 2017). The Bangladesh-China-Myanmar Economic Corridor, which was formerly supposed to include India, has further aggravated the geopolitical tensions (Bajpee, 2017). In the South Asian region, Nepal’s geographical location is strategically advantageous, while geopolitically vulnerable. Nepal’s strategic location has impeded the harmonization of its external relations (Khadka, 1992). While Nepal’s geography determines its foreign policy behavior, its geopolitical reality

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has been metaphorically described by using various metaphors, including yam, buffer, bridge (Khadga & Bhattarai, 2018). As Nepal’s geopolitical location has been variously highlighted in different periods of time, all these metaphors imply Nepal’s difficulty in effectively coping with the Gulliverian neighborhood. With the unification of Nepal in the eighteenth century, Prithivi Narayan Shah identified Nepal as a “yam” between two boulders (Stiller, 1968). Throughout the period of colonialism in South Asia, Nepal was perceived as the buffer between China and British India. While the concept of buffer became more outdated with the end of the Cold War and in the period of globalization, Nepal looked for ways to draw benefits from the economic miracle in the immediate neighborhood. Bridge discourse, which discloses Nepal’s ambition to “bridge” India and China economically, is the upshot of the same realization in Nepal’s worldview. But, Nepal’s entry into China’s BRI is not only driven by Nepal’s aspiration to get benefitted from the specular development in the neighborhood, but more because of its need to cope with the rise of China. As such, the infant Republic is also faced with the geopolitical difficulty to balance Indian interest in Nepal. While increasing Chinese influence in Nepal has already riled India, the bilateral relations between India and China have also deteriorated after the 2020 Galwan crisis. Therefore, such a clash of interests in Nepal pulls the Himalayan geopolitics into a different arena. Hence, it is evident that the BRI projects in Nepal, particularly the trans-Himalayan railways invite serious geopolitical challenges. Notably, Nepal’s geopolitical space is participated not only by its immediate neighbors, but extra-regional actors do take part. Thus, China’s trans-Himalayan railway creates difficulty for Nepal in accommodating the interest of major powers. Rather it triggers geopolitical tension as western powers have taken India into confidence to contain the rise of China specifically through the US-led Indo-Pacific Strategy and QUAD comprising of Australia, India, Japan, and the USA. Equally, as India’s Act East Policy and Modi’s strategic vision of Security and Growth for All in the Region (SAGAR) reveals New Delhi’s foreign policy reorientations towards realizing its global power ambitions, China’s transHimalayan ambition has triggered security concerns for India, which has conventionally perceived the Himalayas as its defense frontiers. As 2015 Indian blockade on Nepal pushed Kathmandu closer to Beijing seeking alternatives to the available transits from India, and while other South Asian small countries are being lured by China-led BRI projects, South

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Asian geopolitics is being gradually transformed. Consequently, for Nepal, managing the conflicting interests of the neighbors is getting growingly complex owing to increasing geopolitical intricacies and strategic competition between them. Trans-Himalayan Multidimensional Connectivity Network is one of them as China aims to get connected with South Asia through the railways, while India doesn’t want to compromise its traditional sphere of influence. India’s resistance to BRI and its vocal opposition puts the railway project under geopolitical scrutiny (Baruah, 2020). While India’s colossal abhorrence of China-Pakistan Economic Corridor (CPEC) made New Delhi more reluctant towards BRI projects (Bolton, 2013), the Bangladesh-China-Myanmar Economic Corridor and the Twenty First Century Maritime Silk Road in the Indian Ocean posed challenges to India’s maritime interests and interactions, positioning Indian ocean as the site of great power competition (Chakma, 2019). While the BRI projects in the region have made a new passage for China to enter South Asia (Cui & Song, 2018), the connectivity projects do not only influence maritime South Asia but also generate implications for continental South Asia (Chun, 2017). Thus, the BRI connectivity projects have triggered less cooperation but more struggle and competition between India and China (Baruah, 2020). Trans-Himalayan railways may offer Nepal ways to gradually escape Indian sphere of influence. But, India is strictly concerned about shielding its economic nationalism, as the open and porous borderlands existing between Nepal and India may ease the flow of Chinese goods and products into India (Bajpee, 2017) once the tran-Himalayan railway is materialised (Fig. 3.4). China’s ambition to ferry its surplus economic capital to the markets of South Asian small states has posed political, economic, and security concerns for India in an unprecedented manner (Bajpee, 2017). Thus, India’s resistance to BRI and its aversion to any projects of connectivity in its close neighborhood can be understood clearly (Asif & Ling, 2018). Because, India has been very sensitive towards its neighbors and against any activities in the neighborhood, especially by China (Zhexin, 2018). India was also not attracted by the “Two Plus One” modality proposed by China, to deal with the South Asian issues through collaboration between the two Asian giants. The proposed Kathmandu-Rasuwagadhi railway is not free from the impacts of global geopolitical contestation between China and the US. While the US intends to contain China’s rise variously, the US-sponsored

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Fig. 3.4 A man sweeps “No Man’s Land” between Nepal and India at the Sunauli border point in an early morning of February 2019 (From Author’s Archive)

Millennium Challenge Corporation (MCC) grant to Nepal, whose parliamentary ratification was delayed for a long time amidst Nepal’s political uncertainty, is perceived in Kathmandu as a counterforce to China-led BRI projects. Needless to say, the increasing presence of China in Nepal proliferates the major power contestation, which is aptly visible in China’s South Asia ambition through trans-Himalayan railways. India’s participation in the security dialogue-QUAD led by the US positions Nepali geopolitics in a crucial zone (Islam & Faroque, 2020). The alliance on containing China through QUAD has appropriate matters of forewarning Nepal as China-led connectivity networks could eventually turn Nepal into a focal point for QUAD members in containing Beijing’s clout. As the Kathmandu-Rasuwagadhi railway invites the collective concern of the QUAD members towards Nepal, it is important to calculate the geopolitical risk involved with the construction of the trans-Himalayan connectivity network. Already, the 2 + 2 dialogue between India and USA outlining the defense ties and strategic partnership between the two countries, aimed at restricting China’s activities in the Indian ocean and

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Indo-Pacific region, has increased geopolitical challenges for the small countries like Nepal (Parpiani, 2021), which has friendly relations with all the QUAD members and China. Although Beijing’s South Asia ambition through trans-Himalayan railways may be delayed, it has already set off alarm bells in New Delhi, and in this context, small states located between them strategize their behavior variously. Kathmandu, at present, has adopted a hedging strategy to maximize opportunities from the rise of China. Hedging is simply understood as the process of adjusting the policy behavior to cope with the changing circumstances. Often exploited by the countries responding to the rising powers, strategic hedging necessitated exercising the policies of engagement and balancing. Geopolitically, the Nepali state is fated to balance its relations with both the neighbors, India and China. Along with the geographical proximity, their spectacular rise has concurrently attracted the Nepali state to engage with both of them. The rise of China has further demanded new episodes of engagements and series of acts of balancing. Today, with its entry into China-led BRI, Kathmandu aims to counterbalance Indian influence in Nepal and is concomitantly engaging China. With hedging, Nepal intends to further diversify its political, economic, and security relations to eventually achieve the “mutual neutralization of major powers” (Subba, 2021). By struggling to accommodate the interests of major powers, Kathmandu is also reaping the benefits of rivalry among them by chasing multiple options to deal with the situation of unpredictability and uncertainty (Kuik, 2008). Nepal has been successful in using her strategic position to lure aids and investments, and grants and assistances from the major powers in the neighborhood and beyond. Most importantly, strategic hedging allows Nepal to finetune its relations with major powers, at times accepting their domination, and from time to time resisting and rejecting it, and during several other occasions, retaining neutrality (Efremova, 2019). Thus, demanding absolute neutrality from Nepal is close to impossible as Kathmandu struggles to widen her strategic space by overstepping the structural constraints imposed by her geography. China, however, is quite aware of Nepal’s strategy from the time of Qing Empire, which witnessed the unification campaign of Nepal in the middle of the eighteenth century under the leadership of King Prithivi Narayan Shah. Today’s Xi’s China has also perceived that the lack of strength, which characterizes a weak state (Handel, 1990) has preoccupied Nepal with the question of survival. But, Prithivi Naryan Shah had fulfilled his long-term

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strategic vision by quickly understanding the significance of balancing for country like Nepal inherent with strategic geography. Comprehending the limit of the infant state, he was careful in not provoking the two powerful neighbors, the expanding East India Company on its south and powerful Qing Empire on the north. However, imperial China perceived his second son, Bahadur Shah’s move as a challenge to China’s control over Tibet, which today, is a major component of Beijing’s frontier defense arrangement (Garver, 2001). While China conceived a “compliant, divided periphery” (Kissinger, 2012) as a prerequisite for its security, Beijing was concerned by the rise of an assertive young state along its perimeter, when the Nepali army invaded Tibet in 1788 under the leadership of Bahadur Shah. In the same manner, Nepal’s strategic location, “directly to the north of Bengal, the heart of British administration in India, had long disquieted Calcutta” (Rose, 1971). As Nepal had understood China’s sensibilities over Tibet and East India Company’s interest to draw profit from the trans-Himalayan trade, Kathmandu manifested prototypical balancing by inclining towards the north or south as per its security needs. For instance, when an invasion from British East India Company was impending in 1814, a letter was dispatched to the Amban, representative of China’s emperor in Tibet, requesting financial aid from Peking (Rose, 1971). Similarly, in 1792, when the invading Chinese army was entering Nepal, Nepal requested to East India Company for “ten guns together with ammunition and ten young Europeans versed in the management of artillery (Rose, 1971).” Although Nepal’s acts of balancing on both occasions didn’t yield the desired outcomes, balancing behavior wasn’t a total failure too, as it served as a deterrent constraining wider British interest over Nepal. For example, Lord Hastings dropped his plan to dismember Nepal fearing Chinese antagonism (Pemble, 2009). Balancing is Nepal’s historical consciousness because of its strategic geography. In the present context too, Republican Nepal embraces acts of balancing, particularly to cope with the rise of China. In 2015, when India imposed a blockade on Nepal, the landlocked country under the communist leadership of K P Oli instantly looked up to China and got access to Tianjin port. Six years later, when Oli saw China’s inability to keep his party and government intact, he perceptively sided with India. Also, to prevent excessive dependence on China, Oli sought the support of the major political parties in Nepal to ratify the Millennium Challenge Corporation Compact in the Nepali Parliament, under which Nepal would

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receive a 500 million US dollar infrastructure grant from the US. But, Oli couldn’t ratify it because of the political fiasco that toppled his government. After Oli stepped down, Deuba administration ratified it from the parliament enduring all forms of oppositions. While it wasn’t the first time Kathmandu desired to engage with the major powers, Nepal “wouldn’t get too dependent or too distant with any of them” (Subba, 2021). Time will tell whether Beijing perceived Oli’s act of counterbalance as a new tactic to the old strategy, or not. Although China perceives the ties between Nepal and India as civilizational, old, and ancient, Beijing is also aware of the presence of asymmetry in the ties, which Kathmandu often distastes. Thus, China awaits the opportunity to exploit Nepal’s aversion towards India in its favor, which is however reckoned by power elites in Kathmandu as their balancing strategy. While New Delhi perceives Kathmandu’s balancing behavior as erosion in “special” relations between the two countries, the liberal democracies in the West view Kathmandu’s balancing act as a coping strategy in the context of the rise of China. Also, Nepal’s proposal to economically bridge China and India echoes Kathmandu’s coping strategy. After the political change of 2006, Nepal expressed its interest in bridging its two immediate neighbors with an objective to get benefitted from the spectacular economic development in the neighborhood. As Beijing found Kathmandu’s proposal favorable to its South Asia ambition, it took it positively while New Delhi doubted the proposal by smelling Chinese interest over it. After Nepal officially joined BRI in 2017, China not only readjusted the proposal but also started identifying Nepal as a strategic gateway to enter South Asia (Tao, 2017). The 2019 Nepal visit by the Chinese President Xi Jinping, which was the first of its kind in more than two decades, also signaled China’s growing presence in South Asia “as a strategic hub for defense and transit projects” (Sharma & Schultz, 2019). During his visit, both sides agreed to effectively implement the trans-Himalayan multidimensional connectivity projects under BRI, which renewed the “geography hypothesis” that Nepal could be a viaduct between China and India. But Nepal remains deprived of the required institution and infrastructure to materialize such arrangement. Although the awe-inspiring economic performance of India and China has offered hope of spillover effects to many Nepalis, affluent Chinese provinces and prosperous Indian states are far away from Nepal’s borders, which means the rise of India and China is still away from Nepal (Bhattarai, 2016). While the Himalayan

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country borders Tibet Autonomous Region (TAR) of China on its north, Nepal shares open borders with the underdeveloped Indian states of Bihar, Uttar Pradesh (UP), West Bengal, Sikkim, and Uttarakhand on its south, east, and west. Located in the highest elevation, having the craggy and rocky topography of Tibet as borders, indicate the geographical impediments against the free flow of trade and transportation. In the absence of feasible transportation network, better roads and railways linking Nepal and China, trade by land between the two countries has already suffered, as indicated by the drawback that Nepal faced while attempting to ferry goods from the Chinese ports via Tibet in the wake of Indian blockade on Nepal. As argued by historian John Whelpton, Nepal’s asymmetrical dependence on its southern neighbor can be drastically cut through “further economic development in Tibet and by restoring the old trade route from India to Tibet via Kathmandu.” But such arrangements cannot be effectively and practically materialized without having China and India on board. In the same manner, Indian states bordering Nepal have lagged far behind in regards to socio-economic progress, infrastructural development, and human security. Although the UP has given several prime ministers to India, the fourth largest state of India stands at the top in the case of communal violence, corruption, high crime rate, and castebased violence. Thus, the political influence of the most populous state of India has been outstripped by its worst performance in the human development index (Bhattarai, 2016). Bihar shares the same fate as of the UP. Widespread poverty, caste-based violence, and corruption have impeded its socio-economic progress. Nepal shares strong socio-cultural and linguistic ties with all the Indian states adjoining Nepal’s borders. Madhesi communities residing in the Southern plains of Nepal have kinship ties with the bordering Indian cities. When the Madhesh-based Nepali leaders had approached former Indian minister Lalu Prasad Yadav at the latter’s own residence in Bihar on the backdrop of Madhesi agitation against Nepal’s new constitution, it was perceived by the power elites in Kathmandu as an attack on Nepal’s sovereignty. While Nepal’s open borders with India are geographically feasible in comparison to the rugged terrain of Tibet, the political and geopolitical complexities with India trigged by the border disputes and Nepal’s increasing proximity with China still precludes the possibility of being a viaduct between China and India. Thus, any attempts to ease the political and geopolitical intricacies with New Delhi through diplomacy and dialogue and geographical

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difficulties with China through connectivity projects could be only a preliminary effort. So far, neither there have been any attempts at the political level to materialize the spirit of bridge discourse, nor the Ministry of Foreign Affairs (MoFA) of Nepal has officially forwarded any such proposals. Thus, bridge discourse is used only as a political rhetoric by Nepali leaders to cope with the rise of China, and also by the Chinese leaders to further advance their influence in Nepal. Although Beijing is conventionally perceived as balancer by the power elites in Kathmandu to the Indian influence in Nepal, the rise of China has now stimulated Nepal’s small state syndrome, not only by preventing Kathmandu from exercising its independent foreign policy response, particularly on the issue of Tibetan refugees, and “One China policy,” but also by dictating Nepal’s foreign policy priorities through discourses (as of “bridge,” “land-linked”) and deeds (China’s protracted lobbying to block MCC).

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Sharma, B., & Schultz, K. (2019). Xi Jinping comes to Nepal bearing investments, and India is watching. The New York Times. https://www.nytimes. com/2019/10/12/world/asia/xi-jinping-nepal-india.html Sharma, G. (2019, October 13). Nepal pushes to end dependency on India with China rail, tunnel deals, Reuters, October 13, 2019, https://www. reuters.com/article/us-nepal-china-xi/nepal-pushes-to-end-dependency-onindia-with-china-rail-tunnel-deals-idUSKBN1WS0CA Shrestha, P. (2021, December 18). North has renewed cross-border train pledge, but progress slow on the ground. The Kathmandu Post. https://kathmandu post.com/national/2021/12/18/north-has-renewed-cross-border-train-ple dge-but-progress-slow-on-the-ground State Council. (2021, May 21). Tibet since 1951: Liberation, development and prosperity. The People’s Republic of China http://english.www.gov.cn/arc hive/whitepaper/202105/21/content_WS60a724e7c6d0df57f98d9da2.html Stiller, L. F. (1968). Prithwinarayan Shah in the light of Dibya Upadesh. Himalayan Book Center. Subba, P. (2021). Nepal’s survival strategies during the Shah Era. Unity Journal, p. 181. Tao, Li. (2017). From Yam to Bridge. The Kathmandu Post. https://kathmandu post.com/opinion/2017/02/03/from-yam-to-bridge Tauthail, G. O., & Agnew, J. (1992). Geopolitics and discourse: Practical geopolitical reasoning in American foreign policy. Political Geography, 11(2), 190–204. Tharoor, S. (2019). India’s China Problem in Pakistan. Project Syndicate, https://www.project-syndicate.org/commentary/china-enabling-terrorleaders-to-operate-freely-by-shashi-tharoor-2019-03 The Rising Nepal. (2020, August 31). China proceeds ahead with study of Kathmandu-Kerung Railway. https://risingnepaldaily.com/business/chinaproceeds-ahead-with-study-of-kathmandu-kerung-railway Wagner, C. 2016. The rise of India and China in South Asia. Strategic Analysis. Wang, Y., & Liu, X. (2019). Is the belt and road initiative a Chinese geopolitical strategy? Asian Affairs, L(02), 260–267. Asian Affairs. Zhexin, Z. (2018). The belt and road: China’s new geopolitical strategy? China Quarterly of International Strategic Studies, IV (03), 327–343. https://doi. org/10.1142/S2377740018500240

CHAPTER 4

From Survival to Sustenance

Relishing Norwegian salmon, Cantonese noodles, Dijon mustard, and mascarpone cheese in Soaltee, a pioneer in Kathmandu’s hospitality sector, Chinese President Xi Jinping took no less time to make an unusual claim among the Nepali leaders on October 12, 2019, “We would help to transform Nepal into a ‘land-linked’ country”. He said so while delivering his banquet speech. To the Nepali folks, “landlocked” is associated with underdevelopment and mere survival in both geopolitical and economic terms. But, the idea of “land-linked” has already fascinated the policymakers in Nepal with the prospects of globalism and diversification. Thus, this chapter examines two pertinent questions: (a) How far Nepal’s claim to neutrality as the survival strategy has been productive in achieving Nepal’s national interest? (b) What is the prospect of upgrading Nepal’s survival strategies to the strategy of sustenance, while India and China have emerged as the economic powerhouse? While Nepal’s foreign policy priorities and behavior remain extensively driven by Morgenthau’s concept of territorial state, at the heart of which lies survival strategy, Nepal hasn’t devised prerequisite institutions to implement Philip C. Bobbitt’s idea of market state, at the center of which lies the market. While this chapter attempts to recommend Bobbitt’s concept of the market state as a sustenance strategy for Nepal instead of restricting its foreign policy behavior to the Cold War survival strategies, it has been realized that power elites in Kathmandu are so much accustomed © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. Bhattarai, Nepal Between China and India, https://doi.org/10.1007/978-3-030-99974-2_4

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to exploiting the survival strategies that any departure won’t be certainly welcomed. Hitherto, Nepal has neither initiated any strategies to reduce its economic dependency on India nor it has planned the list of goods to be exported to China once the trans-Himalayan railway reaches Nepal’s borders. Rather, decision-makers of the strategically placed country are diligent in appeasing its neighbors, and disguising survival strategies in the name of neutrality.

Nepal’s Neutrality: Survival Strategy Plagued by the conflicts between the immediate neighbors, and facing the inability to withstand the pressures exerted by the major powers, some of the small countries have been lured by Swiss-type neutrality. The first president of Bangladesh Sheik Mujibur Rahman, Cambodian statesman Norodom Sihanouk, and King Birendra of Nepal had harbored a desire to transform their countries into the “Switzerland of Asia” (Maniruzzaman, 1982). But, expressing a desire for neutrality in the international community is easier than achieving it effectively. Any state willing to exercise effective neutrality is anticipated to meet several requirements in the eyes of the international community. Firstly, its claim to neutrality should be based on its history of abstention from active involvement in war and avoidance of any policy or strategy, which may indulge itself in future wars. Secondly, its neutral position should be advantageous to the major powers. Thirdly, it must be militarily capable to ascertain the inviolability of its territory. Fourthly, it should be politically stable, and citizens must be determined to defend its neutrality. Fifthly, it shouldn’t have a military liability to any of the great powers (Aunesluoma & Rainio-Niemi, 2016; Binter, 1985). Sweden and Switzerland acquired their neutral status in the same manner. Nepal’s claims to neutrality, however, don’t meet these requirements. Nepal was an imperial and expansionist state(Regmi, 1999), at least until 1814, when its adventurism was confronted by the British East India Company. Since then, it allied with British colonial powers until India attained its independence in 1947. With the modern, independent India on its South and a communist China on its north, Kathmandu’s claim to neutrality is more of a survival strategy to balance its relations with two Asian giants (Rose, 1971). As India has been skeptical of Nepal’s neutrality at several junctures, Kathmandu’s claims to neutrality have not been largely inventive, rewarding and advantageous in today’s globalized world, which demands a greater level of trust and

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reciprocity among the countries. Nepal’s border disputes with India, and Sino-Indian competition for influence in Nepal’s bordering regions suggests that Kathmandu is not in a position to assure the inviolability of its territory. Lack of political stability and upsurge in anti-Indian nationalism in Nepal has diluted Kathmandu’s claims to neutrality (Rae, 2021). Although Nepal doesn’t have military liability to either India or China, New Delhi often invokes the provision of mutual security in the 1950 treaty and the 1949 agreement on the recruitment of Nepali Gorkha soldiers in the Indian army (Thapliyal, 1998). The neutrality that solely relies on the balance of power is likely to last only until the balance exists. With the collapse of balance, neutrality also starts to crumble down. Nepal’s claims to neutrality are mostly characterized by the same approach. King Mahendra of Nepal maintained difficult neutrality during the Sino-Indian border war of 1962 by repudiating the 1950 treaty with India, which demanded mutual consultation for the countermeasures against “any threat to the security of the other by a foreign aggressor.” But, as soon as the war ended, Mahendra exploited his hawkish strategy by appealing China to build a road linking Nepal’s capital with Chinese borders, as an attempt to offset Indian influence in Nepal. In the same manner, his son Birendra introduced Zone of Peace proposal to deal with the new regional balance that was unfolding after the emergence of Bangladesh as a newly independent country with the support of New Delhi, and following the merger of Sikkim into the Indian Union in 1974 along with India’s nuclear test the same year. But, subsequent to India’s objection against Birendra’s neutralization policy through the Zone of Peace proposal, he went on purchasing arms from China in 1988, which perturbed New Delhi. Since the days of the unification of Nepal, all kinds of regimes and governments in Nepal have sought to bemuse the South by highlighting Kathmandu’s proximity with the north. Only the shades have varied today (Ramakant, 1994). Before Indian independence, although Ranas were heavily dependent on the British Empire, Ranas hadn’t severed their inconsistent relationship with China entirely. Even though Nepal had no direct access to the centers of Chinese power, economy, and culture, Kathmandu highlighted its relations with the Beijing court “to secure different concessions and privileges and pressurize India variously” (Ramakant, 1994). Today, while Nepal is being exposed to Chinese power, economy, and culture through the BRI projects, effective neutrality from Kathmandu cannot be expected. Precisely, the objective of “neutralization”

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from alarming development in the neighborhood relies on the balance of power approach, and as such, echoes the survival strategy of the Himalayan country (Rose & Scholz, 1980). Having survived as an independent state for centuries, Nepal has embraced various policies and framed different strategies to shield its sovereignty, territorial integrity, and political independence. At times, it remained isolated from the menacing developments in the vicinity; other times, it accepted the subordinated position to the powerful forces in the region; during several other occasions, Nepal delicately balanced one neighbor against the other. There were times, when Kathmandu employed all three at once (Rose & Scholz, 1980). For instance, although Nepal accepted its subordination to British India during the period of British colonialism in South Asia, it concomitantly retained its isolation from the outside world, and highlighted its proximity with China as the need sprang. At present, while Nepal ostensibly enters a systemic buffer system because of the resurgence of the Sino-Indian territorial conflict and India aligning with the US to contain China, Kathmandu has once again faced the challenge to underpin its strategic autonomy. In today’s globalized world, a country’s sovereignty is conditioned by assorted factors. Conventional underpinnings of territorial integrity is being transformed by the construction of trade corridors and cross-border connectivity networks. Political independence, too, is not free from the influence of interest groups, lobbyists, MNCs, and non-state actors. In such an adverse context, how small countries like Nepal can sustain their autonomous identity. The Cold War survival strategies may be abundant, but not adequate. While survival strategies are generally devised by the small states located in highly strategic areas to shore up and rationalize their acts and demeanor in surviving as a territorial state, the strategy of sustenance reinforces the conventional endeavors in surviving as a sovereign state, but is not limited to that alone. In the Nepali context, the strategy of sustenance nourishes the survival of Nepali state in two ways: Firstly, by going beyond the immediate neighborhood and contriving a globalist approach, which however doesn’t mean discarding the importance of the Gulliverian neighborhood. Rather, it is more about not constraining yourself to the neighborhood. Secondly, by coming out of the hangover of the territorial state and starting to function as a market state, Nepal could draw more benefits of multilateralism, international trade, human

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mobility, information technology, open borders, and globalization that contemporarily foster the survival strategies of the small countries. Today, Westphalian states are being gradually transformed by market states (Bobbitt, 2003). Unlike the Westphalian states, which wage wars, invade territories, encourage conflicts, and prioritizes self-help and Cold War/colonial survival strategies, the market state encourages reciprocity and interdependence between the countries, and underlines the utmost gravity of free trade and free-market economy for human happiness. While the key objective of the territorial state is to ensure the survival of the state, the market state doesn’t see itself as “more than a minimal provider or redistributor; the market state only attempts to augment the choices accessible to individuals” (Bobbitt, 2003). In the context of foreign policy and international relations, the market state has more to do with liberal institutionalism, which demands cooperation between the states to achieve the common goal. In today’s age, where the idea of state sovereignty itself is conditioned by the ability of the government to protect its citizens from the non-conventional security threats, Nepali policymakers have been perversely exploiting the Cold War survival strategies, which may be advantageous to the power elites but largely detrimental to the general public. From the perspective of the territorial state, we may say that Tibet and Sikkim survived as independent Himalayan countries until 1949 and 1974, respectively. But they couldn’t sustain further and had to merge into their gigantic neighborhood. Although Kathmandu successfully escaped the fate of Sikkim and Tibet, challenges loom large against Nepal’s survival. Dismissing a country’s size by location for a while, Russian invasion of Ukraine is an apt example. Today, the concept of survival is not only associated with the phenomenon of surviving as a territorial state but also as a functional state, which has a robust economy; engages effectively in the multilateral forums; maintains accountability and transparency in its foreign policy behavior (McCarthy & Fluck, 2016). The strategy of sustenance underscores that survival strategies alone are not plenteous in dealing with the newer security threats emanating from the high risk and uncertain strategic environment triggered by the extent of Sino-Indian rivalry and Sino-US strategic competition. Thus, it’s timely for Nepal to devise sustenance strategy that not only revitalizes the existing survival strategies but also spurs Nepal to maneuver its foreign policy objectives globally. But, Nepal’s hefty concentration in its immediate neighborhood is culpable, while its involvement

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in regional and global affairs is significantly low, because of its location, size, and influence. Unable to influence a regional system, landlocked Nepal is economically dependent on its neighbors for trade, investment, and aid. In the context of Sino-Indian rivalry and Sino-US strategic competition, and their implications on Nepal, effective, skillful and pragmatic diplomacy is the best sustenance strategy that Nepal could adroitly adhere to, instead of pretentiously taking refuge in the survival strategy of non-alignment and ambiguous claims to neutrality. In today’s globalised world, an extreme form of economic dependence weakens one’s survival strategies and adulterates a country’s claim to neutrality. Nepal’s dependence on India for trade and transit has not only impacted Kathmandu’s economic behavior but also its political demeanors. New Delhi also takes no less time to exploit Nepal’s dependency in fulfilling the former’s political interests, which at times, compels the latter to compromise its claim to neutrality. In 2015, when Nepali leaders paid no heed to India’s palpable reservation over Nepal’s new constitution, New Delhi imposed an economic blockade on Nepal, resulting into an artificial shortage of daily goods in the Himalayan country (Khobragade, 2016). Setback to Delhi’s coercion was Kathmandu’s crawl towards Beijing. Nepali rupee is pegged to India’s. Landlocked Nepal uses Indian ports for trade, and thousands of Nepalis work in India. Even after the construction of the Araniko Highway connecting Kathmandu with Lhasa, Nepal had access only to Tibetan cities via road. It was only in 2016 that Nepal got access to the Tianjian port of China, while Kathmandu was bearing the brunt of the Indian blockade (Mishra, 2020). A strong economy is the source of national power capabilities. Nepali economy is a dependent economy, which faces difficulty to go beyond the neighborhood and perform the task of a market state. Philip Bobbitt has identified three types of market states: entrepreneurial market state, managerial market state, and mercantile market state. While the entrepreneurial market state provides less place to state intervention and engages more in strengthening human security infrastructure including education, health, economy, the managerial market state aims to achieve egalitarianism through serious planning (Bobbitt, 2003). A mercantile state is more a protectionist state that keeps control over the flow of capital (Bobbitt, 2003). In the case of the Nepali state, there is a sharp divergence between the constitutional provisions and practices. Studying Nepal’s economic behavior, at present, situating Nepal’s case in Bobbit’s

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categorization of market states won’t be justifiable at least until Nepal forsake its survival strategies. While Nepal adopted the policy of socialism in its new constitution in 2015, Nepal’s economic behavior and economic institutions have retained the characteristics of neoliberalism. Its foreign trade is characterized by dependency and trade deficit. Today, Nepal’s economy is sustained by revenue and remittance. The flow of foreign aid to Nepal is determined by the strategic interest of the donor states. It’s where Nepal’s survival strategies unfold at the utmost. Policies to attract FDIs are also not encouraging in Nepal, discouraging the legitimacy and societal purpose of the market state. Today, the idea of sovereignty and power has also witnessed a sea change. Because, private companies are not only the supplier to the government. Instead, they partner with the government. For the entrepreneurial state, sovereignty “arises from the people” (Bobbitt, 2003). For the managerial state, sovereignty is conditioned by international treaties and conventions. But, for the mercantile state, sovereignty is “opaque and cannot be breached” (Bobbitt, 2003). In Nepal, we find all three kinds of approaches. Constitutional definition of sovereignty is driven by the mercantile state. Nepal’s engagement in the United Nations and different human rights forums has also broadened the concept of sovereignty as defined by the entrepreneurial and managerial states. When it comes to dealing with its gigantic neighborhood, Nepal exploits the concept of sovereignty as a political rhetoric, divulging an act of territorial state. For an entrepreneurial state, power is economic and is derived from the “production and marketing of collective goods”. A managerial market state accumulates power through its effective participation in regional economic affairs. Mercantile state, however, intends to gain dominance in the international market (Bobbitt, 2003). Nepal’s economic power is very weak and feeble in comparison to its two neighbors, who have already emerged as the economic giants enormously shaping the global trade and economy. While Nepal mainly exports iron and steel products, woolen carpet, ready-made garments, yarns, cardamom, medicinal herbs, tea and coffee, fruit and vegetable juices, the Himalayan country largely imports petroleum products, transport vehicles, and their spare parts, gold, iron and steel products, electronics and electrical equipment, cement, pharmaceutical products, chemicals, and fertilizers (MoICS, 2019). The list of its exportable goods is small and non-competitive. Despite being located between the two most populous countries in the world, its access to the markets in both

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the countries is largely constrained by its landlocked position and institutional deficiency. Although India and China have provided Nepal access to their seaports, Kathmandu hasn’t been able to reap the required benefits because of the lack of political willpower and institutional constraint. Today, in terms of both imports and exports, India remains Nepal’s largest market with 64% of the share in Nepal’s imports and exports, as per the 2021 data of the Central Bank of Nepal (Nepal Rastra Bank) (as mentioned in Table 4.1). More than 60% of Nepal-India trade is done through the Birgunj border point, which was entirely blocked during the 2015 blockade (Bhattarai, 2017). With its closure, Nepal approached China to diversify its trade and transit. But, Nepal’s diversification projects too remained confined to discourse and political rhetoric in front of hostile geography discouraging the land connectivity between Nepal and China. Still, such acts of balancing triggered by survival strategies not only dilute a country’s claim to neutrality but also undermine the prospect of fruitfully executing the strategy of sustenance that could, otherwise, be of help to come out of the asymmetric dependence and not restricting its foreign policy priorities to the immediate neighborhood. But, looking at the direction of Nepal’s foreign trade, going beyond neighborhood demands herculean accomplishments under the aegis of abundant political will, pragmatic diversification policies, genuine economic capabilities, and technology-informed industrial prowess. After all, Nepal’s economic engagement is higher in the immediate neighborhood in terms of its import, export, total trade balance, and total foreign trade (as presented in Table 4.2). Table 4.1 The volume of Nepal’s annual trade with India (Rs. in million)

Particulars

2019–2020 (annual)

2020–2021 (11 months)

Export Import Volume Share (%)

70,108.90 735,294.80 805,403.70 62.20

90,194.60 886,593.10 976,787.70 64.90

Source Nepal Rastra Bank

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Table 4.2 Direction of Nepal’s foreign trade (Rs. In Ten Million) Heading

2017/2018

2018/2019R

2019/2020P

Percent change 2018/2019

Total 8135.98 exports To India 4671.98 To China 243.77 To other 3220.23 countries Total 124510.32 imports From India 81410.16 From China 15998.71 From other 27101.45 countries Total trade −116374.34 balance With India −76738.18 With China −15754.94 With other −23881.22 countries Total 132646.30 foreign trade With India 86082.14 With China 16242.48 With other 30321.68 countries

2019/2020

9710.95

9770.9

19.4

0.6

6273.18 210.98 3226.79

7010.9 119.1 2640.9

34.3 −13.5 0.2

11.8 −43.5 −18.2

141853.53

119679.9

13.9

−15.6

91790.93 20552.74 29509.86

73529.5 18192.0 27958.4

12.8 28.5 8.9

−19.9 −11.5 −5.3

−132142.57

−109909.0

13.5

−16.8

−85517.75 −20341.76 −26283.06

−66518.6 −18072.9 −25317.5

11.4 29.1 10.1

−22.2 −11.1 −3.7

151564.48

129450.8

14.3

−14.6

98064.11 20763.72 32736.65

80540.4 18311.1 30599.3

13.9 27.8 8.0

−17.9 −11.8 −6.5

Source Nepal Rastra Bank, while R= Real, P= Provisional

Beyond the Neighborhood Nepal has perceived its gigantic neighborhood as a source of opportunity in the wake of the spectacular economic performance of India and China (Khadga & Bhattarai, 2018; Rana, 2013), as well as a source of threat in the context of the Sino-Indian rivalry (Rana, 2013), whose implications are, however tapped by the power elites of the small countries, acclimatized to the art of balancing in order to prolong their stay in power. Thus, even though the strategy of sustenance offers the realization of going beyond the neighborhood and relishing the fruit of multilateralism and regional organizations, it’s easier said than done for small countries like

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Nepal (Bhattarai, 2018). Because, going beyond the neighborhood to resolve the problems emanating in the neighborhood requires effective and assertive diplomacy. But, Nepal cannot afford to worsen its relations with the immediate neighbors by hauling the bilateral issues beyond the neighborhood. For example, when Nepal faced an Indian blockade in 2015, which was a serious violation of international law, Kathmandu could have gone beyond the neighborhood and filed a case against its southern neighbor for violating General Agreement on Trade and Services (Bhattarai, 2018). The blockade also violated the Convention on Transit and Trade of Landlocked States in 1965, and the UN Convention on the Law of the Seas. Both, Nepal and India are members of the World Trade Organization (WTO) and are entrusted to promote free trade with each other. But, the Indian blockade of 2015 on landlocked Nepal severely violated it. Also, in the year 1989, when India had imposed a blockade on Nepal, New Delhi justified its coercion by citing the expiry of the transit treaty. But, in the year 2015, the treaty was still in force. Despite being a party to WTO, Kathmandu couldn’t internationalize the issue, firstly because of Nepal’s economic dependency on India; and secondly, the small country cannot afford to jeopardize its ties with the regional power. The then Nepali Minister for Commerce and Supplies Ganesh Man Pun was haunted by the same lilliputian dilemma, when he was participating in the 10th Ministerial Meeting of the World Trade Organization in 2015 in Nairobi. He meticulously controlled himself from using the term, “blockade” and only stated that “disruption of supplies and hassles in transit created a humanitarian crisis in Nepal”. Thus, Nepal’s asymmetric dependence on India is a weighty hurdle in its effort to go beyond the neighborhood. Although Nepal has a membership of different regional, sub-regional, and international organizations along with its access to four Chinese seaports in Shenzhen, Lianyungang, Tianjin, and Zhanjiang, and three land ports in Shigatse, Lhasa, and Lanzhou, almost two-thirds of Nepal’s trade is with its southern neighbor India. Being the members of WTO, Nepal and India are obliged to eliminate all kinds of tariffs on manufactured goods; however, both the trade treaties between Nepal and India have accommodated tariffs on manufactured goods including copper, vegetable fats, acrylic yarn, and zinc oxide. To get rid of such adverse situations that kill the spirit of free trade, Nepal cannot afford to seek assistance from the trade regimes and multilateral forums, which may expose Nepal-India relations to risk and damage.

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Instead, Nepal’s asymmetric dependence on its southern neighbor is inconsiderately exploited by different governments and regimes in Nepal to prolong their stay in power through the policy of appeasement towards India. Also, Nepal’s long-standing desire to draw benefits from the economic rise of India and China remains restricted to political rhetoric, and cannot be materialized unless the mobility and trade infrastructure in the borders have substantially improved. Bans imposed on the exports of Nepali ginger to India is an apt example. In such a context, Nepal could have sought assistance from the Trade Facilitation Agreement (TFA) under the framework of World Trade Organization (WTO) to facilitate the movement of goods across the Nepal-India borders by eliminating all kinds of trade hurdles. Landlocked countries like Nepal can draw substantial benefits from TFA, by reducing its trading costs and through the faster movement of goods and swift transit clearance. Let’s take another example of the United Nations Conference on Trade and Development (UNCTAD), whose assistance could be sought in successfully materializing Nepal’s policy of trade and transit diversification. Drawing the benefits of special tariff concession, Nepal could export its goods globally at reduced rates and duty-free. UNCTAD is the best platform for Nepal to come out of its asymmetric dependence and get connected to the global value chain, as it offers technical assistance in tackling different kinds of vulnerabilities, improving trade competitiveness, and empowering people by transforming economies. While Nepal has always compromised its economic aspirations to the geopolitical vulnerabilities in the wake of the Sino-Indian rivalry, UNCTAD provides a safe passage (Bhattarai, 2018). Its technical assistance could be largely beneficial in balancing the investments of major powers in Nepal. Despite the opportunities available for spreading its wings, the problem is vested in the lack of political will and institutional deficiency. As the Nepali political leadership has always relished the conventional act of balancing one neighbor against the other to draw foreign aid, assistance, and FDIs, any attempts to go beyond the neighborhood, as envisioned by the strategy of sustenance, have been distasted and discouraged. Quite a preposterous affinity towards the hackneyed survival strategies has also tantalised Nepal’s foreign policy institutions, marginalizing a knowledgebased approach to Nepal’s economic diplomacy. In the pretext of going beyond the neighborhood, and diversifying the external relations and trade through multilateralism and international organizations, there have also been instances of bolstering your influence and power back home.

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Nepal’s Geography: Prison or Power The strategy of sustenance doesn’t only strategize a state’s geography. Instead, it prescribes ways to augment institutional capabilities and devise appropriate policies, accordingly, to fulfill contemporary needs through political insights and integrity. Unlike the recipe of survival strategies, where the political insight is emboldened by limited rulers and elites, the strategy of sustenance is people-driven and mass-based. Here, we advance from the state as a source of sovereignty to people as its source; from the balance of power to balance of interest; from extractive state to distributive and inclusive state; from isolation to connectivity; and from dominance to interdependence (Aditya, 2021). Contrary to the survival strategies that exploit a state’s geographical location to engage in regional or world affairs, the strategy of sustenance remains aware of the impact of globalization on geopolitics (Anderson, 1998). But, even in the age of globalization, Nepal’s lack of direct access to the sea is considered as the major reason behind Nepal’s underdevelopment. As such, Kathmandu-based economists, foreign policy experts, development planners, and the business community are heard stressing that Nepal’s prosperity depends on its geography. But sustenance strategy conceives the possibilities to overcome the geographical impediments by devising appropriate institutions and framing suitable policies towards enhancing trade and improve connectivity. Nepal’s connectivity-driven development strategy suits the requirements. But, instead of confining it to the political rhetoric by using the term like “bridge” between India and China, which has already riled policymakers in New Delhi, it’s more pragmatic to get connected with both the neighbors separately through roadways, railways, and airways. Because, it is substantially important for Nepal to address the security concerns of its neighbors before launching the strategy of sustenance. Equally important is to keep the trade corridors free of strategic and security concerns, which is not carefully thought out in Nepal, however. The aid, assistance, and investment of India and China in Nepal, for all intent and purpose, are determined by their security concerns. The issue of the “debt trap” attached with Chinaled BRI projects has made Kathmandu’s connectivity-impelled strategy more uncertain. Thus, Nepal faces multiple challenges in materializing the connectivity-driven development model as its sustenance strategy. While Chinese President Xi Jinping eloquently mentioned China’s support in upgrading Nepal’s status to a land-linked country in 2019, New Delhi

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perceived it as a ploy to undermine its Himalayan frontier, resulting into Kathmandu’s quivering claims to neutrality. Because, New Delhi has perceived Kathmandu’s desire to get connected with both the neighbors economically, in two ways: as Nepal’s strategy to cope with the rise of China, and to neutralize India’s influence in Nepal (Photo 4.1).

Photo 4.1 Chinese President Xi Jinping and Nepal’s President Bidhya Devi Bhandari raising their glass to toast during the state dinner at Soaltee Crown Plaza in Kathmandu on October 12, 2019 (Photo courtesy: National News Agency of Nepal)

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Today, China is well-prepared to extend its Qinghai-Tibet railway up to the Nepal’s border in Kerung, which has generated a sense of excitement and certain ambitions among the Nepali folks. Excitement about getting easy access to the Chinese market, new tourist arrivals and the prospect to increase trade and FDIs; and ambition of offsetting Indian influence in Nepal. Survival strategies are ingrained in such a manner in the Nepali society that any undertakings to build vital and indispensable institutions are often left unattended. For instance, in the context of China’s trans-Himalayan railways, Nepali policymakers aren’t noticed raising a pertaining question: what will Nepal send back to China as soon as the train reaches Kerung? Needless to say, the Chinese train will flood Nepali markets with low-priced Chinese goods. But, on its return leg, will the train back empty? Looking at the limited amount of exportable goods from Nepal, they cannot compete against the Chinese products. In that case, will Nepali goods be confined to Lhasa in Tibetan Autonomous Region (TAR)? In the medieval and modern history of Nepal’s economic interaction with China, trade was always confined to Tibet. Dispatching goods without cost–benefit analysis wouldn’t be a wise decision; and, to do that it is necessary to understand the demands in the Tibetan market. Although there is a high demand for green vegetables in Tibet, Nepal shouldn’t haste in sending them without making a cost–benefit analysis of the cost incurred in producing and transporting them. Because exporting any goods that are already available at low prices in the Chinese market would only make a loss. Instead of raising such practical and policy issues, the Nepali decision-makers are busy portraying the railways from China as a geopolitical weapon. But, it should be also understood how China is building the border infrastructure and connectivity projects, under the framework of a new grand strategy to fulfill its strategic ambition of encircling India (Clarke, 2017). In the context of Nepal-China relations, Chinese railways offer an opportunity for Beijing to enter the South Asian market, which is India’s backyard. Apprehending the same, although India is the founding member of the Asian Infrastructure Investment Bank (AIIB), a multilateral investment bank heavily sponsored by China, New Delhi hasn’t joined BRI. But, Nepali policymakers are yet to pay earnest heed to Indian security sensitivities emanating from the proposed Chinese railways. Afterall, they view Chinese railways as an effective instrument to counterbalance Indian influence in Nepal. As a result, they cannot purposely flee the survival strategies.

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The first-rail-road service from China to Nepal itself was a geopolitical move: as a symbol of protest against the Indian blockade on Nepal. It’s how Nepal strategized its geography: wishing to gradually escape from the prison of landlockedness to the power of landlinkedness. Until May 12, 2016, when China launched its first rail-and-road service from Lanzhou of Gansu Province in China to Nepal borders, Kathmandu was solely dependent on the Kolkota port of India. The week-long journey from Lanzhou to Kathmandu was covered by road and rail. The distance of 2,431 km from Lanzhou to Shigatse was covered by rail, while the remaining distance of 564 km from Shigatse to Kerung was covered by road transport. The distance of 160 km from Kerung to Kathmandu was also road transport. In terms of distance, Kolkata port is about 1,000 km from Nepal against the Tianjin port in China, which is 3,300 km away from Nepali borders. At first glance, Kolkata port makes more business sense. But, assessing the shipment cost, it takes more than 35 days for the Chinese goods to reach Nepal via Kolkata. But it wouldn’t take more than 10 days for those goods to reach Kathmandu via Kerung from Tianjin port, which trades with over 600 ports in different countries, unlike the regional port of India. Thus, trading through Tianjin port may significantly reduce Nepal’s shipment costs. But, geography is a revenge, and language is a barrier. The Himalayan geography is very hostile and still unfavorable to conduct everyday trade like Nepal has been doing with the Indian ports of Kolkata and Vishakhapatnam. While communication skills lie at the heart of any business, the inability of Nepali drivers and businessmen to understand and speak the Chinese language is a cultural barrier in promoting cross-border trade and connectivity with China. Despite such a stark reality, power elites in Nepal take no less time to portray Nepal’s access to the Chinese port as the game-changer project. Even though Chinese train may diversify Nepal’s trade relations, it will also increase Nepal’s trade deficit with China, unless Kathmandu is certain about the list of goods to be traded in Chinese markets. In that case, its dependence will only shift from India to China, or oscillates back and forth. And, it won’t yield any positive outcomes, instead of worsening Kathmandu’s balance of payment. Thus, it is very important to find an answer to the question: what Nepal will send in Chinese trains? Unless Nepal plans accordingly, the Chinese railway will not only invite geopolitical tensions but massively augments Kathmandu’s trade deficit

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and dependency on Chinese goods, constraining Nepal’s foreign policy options. Henceforth, it cannot be a sustenance strategy. As per the data available of mid-March of the fiscal year 2020/2021, Nepal’s total export increased by 7.8% to Rs. 80.78 billion. During the same period in the fiscal year 2019/2020, total export stood at Rs. 74.91 billion. In the middle of the March of the fiscal year 2020/2021, Nepal’s export to India increased by 11.3% while export to China decreased by 43.7%. Thus, it is understandable that only getting connected to the Chinese trains won’t usher Nepal into the age of prosperity. In total trade, Nepal’s share of export has been declining since the last decade. In such an adverse scenario, it’s best to be assured of the list of goods that Nepal could send and compete in the Chinese markets.

Aids and Interests After the devastating earthquake hit Nepal in the April of 2015, Taiwan had offered to send its search and rescue team to help Nepal, along with the pledges of financial assistance. But the government of Nepal declined it brusquely, citing that assistance from the immediate neighborhood is prioritized. In reality, Nepal was accepting earthquake aid from countries around the world. But, why not from Taiwan? The answer is quite clear. Nepal has always adhered to the one-China policy, and considers Taiwan as an integral part of China. Thus, by accepting aid from Taiwan, Nepal didn’t wanted to upset China. Usually, China refuses to maintain harmonious relationship with countries that recognize Taiwan and at times, even penalizes them. In 1999, Macedonia was allegedly punished by China for establishing ties with Taiwan. China had vetoed a Security Council resolution extending the stay of peacekeepers in Macedonia, and left it to burn. Today, while China International Development Cooperation Agency (CIDCA), which is China’s external aid and development agency (Giri, 2021) has made its first entry into Nepal to develop Nepal’s northern borders in the same manner as India is interested to develop the southern region of Nepal (Embassy of India, n.d.), Nepal needs to understand that China’s security and strategic interest in Nepal is still associated with Tibet issue as Nepal’s 15 out of 77 districts are bordered with Tibetan Autonomous Region. Through its soft power, China wants to ward off the Western countries and India from appearing closer to Tibet through Nepal’s borders. Before launching the development projects in Nepal’s northern borders,

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the Tibetan autonomous government used to supply food and other essentials to the 15 Nepali districts in Gorkha, Manang, Mustang, Mugu, Dolpa, Bajhang, Humla, Darchula, Dolakha, Solukhumbu, Rasuwa, Sankhwasabha, Dhading, Sindhupalchok and Taplejung. Chinese aid in Nepal is channeled in critical infrastructure and connectivity projects including: Upper Trishuli Hydropower Project-Power station and Transmission Line Projects Kathmandu Ring Road Improvement Project Larcha (Tatopani) and Timure (Rasuwagadi) Frontier Inspection Station Project Pokhara International Regional Airport Upgradation of Syaprubesi-Rasuwagadhi Road Upgradation of Civil Service Hospital Upgradation of Kodari Highway and restoration of bordering bridges at Kodari and Rasuwagadhi (MoFA, n.d.) India, too, has invested in building Nepal’s major highways, airports, and several other connectivity projects. But, these days, New Delhi is also fascinated by the Small Development Projects (SDPs), which are of short duration, but help India to interact at the grassroots level. Under the same scheme, India has been building schools, offering health facilities, drinking water facilities, and constructing rural roads (Rae, 2021). Although India has decreased its foreign aid to Nepal for the fiscal year 2020–2021 amounting to NRs. 12.8 billion, New Delhi has agreed to provide four lines of credit to Kathmandu that amount to $100 million, $250 million, $550 million, and $750 million (Shrestha, 2022). These lines of credit were signed in different years from 2006 to 2016 as part of the infrastructure development projects and postearthquake reconstruction projects in Nepal. China, too, has completed various reconstruction projects in Nepal including Kathmandu-Ring Road Improvement, Tatopani Frontier Inspection Station, Kathmandu Durbar High School, Civil Service Hospital, Earthquake Monitoring Network, among others (Photo 4.2). Along the geopolitics of the cross-border connectivity projects, foreign aid to Nepal is also not free of its geopolitical value (Khadka, 1997) and the culture of aid dependency in Nepal exposes its colossal survival

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Photo 4.2 Chinese flag waves in the air, on the threshold to the reconstruction site of the nine-story palace at the Basantapur Durbar Square in Kathmandu. The historical palace was devasted by the 2015 earthquake and is being reconstructed today with the financial support of the Chinese government (From Author’s Archive)

strategy. On the contrary, the strategy of sustenance ridicules the failure of foreign aid in reducing poverty and infrastructure deficiency, and rather encouraging political corruption and widening the poverty gap. As the voluntary transfer of capital, goods, and services, from a country or international organization to a receiving state, foreign aid usually covers both

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grants and loans and is dispensed at the bilateral and multilateral, government, and private levels. Aid excludes commercial transactions, however, and maybe given without conditionality, or it may come with some strings attached. Economic aid is dispensed largely to resolve the balance of payment problems. Developmental aid is generally dispersed to alleviate poverty. Military aid is usually allocated to one’s allies or anticipated allies. Humanitarian aid is customarily doled out, during the time of crises, triggered by natural disasters and pandemics. Interestingly, Nepal has received developmental aid, military aid, and humanitarian aid from the same country. For instance, Nepal has received all kinds of the aforementioned aids from China, India, and the US, in different periods of time. As far as one can tell, it plainly exposes the act of balancing that Nepal has long pursued as part of its survival strategy, which also renders the threat of getting hauled into a geopolitical chessboard as the strategic competition between the US and China escalates globally, and Sino-Indian rivalry inflames regionally. In that sense, foreign aid, too, has impacted Nepal’s claim to neutrality. As the conventional survival strategy, Kathmandu has been receiving foreign aid from the neighborhood and beyond since 1951. Development and geopolitics have always moved together in Nepal’s modern history. The first foreign aid that Nepal received from the US in 1951 was part of the containment program initiated by the US President Harry Truman(Mihaly, 2009). Because Nepal had become a frontline state against communist China after the Chinese takeover of Tibet. Until the beginning of a strategic partnership between New Delhi and Washington, Indian aid in Nepal was shaped by two factors: firstly, to fulfill its security concerns vis-à-vis China, and secondly, to offset the increasing influence of the US in Nepal. But, as the strategic partnership with the US evolved further, India’s foreign aid is chiefly concentrated to fulfill its first objective. Until the interests of New Delhi and Washington hadn’t converged over containing the rise of China, India even perceived the US’s offer of arms assistance to Nepal to combat terrorism as a threat to India’s security concerns. As a reaction to the US Secretary of State Colin Powell’s offer of arms assistance to Nepal, an editorial published in the Times of India in 2002 mentioned: If Pakistan-based cross-border terrorism violates Indian sovereignty, the same sovereignty is no less transgressed when, despite the 1950 treaty with Nepal, Indian sensibility is ignored by Mr. Powell’s explicit offer of military

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aid to the Himalayan country…Despite Nepal falling within New Delhi’s area of ‘security interest,’ is now being brazenly mocked by Washington’s overflying of Indian prerogatives.

Chinese aid is also strategic in nature. Beijing’s aid to Kathmandu should be seen as a goodwill gesture for supporting the former’s position on Tibet and for maintaining neutrality during the Sino-Indian border war of 1962 (Khadka, 1997). Even though Nepal’s immediate neighbors, China, and India, were not extensively well-off than Nepal until the 1980s, they managed to dole out aid to Nepal to fulfill their security and strategic interests. Foreign aid to Nepal carried the same strategic value, not only during the Cold War period, but also in today’s multipolar world. Thus, it won’t be advantageous for Nepal to seek a sustenance strategy in foreign aid. Because, with foreign aid, Nepal is subjected to endure the protracted contestation between the rival powers screwing Kathmandu to direct its foreign policy and strategic choices in appeasing its immediate neighbors, as a gesture towards uncompromising their security concerns, regardless of its own. Thus, becoming an aid-driven state, Nepal may not be in a position to thwart its neighbors’ national security overriding almost everything, when it comes to their foreign policy orientation towards Nepal. However, geopolitical contestations may not always impede a country’s path to economic development, if growth-enhancing policies could be fostered by devising effective policy institutions to implement the course of financial coordination and economic interactions. However, Nepal’s historical experiences suggest that the development process and growth prospects often get derailed in its efforts to fulfill the political, strategic, and economic interests of the rival powers. Here, we may ponder over some pertaining questions: So, for a small, landlocked, and poor country, is it always about survival? Is it only because of its structural disadvantage that Nepal cannot formulate the sustenance strategies and effectively implement them? Or it is more because of the securitization policies of its neighbors that Nepal is fated to live with conventional survival strategies, which by no means allow Kathmandu to maintain effective neutrality?

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Neutrality as Disguised Hedging Although Nepal’s claim to neutrality as its survival strategy has been advantageous in certain unfavorable circumstances, including the IndiaPakistan wars, the Sino-Indian border war of 1962, the Doklam crisis of 2017, the Galwan skirmishes of 2020, and several other border standoffs between India and China, Kathmandu has largely failed to upgrade its survival strategies to the strategy of sustenance, when both the neighbors have emerged as the economic powerhouse. It is not only because of the lack of the appropriate political, economic, and foreign policy institutions in Nepal, but more because of the changing nature of the Sino-Indian relations, and their competing influence, and conflicting interests at the political, economic, and strategic fronts in Nepal, which Kathmandu is always anticipated to accommodate, regardless of its own aspiration to draw benefits from the neighborhood. As a result, Nepal’s general, variable and specific national interests are variously impacted, particularly, Nepal’s “economic wellbeing and prosperity” as mentioned in the provisions of the Constitution of Nepal on National Interest (5.1), which states that “safeguarding of the freedom, sovereignty, territorial integrity, nationality, independence and dignity of Nepal, the rights of the Nepalese people, border security, economic wellbeing, and prosperity shall be the basic elements of the national interest of Nepal”. Since the mid-1948, when Nepal had offered its ten Army battalions to the independent India in dealing with Hyderabad and Kashmir crisis, Nepal has always maintained militant neutrality in its external relations. But when it comes to political neutrality, Nepal’s claims are closer to hedging strategy, and have been more ambivalent and ambiguous. Assessing major regional developments and scrutinizing Nepal’s approach to them, it can be understood that Nepal’s unilateral claim to political neutrality is fraught with uncertainty, and is implausible. Nepal’s response to China’s takeover of Tibet wasn’t neutral, rather ambiguous. Because the Nepal-China war of 1788–1792, and the 1854–1856 wars with Tibet had already proved that Nepali state was neither in a position to bring the strategic northern frontier under its control nor could react strongly to the Chinese takeover of its Himalayan neighbor in 1951. Still, having China as a next-door neighbor was perceived by many Nepalis as not only a threat but also a counterbalance to Indian influence in Nepal (Rose, 1977). Nepal’s ambiguity was the result of the way Kathmandu awaited New Delhi’s response to the Chinese takeover. With an

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agreement between India and China in 1954, Nepal was advised by the Indian government to be cautious in advancing relations with China. As Nepal’s response to the Chinese takeover of Tibet was inspired by New Delhi’s advice to Kathmandu, the Himalayan country had to compromise its autonomous foreign policy. The trans-Himalayan trade driven by wool, salt, and food grains existing between Nepal and Tibet came to an end with the militarization of the Himalayas, impacting the work and livelihood of the Newari traders from Nepal in Lhasa. In the 1962 Sino-Indian war, although King Mahendra refused to take sides, it impacted Nepal-India relations, as Mahendra sought neutrality by repudiating the 1950 Treaty of Peace and Friendship. Interestingly, during the 1962 war, Indian troops were stationed in Nepal’s northern frontier as part of the Indian military mission in Nepal. As an attempt to make Nepal’s neutrality look convincing, King Mahendra went on saying that “Mr. Nehru’s hair has grown grey striving for peace…I know the Chinese premier has faith in Panchasheela” (Sharma, 1986). In the same manner, during the 1965 war between India and Pakistan, although Nepal emphasized neutrality and peaceful settlement of disputes between the two SAARC nations, the way Nepal government signed the PakistanNepali Collaboration Treaty just before the hostilities commenced, made Kathmandu’s neutrality appear polysemantic. It was further aggravated by the visit of Pakistani trade delegations to Kathmandu offering landlocked Nepal to use the Chittagong port, as an alternative to the Indian port in Calcutta (Husain, 1979). Above all, Nepal’s Foreign Minister Kirti Nidhi Bista, on his way to China, expressed his support to Pakistan on the issue of self-determination for Kashmir (Nepal Press Digest, 1963). Most interestingly, the Indo-Pakistan war motivated many Nepali youths to join the Indian army (Koshi Anchal, 1965) as India had opened a temporary recruitment office near Nepal-India borderlands enticing Nepali youths to join the Indian army (Motherland, 1965). Thus, when Nepali youths were joining the Indian army and the Nepali government was signing economic agreements with Pakistan, did Nepal’s claim to neutrality appear plausible? It was easier to understand the rationale behind Nepal’s claim to neutrality during the Sino-Indian war of 1962; but why did Nepal prefer to lodge neutrality in its foreign policy during the Indo-Pak war of 1965? Most possibly, Nepal took it as an opportunity to manifest its strategic autonomy, and flaunt New Delhi how Kathmandu could maintain friendly and close relations with India’s two unfriendly neighbors, even during the time of war. Cloaking hedging inside neutrality, Nepal repudiated India’s

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claim that “New Delhi would consider Nepal’s friends as her friends and Nepal’s enemies as her enemies” (Table 4.3). Nepal’s approach to the 1971 Bangladesh liberation war, and to the emergence of Bangladesh, was mixed. Recognizing Bangladesh was a daunting task for Kathmandu, as Nepal had good and friendly relations with Pakistan (out of which Bangladesh was created) and with China, (whose efforts to thwart the disintegration of Pakistan couldn’t yield any results), and also with India and Soviet Union (whose support towards the dismemberment of Pakistan by brewing political crisis in East Pakistan is well documented). Against the backdrop of the same political crisis, King Mahendra had hosted Pakistani President Agha Mohammad Yahya Khan in 1970 in Kathmandu, where both agreed that “one of the greatest dangers to world peace was the direct or indirect interference in the internal affairs of a country by outsiders” (Joint Communique, 1970). Henry Kissinger, too, had understood New Delhi’s determination to exploit the crisis in East Pakistan for the purpose of demonstrating India’s preeminence in the region. Kissinger writes, “I had no doubt that we were now witnessing the beginning of an India-Pakistan war and that India had started it. Despite popular myths, large military units do not fight by accident; some command sets them in motion…But what had caused the war, in Nixon’s view (and mine) went beyond the refugee problem; it was India’s determination to use the crisis to establish its preeminence on the subcontinent” (Kissinger, 1979). Nepal didn’t hurried to recognize Bangladesh. She had to be really meticulous about the timing. Neither too quick that offend Pakistan, nor too late to vex the leaders of the new country. While responding to the regional crises, strategically-placed countries like Nepal find it difficult to align with one side or maintain effective neutrality. Merger of Sikkim into the Indian Union in 1974 was another theatrical development that further alarmed Nepal, and posed insecurity to the Himalayan countries like Nepal and Bhutan. The Sikkim episode intensified Kathmandu’s fear of Indian support to the anti-Monarchy and democratic forces in Nepal. Because, the Nepali Congress had extended its support to Sikkim Congress, while Nepali Monarch stood in favor of monarchy in Sikkim (Muni, 1992). The anti-Indian demonstration took place in Kathmandu, and protesters surrounded the embassy (Thapliyal, 1998). Because of the tense situation, India had to recall its embassy officials to Delhi for a month (Nath, 1975). Nepal’s Foreign Minister Gyanendra Karki stated that the protests were targeted against external

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Table 4.3 Major events influencing Nepal’s claim to neutrality Major regional developments

Nature of Nepal’s claims to neutrality

Impacts on Nepal’s national interest

China’s takeover of Tibet

Ambiguous

1962 Sino-Indian War

Implausible

1965 India-Pakistan War 1971 Bangladeshi Liberation War

Polysemantic Mixed

Integration of Sikkim into Indian Union

Alarming

Kargil war of 1999

Polysemantic

2017 Doklam crisis

Flimsy

2020 Galwan crisis

Unconvincing

Impacted the work and livelihood of Newari merchants from Nepal to Lhasa, who had helped shape the culture of trans-Himalayan trade; Nepal became a frontline state to communist China exasperating Nepal’s small state syndrome; Impacted regional security and regional peace with the beginning of the arms race and securitization of the foreign policy responses of India and China towards small countries in South Asia; Diplomatic dilemma; Recognizing Bangladesh came as a challenge against the backdrop of Nepal’s friendly relations with Pakistan and China; Insecurity to tiny Himalayan states like Nepal and Bhutan; Impacted SAARC and hopes and aspirations for regional development; A lesson for Nepal’s unresolved border disputes with India amidst China’s increasing presence in the Himalayan region; Worsened Nepal’s relations with India as Galwan crisis coincided with Nepal-India border problems;

Source Tabulated by author after analyzing the major events

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interference in the internal affairs of the independent countries. New Delhi didn’t rule out the possibility of the Chinese embassy’s support to anti-Indian demonstrators in Kathmandu (Thapliyal, 1998). Because New Delhi generally refers to the exploitation of Nepal’s deep sense of insecurity from India by Pakistan and China to encourage Kathmandu in reducing its dependence on southern neighbor (Muni, 1984). While the Sikkim episode worsened Nepal’s security concerns, the 1999 Kargil war between India and Pakistan made the future of the South Asian Association for Regional Cooperation (SAARC) uncertain, jeopardizing the hopes and aspirations of the countries like Nepal from the regional entity. The unending rivalry between India and Pakistan has made SAARC a hostage. In none of the hostilities, including the Sino-Indian conflict or the India-Pakistan war, Nepal cannot afford to take sides. However, its neutrality is looked up with suspicion, not only because of the recruitment of the Nepali youths in the Indian army, but more because of the way they are deployed on the frontline during India’s border war with both, China and Pakistan. But the post-conflict Nepal doesn’t miss any opportunities to highlight its interest in mediating the Indo-Pak dispute for revitalizing SAARC (Bhattacherjee, 2020). During the 2017 military standoff between China and India in Doklam, Nepal called both of its immediate neighbors to resolve the problems through peaceful dialogue and diplomacy for regional peace, and assured them that Kathmandu won’t take sides. While the standoff was underway, Indian External Affairs Minister Sushma Swaraj attended the ministerial meeting of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in Kathmandu. While India and China were yet to agree on disengagement of their troops in Doklam, Chinese Vice Premier Wang Yang had visited Nepal. Prime Minister Sher Bahadur himself visited India in the background of two nuclear power locking their horns in the Himalayan kingdom of Bhutan. The message conveyed by these high-level visits could be interpreted variously. But, one message was quite loud, clear, and easily perceptible: while the Doklam standoff was still underway, Nepal made a foreign policy shift towards China in a flimsy manner being lured by the China-led BRI projects, which signaled Kathmandu’s renewed readiness to move away from Indian sphere of influence. While India strongly opposed the BRI projects, China and Nepal were discussing the trans-Himalayan railway project connecting both the countries via land. The 70-day long standoff in the tri-boundary between China, India, and Bhutan made Nepal realize the possibility of

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being caught in the Sino-Indian rivalry owing to its strategic geography, small size, and dependent economy. While India sided with Bhutan against China’s road construction in the trijunction in 2017, New Delhi itself initiated a road construction in the disputed territory with Nepal in the May of 2020 to reach Kailash Mansarovar in Tibet. China protested India’s “unilateral” move. As IndiaNepal border problems in the Himalayas coincided with Sino-Indian border skirmishes in the Galwan valley that led to the lethal clash between them in the last 45 years, Nepal’s neutrality was severely disparaged by India. Even though India and China had several standoffs along the Line of Actual Control (LAC) in different periods of time, the last time Indian soldiers had lost their lives was in the 1975 Arunachal ambush. Nepal’s neutrality and non-alignment were questioned by India, when the ruling Nepal communist party leaders held a virtual workshop with the leaders of the Chinese communist party at the time when the two nuclear powers were fighting with stones in Galwan. New Delhi perceived it as an act of geopolitical ambition displayed by Nepal to derive benefits from the Sion-Indian conflict and wasn’t convincing. Although it took a long time for Nepal-India relations to come back to normalcy, Sino-Indian relations have not shown any sign of improvement. All these details indicate Nepal has employed miscellaneous strategies in the name of neutrality. It also makes geostrategists, security analysts and foreign policy experts realize how Kathmandu hasn’t been able to draw a clear distinction between different kinds of strategies it has been pursuing including, balancing, hedging, and coping. Rather, they have been cloaked in, what is described as neutrality by the power elites in Kathmandu. The policy of maintaining equidistance between China and India is all about “balancing,” which doesn’t help neutrality to evolve. Similarly, non-aligned foreign policy (which is of more recent origin than neutrality that developed in Europe in the eighteenth and nineteenth century) to which Nepal adheres, avowedly intends to resist the bloc politics triggered by the great power rivalry. There have been instances of NAM member countries waging wars; but a neutral country, both, legally and politically, intends to avoid being drawn into a conflict or war. The non-alignment foreign policy is also perceived as an act of balancing. After all, it was used as an instrument of resistance to bloc politics during the Cold War. Nepal has not been able to tell the world clealry, which neutrality it exercises, legal or political? permanent or temporary? And

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because of Nepal’s failure to communicate to the international community through its foreign policy behavior about the nature and scope of its neutrality, Kathmandu’s claim to neutrality is perceived as a coping strategy in the context of the rise of China. European experience shows that neutrality was quite normal in the past; but today, neutrality is exceptional (Windsor, 1989). Although neutrality evolved as both, policy and practice, during the Cold War to deal with the bipolar international system and strategic milieu induced by the North Atlantic Treaty Organization (NATO) and Warsaw Pact. The end of the Cold War made neutrality not only rare, but almost extinct in the context of increasing European integration and unprecedented global changes. But, with the outbreak of the Crimea crisis in 2014, the significance of neutrality resurfaced in global and regional politics (Kissinger, 2014). During the Cold War period, the nature of neutrality varied from one country to the other, depending on a country’s political, geostrategic, historical, economic, and cultural conditions. Introduced in Europe during the eighteenth century, the term “neutrality” comes from the Latin neuter which means “neither of two” and fundamentally meant non-involvement in a war between countries. Neutrality has two dimensions: political and legal. The legal aspect of neutrality was formally discussed in the Hague Convention of 1907, which introduced the conduct of neutral states during the time of war. The most significant aspect of the set of rules outlined in the Hague Convention is a “neutral state’s right to the inviolability of its territory and a respect for the integrity of its neutral status by warring states” (Fischer et al., 2017). As per the principle of abstention, the neutral state shouldn’t offer any kind of military support to belligerents and must impede any kinds of military activities by the warring parties in its territories. Here, it needs to be remembered that while Prime Minister Tanka Prasad Acharya in 1956 was emphasizing Nepal’s neutrality by stating, “We must develop neutrality under which Nepal will be able to serve the cause of peace and afford sympathy for the oppressed,” Indian military mission was already operational in Nepal. The aim of the mission was not only limited to modernize Nepali Army. Indian soldiers were also stationed on Nepal’s borders with Tibet. Thus, the intent was also to prevent the probable Chinese aggression following the takeover of Tibet. Acharya’s statement remains more relevant in Nepal’s foreign policy beyond the neighborhood, particularly on the issue of Hungary brought before the United Nation’s General Assembly in 1956, when Nepal became critical of Soviet

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action and for the first time didn’t cast vote with India, illustrating its independent foreign policy (Khanal, 1964). Occasional neutrality, (which is more ad-hoc or temporary) and permanent neutrality, (which is continuous and everlasting) should also be understood from the perspective of international law. When a country declares its neutrality in a particular war for a certain duration, it is occasional neutrality. Although the Nepali state has refused to take sides in the Sino-Indian and Indo-Pak wars, recruitment of Nepali nationals in the Indian army has raised the question over Nepal’s attempt to neutrality. On the other hand, a permanently neutral state commits its neutrality in future wars too, as Austria did with a declaration in 1955 that has been internationaly recognized, and similar is the case of Switzerland, following an agreement with great powers in 1815 at the Congress of Vienna. Nevertheless, the neutrality exhibited by Finland and Sweden has neither domestic nor international treaty obligations. Rather, it is their unilateral commitment, which is echoed only in the foreign policy behaviors, and as such is “de facto permanent neutrality”. Nepal’s claim to neutrality is closer to that of Finnish and Swedish status. However, states may abandon this kind of neutrality anytime. Although rights and obligations of an occasionally neutral and permanently neutral state may not be clearly distinguished during the time of war, the latter needs to embrace the legalities outlined by the Hague Conventions strictly in peacetime and restrict its foreign policy as directed by the political dimension of neutrality. Even if political neutrality is grounded on the practices and customs, instead of law, it incorporates all the methods necessary to bolster and shield the laws of neutrality. According to Jurg Martin Gabriel, “To an occasionally neutral country, neutrality helps in preventing being drawn into a particular ongoing conflict. For a permanently neutral state, the implications are broader, as it should do nothing to undermine the practicability and credibility of its neutrality in a future war. Therefore, a permanently neutral state shouldn’t enter into peacetime alliance or permit the establishment of foreign military bases on its soil” (Gabriel, 2002). Embracing legal and political neutrality doesn’t necessitate the nationals of a neutral state to follow any kind of specific ideology. During the Cold War, none of the European neutrals remained ideologically neutral, as they had cultural proximity with the West and are fascinated by liberal values and a free-market economy.

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In the Nepali context, failure to distinguish neutrality against nonalignment has also affixed normative challenges to Nepal’s difficulty of being neutral. Unlike neutrality, non-alignment is not based on any neutral rights and duties, although both share an obligation to remain outside of the Cold War bloc politics. Permanent neutrality is not expected from those non-aligned countries, which have resorted to wars to fulfill their national interests. The preparatory meeting of NAM’s first conference in 1961 unveiled the criteria for a non-aligned country as: “A nonaligned country should adopt an independent foreign policy based on co-existence of states with different political and social systems…such a state must not be a member of a multilateral military alliance concluded in the context of the Great Power conflict; if it has a bilateral military agreement with a Great Power or if it is a member of a regional defense pact, such an agreement or pact should not be deliberately concluded in the context of the Great Power conflicts”. Although Nepal intends to exercise independent foreign policy as one of the founding members of NAM, Kathmandu’s balancing strategy between India, China, and the western powers has made Nepal lose its credibility. While the new world order hasn’t entirely emerged, and the existing world order has confronted noticeable challenges amidst the establishment of various strategic partnerships and alliances including QUAD, Indo-Pacific Strategy, AUKUS, Build Back Better World (B3W) to contain the rise of China, it’s unavoidable for Nepal to tread meticulously and in a convincing manner, instead of exploiting NAM as a coping strategy. But, to do that, Kathmandu must be able to persuade the international community regarding the ingenuity of its non-alignment and exaggerate its plausible difference with neutrality. There is a erroneous tendency in Nepal to comprehend neutrality largely in the context of the Zone of Peace proposal that King Birendra introduced in 1975, which couldn’t gather momentum, not only because of Kathmandu’s failure to secure New Delhi’s support in getting it endorsed in the United Nations, but more because of the way Nepali leaders dropped this idea following the political change of 1990, and started to emphasize on equidistance foreign policy. However, it should be clearly understood that ZOP didn’t indicate Nepal’s interest to transform its non-aligned status into a neutral state along the Swiss lines. The objective of Birendra’s proposal was to institutionalize peace without abandoning its active role in international affairs. Thus, it is important for Nepal to develop a conceptual clarity regarding what kind of neutrality the

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Himalayan country desires to pursue. Most pressing need of the hour is to develop the institutional abilities of the foreign policy research institutions in distinguishing neutrality against non-alignment in Nepal’s foreign policy agendas and foreign policy behaviors. Even if Kathmandu is willing to develop a neutral foreign policy over some regional and international events, it needs to send a clear message to the world about its occasional neutrality, instead of coalescing it with non-alignment, which will only tarnish Nepal’s image abroad. Confusing one with the other may not be only a small state syndrome, but a distinctive feature of the country that is deprived of a knowledgebased foreign policy approach. Nepal government has established various research centers to study foreign policy and diplomacy since the late 1940s, starting with the Nepal Council of World Affairs in 1948, the Institute of Nepal Studies established in 1969 (which was renamed as the Institute of Nepal and Asian Studies in 1972), Institute of Foreign Affairs established in 1993. Equally, non-governmental institutions researching Nepal’s foreign policy and diplomacy flourished after 1990. Although they have organized conferences, published books, and academic journals on different dimensions of Nepal’s foreign policy and diplomacy, none of them have initiated any debates on Nepal’s claim to neutrality or have earnestly presented ways to differentiate Nepal’s claim to neutrality with its status of non-alignment. Both, academic and policy research on Nepal’s foreign policy objectives are rare. Nepal’s foreign policy objectives are constitutionally entrusted to conduct Nepal’s external relations by adhering to the Charter of the United Nations, non-alignment, principles of Panchasheel, international law, and the norms of world peace. But, if we look at the trend of the research and publication done by the governmental and non-governmental foreign policy think tanks, it’s more confined to geopolitics, security threats, neighborhood, great powers, SAARC among others. Nepal-UN relations haven’t been adequately explored. Research on non-alignment is limited to documenting the speeches of leaders and kings attending NAM conferences. Inquiry on Panchasheel is restricted to listing the five principles of peaceful co-existence. Discussions on the significance of international law for Nepal arise only when the border problems with India resurface, and its importance is overlooked so easily with the passage of time. Any investigation on the matter of world peace is limited to glorifying Nepal’s peacekeeping mission abroad. Nepal’s foreign policy formulation and enactment haven’t embraced a knowledge-based approach to bring about

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a kind of convergence in its policies and practices. Such a convergence in its foreign policy agendas, priorities, objectives and behaviors remains more sustainable, justifiable, workable, and unavoidable, if Nepal could contrive required foreign policy institutions, strategies and responses to pursue the sustenance strategy.

Survival, Sustenance, and Success With inescapable changes at the internal and external fronts, a country’s national interest varies. Thus, Cold War survival strategies alone may not be sufficient to fulfill new and varying contemporary needs. Thus, embracing a sustenance strategy is advantageous for Nepal. Because the world we live in today is fundamentally different from the world seventy or fifty years ago. Human mobility, the internet, information technology, global trade has significantly transformed the world further, and small countries in the world are taking advantage of the new vistas of opportunities offered by globalization, international trade, and open borders. We are not living in the age of Morgenthau anymore. In today’s world, equating bigness or a country’s size with success would be a failure. Rather, we are living in the age of the market, where “not all the big countries are successful and not all successful countries are big” (Koh, 2019). Today, size of a country is perceived as not the only factor influencing a country’s failure or success. What considerably matters is the policies and strategies a country pursues and the values it endorses. For Nepal, the best sustenance policy is to extend its participation in the multilateral forum by supporting the cause of international cooperation and regional stability. In the context of Nepal’s claim to neutrality, it would be more pragmatic and expedient if Kathmandu could deploy it to attract foreign direct investment instead of making failed attempts in using neutrality as a mere balancing strategy. In different junctures of history, the pressures exerted by Sino-Indian rivalry and a sense of regional insecurity, to a great degree, stimulated Nepal’s claims to neutrality. But, because of Nepal’s conceptual dilemma and foreign policy divergence, such claims are often questioned by its neighbors, particularly India. China, however, perceives such claims as Nepal’s balancing strategy. Although the economic rise of India and China is sporadically projected as paving way to an Asian Century, the border conflict between them has jeopardized such expectations. Saddest of all, the small countries located in their vicinity can only await the

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two nuclear powers to renegotiate their disputes. Until then, the only option available to them is to deal separately with them. But, while dealing separately, countries may start balancing one against the other, and the Sino-India conflict may embolden a sense of geopolitical ambition in them. Countries like Nepal may hide such ambitions in the cloak of their claim to neutrality. Such are the characteristics of the cold war survival strategy pursued by the small states. But, today’s age of globalization is different. Accountable and transparent foreign policy behaviors are expected from the countries because interdependence and reciprocity cannot take place amidst a trust deficit. The absence of transparency in bilateral relations and regional politics may augment security dilemmas and turn the relations between the countries anarchical and tumultuous. For Nepal, which is located between two rival countries, it is important to introduce innovation and novelty in its foreign policy and diplomacy so that the landlocked country won’t be forlornly entrapped in Sino-Indian rivalry. Upon the same realization, Nepal came up with an integrated foreign policy on December 6, 2020, in the context of the new changes that were taking place at the regional and international levels. Although the policy was criticized for not having required consultation with the political parties and foreign policy experts, it fulfilled the lack of an integrated foreign policy document (IFA, 2021). Before it was unveiled, issues on Nepal’s foreign policy were scattered in different documents, including the constitution, speeches of prime ministers, national security policy, annual budgets. Although Nepal’s integrated foreign policy has emphasized undertaking various foreign policy measures including multidimensional connectivity with neighbors, promotion of soft power and public diplomacy, exercising track II diplomacy, and strengthening labor diplomacy, the deficiency of required manpower along with dearth of training to the available career and professional diplomats may pose a grave challenge to its implementation. The integrated policy is crucial not only for Nepal but also for its neighboring countries and development partners to get acquainted with Nepal’s integrated foreign policy objectives. But, a lack of an effective mechanism to accomplish it may not be rewarding if Nepal is disposed to upgrade Nepal’s hackneyed survival strategy to the worthwhile strategy of sustenance. Because, sustenance strategies are not devised only for domestic political consumption or merely for the image projection of a government (Baral, 2021) like the survival strategies, which are soon suspended and adjourned, as the fate of the policy of “special relations” with India or Zone of Peace Proposal

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or even non-alignment. Any diplomatic accomplishment requires effective communication of foreign policy objectives and suitable strategies to attain them. As long as Nepal’s foreign policy behavior suffers from geopolitical ambitions, ad-hocism, uncertainties, lack of policy continuity, and dearth of effective implementation of short-term and long-term policies, Kathmandu won’t be able to formulate and implement the sustenance strategies. Until Nepal’s claim to neutrality is conventionally driven by the silhouettes of the geopolitical realities directing a leader’s psychology, it won’t be able to escape the clutches of the survival strategies. Even though globalization moderately offers such an escape toward strategy of sustenance, small counties also need to concurrently formulate strategies to mitigate the negative impacts of globalization. Today, Singapore in South-East Asia offers cost-effective quality healthcare for its citizens. Israel in the Middle East has established a start-up ecosystem rivaling Silicon Valley. Finland in Europe has significantly transformed its primary education system. Bhutan’s efforts towards environmental protection display its unrivaled political will. Irrespective of their size, Suriname and Panama have set examples in implementing sustainable energy. Across the world, small countries have invented specific policies, strategies, and institutions to make sustainable changes possible (Breiding, 2019). Thus, Nepal needs to understand that just having the emerging economies in the neighborhood won’t be sufficient for its overall development until the required and adequate institutions aren’t built. Even from the perspective of connectivity, developed Chinese and Indian cities are quite far away from Nepal’s borders. Thus, to materialize the spirit of multidimensional connectivity with its neighbors, as envisioned by the integrated foreign policy of Nepal, building connectivity infrastructure is a prerequisite. With the necessitated connectivity infrastructure and institutions, it is indispensable to promote economic diplomacy, which however shouldn’t restrict itself in capitalizing on transit diplomacy with its two neighbors, as New Delhi has already harbored reluctance over the proposal of bridging India and China. Kathmandu, too, hasn’t been able to convince its immediate neighbors that Nepal doesn’t view transit diplomacy as a strategic concept but purely as an economic and socio-cultural phenomenon. Still, the policy of diversification through economic diplomacy cannot be refuted, which doesn’t prevent an outbreak of conflict but plays a central role in lessening the geopolitical risks for small countries located between the conflicting parties, through tourism, remittance, and development cooperation in the Nepali context.

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Back in 1996, while economic globalization was on its doorsteps, Nepal government’s high-level task force suggested making Nepal’s economic diplomacy robust and effective through trade, tourism, remittance, and investment by stretching one’s wings from aid diplomacy, on which landlocked Nepal heavily relied upon during the Cold War period. After joining World Trade Organization in 2004, although funds have been channeled to Nepali diplomatic missions abroad to exercise economic diplomacy, Kathmandu is yet to associate its economic diplomacy with the wider economic goals that Nepal pursue in becoming a middle-income developing country (Acharya, 2022). As a result, Nepal’s foreign trade endures an increasing trade deficit, although certain measures were announced to diversify trade after the 2015 blockade which made Nepal realize its excessive dependence on India for trade and transit. But, even after six years, not much has changed as dependence on India continues and has even increased. Today, over 60% of Nepal’s total imports are from India, which also receives 81. 76% of Nepal’s total exports. A year before the blockade in 2014, out of its total trade, Nepal’s trade with India was 63.7% (TEPC, 2020). While the blockade was underway, Nepal Rastra Bank, the central bank of Nepal had stated in its report “Impact of Unofficial Indian Embargo on Nepal,” that Nepal’s failure to develop itself as a self-reliant economy made landlocked Nepal unable to withstand the third Indian blockade on Nepal. The report also emphasized that Nepal didn’t learn any lesson from the past two blockades imposed in 1970 and 1988–1989 (NRB, 2015). In 1989, Nepal’s trade with India stood at 34.3% while it reached 63.7% in 2015 indicating Nepal’s increasing dependence on its southern neighbor for trade and transit (NRB, 2015). In the wake of the Indian blockade, the Oli administration in Nepal signed several trade, transit, and transportation agreements with China, as an attempt to diversify Nepal’s trade. Discussions, too, surfaced about connecting Nepal with China through rails and roads. Today, railway projects have gathered no momentum. The serpentine queues of vehicles in the petrol pumps across the country triggered by lack of sufficient fuel had obliged Nepali Oli Corporation to ink a memorandum of understanding with Petro China to import petroleum products. As part of the agreement, Nepal received 1.2 million liters of fuel from China. But, as soon as the fuel supply resumed from the Indian side, the issue of importing fuel from China couldn’t sustain, chiefly because of the geographical impediments and lack of required infrastructure, as earthquake-ravaged connectivity infrastructures at Nepal-China

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border point in Tatopani were yet to be repaired. Even though the trade with China via Kerung-Rasuwagadi resumed after 2016, it was significantly less in comparison with that of India. As a result, Nepal’s excessive dependence on India proliferated challenging Nepal’s policy of trade diversification and economic diplomacy programs. Nepal’s failure in conducting economic diplomacy as a sustenance strategy lies in the manner of availing it as a geopolitical tool to buttress its act of balancing. Nepal’s recent trade and transit diversification by signing agreements with Beijing was the upshot of Kathmandu’s frustration against Indian influence in Nepal and a search for strategic autonomy. Using economic diplomacy to fulfill its geopolitical interest in the neighborhood not only inhibits Nepal from diversifying its exports through manufacturing, branding, and marketing of the goods, but the Himalayan country hasn’t been able to draw benefits from its access to the duty-free markets. Despite having the potential of exporting 12 times its current annual exports, Nepal hasn’t been able to boost its exports (World Bank, 2021). As part of China’s assurance to provide duty-free treatment for the Least Developed Countries (LDCs), Beijing doesn’t impose a duty on over 8,000 goods imported from Nepal. But, despite the prospect of boosting its exports to China, Nepal’s export to its northern neighbor has been insignificant. In 2020, Nepal’s exported goods to China stood at Nepali Rupee 1 billion (TEPC, 2020). Once Nepal gets graduated to the list of a developing country, Nepal may not get such special treatment anymore, which may further increase Nepal’s dependency on India. Even the US has been providing duty-free market access for 77 types of garment products until 2025 after Nepal’s economy was ravaged by the 2015 earthquakes. Unfortunately, Nepal’s garment export to the US has been dwindling. Nepal’s garment exports stood at Rs. 1.57 billion in 2015 that sank to 1.31 billion in 2020. To Nepal, the US is the second largest export destination after India. But, only goods worth Rs. 13.79 billion were exported to the US in 2020. Nepal’s inability to produce as per the market demands and its failure in supplying goods in large quantities clearly suggests how Nepal is cashing in on China’s trans-Himalayan railway as a mere geopolitical move. But, Kathmandu’s helplessness in manufacturing goods as per the demands may send the rail empty. Kathmandu’s failure in diversifying its products and market has impeded its exports beyond the neighborhood too. Paucity of desired and indispensable diplomatic attempts for boosting exports has exposed the lack of innovation and creativity in Nepal’s

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economic diplomacy. Nepal is not prepared to increase its exports despite duty-free market access under the European Union’s Generalized System of Preference (GSP). Similarly, while Nepal imports goods from South American countries, its exports to Argentina and Brazil are trivial. As Nepal’s trade with third countries has shrunk and its economy is excessively dependent on India, any move that Kathmandu makes towards Beijing should be understood as its ultimate desire is to draw more from New Delhi. Because, Kathmandu is quite aware of the fact that India will go to any extent in preventing Chinese influence in Nepal. Nepal’s pegged currency and stability in exchange rate with its southern neighbor has also led to increased import from India even if the pegged system has saved Nepal’s economy from external unpredictability. In the last few decades, Nepal’s currency has been extremely devalued against the US dollar. It was less than Rs. 50 per dollar in early 1990 while it stands at Rs. 123 today. But, with India, because of the stable exchange system, it has always been Rs. 1.6 for Indian Rupee since 1993. Consequently, goods coming from the third countries get more expensive than the goods imported from India, resulting into increased imports from the southern neighbor. While Nepal remains economically dependent on India, Kathmandu’s sporadic crawl towards Beijing in different periods of time since 1956 has been fleeting yet recurrent, ephemeral but replicating. But, China’s economic ambition and political clout in Nepal has increased which is perceptible through the ways Beijing has got Nepal to endorse its perception of Hong Kong, Tibet, Xinjing, and most importantly on COVID-19 pandemic. But there are several instances to prove how India and Chinese interests have faced impediments in Nepal. For instance, India’s unofficial blockade on Nepal made New Delhi not only unpopular but also generated an environment for Kathmandu to crawl towards the North. In 2020, China too faced a setback flowing the split in Nepal Communist Party, on which China had invested much, deeming Nepali communist parties are the reliable partner. The 2019 visit of the Chinese President Xi Jinping to Nepal attempted to establish fraternal relations between the Nepal Communist Party and the Communist Party of China, and the trainings imparted to cadres of Nepal Communist Party on Xi Jinping Thought, testify the same. While China and India are vying for their influence in Nepal’s political spectrum and economic sphere, Kathmandu views everything geopolitically ranging from foreign aid to trade, from policy diversification

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to connectivity infrastructure, from economic diplomacy to development partners. A geopolitical worldview often demands the continuity of the conventional survival strategies, particularly balancing, in the Nepali context. Therefore, unless leadership in Nepal develops a capability to abandon the uncalculated usages of survival strategies in its neighborhood foreign policy, Kathmandu remains handcuffed to policy failure in the absence of materializing the sustenance strategy. As such, Nepal’s attempt to neutrality will always be reckoned as an act of hedging. Even though absolute neutrality is not feasible and within reach, mere survival strategies, including appeasement policy will superfluously revitalize the Cold War strategies and antagonize the societies, cultures, and civilizations. Intricate geostrategic milieu coalesced with brittle internal politics has often compelled the political leadership in Nepal to appease its two neighbors. Some orient their foreign policy behavior to appease one at a time, either Beijing or New Delhi, while others go for twofold appeasement (both the neighbors at the same time). The first case is aimed usually to protect one’s government back home, while in the second case, geopolitical vulnerabilities too play the role. In his 2017 India visit, Nepal’s Prime Minister Sher Bahadur Deuba assured New Delhi of amending the new constitution to accommodate Indian interests in the statute so that he could prolong his stay in the government. When Deuba outrightly told his Indian counterpart of his failed attempt to amend the constitution because of the lack of two-thirds parliamentary majority, he was heavily criticized by Kathmandu-based foreign policy experts for unnecessarily hauling purely internal issues in the bilateral meeting. It was understandable that Deuba was not in a mood to anger New Delhi which had already imposed a blockade on Nepal following its reservation over Nepal’s new constitution. Thus, appeasing Indian leadership was inevitable for him to protect his government. Deuba, however, appeared a different man when he was addressing the World Leaders Forum at Columbia University on September 21, 2017 because he was defending the same constitution, which he was supposed to amend as pledged to the Indian leadership. Unlike in New Delhi, Deuba spoke quite confidently about Nepal’s sovereign foreign policy goals at Columbia University. When he stated, “In pursuing independent foreign policy, Nepal judges every issue on its merits without fear or favor,” we could only understand how Nepal’s appeasement policy is increasingly limited to the neighborhood. Twofold appeasement is more than protecting your government, however; as it also takes note of the changing dynamics of regional

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geopolitics. Nepal’s claim to neutrality over the Doklam standoff in 2017 was an apt example of appeasing both the neighbors at once. As such, the twofold appeasement is a coping strategy in the context of the Sino-Indian rivalry. Although the former Prime Minister of Nepal, Pushpa Kamal Dahal, tried to appease both the Indian leadership and Chinese leadership at once with the proposal of ‘trilateralism,’ India’s reservation over the proposal couldn’t make the strategy of twofold appeasement fruitful. Today, the foreign policy priorities, strategic interests and security concerns of Nepal’s two immediate neighbors have varied, or let’s say quite conflicting. Thus, Nepal faces a geopolitical dilemma to balance them. Because, when it tries to address one neighbor’s priorities and interests, the concerns and issues of the other neighbor might go unheeded. So, how should Nepal proceed, amidst its inability to exercise the strategy of sustenance? For how long Nepal’s foreign policy objectives will endure the survival strategies? Will the policy of equidistance be of any help to address the conflicting interests of the powerful neighbors? While India hasn’t joined China-Belt and Road Initiative (BRI), Nepal has joined it. When Nepal promulgated its new constitution, Beijing welcomed it and New Delhi took note of it with a blockade. While Indian projects in Nepal face delays and procrastinations, Chinese projects are completed relatively faster. While Chinese aids and FDIs are increasing in Nepal, Indian economic assistance is dwindling. As China claim to pierce Nepal’s Himalayas with the connectivity projects, India takes refuge in its Himalayan frontier. Their incompatibility in terms of security concerns is more visible from the way India accommodates the Tibetan Government in Exile in its land, while Nepal gets Chinese aid for curbing all kinds of anti-China protests organized by Tibetan refugees residing in Nepal. In such an adverse context, Nepal often takes refuge in an equidistance policy. But every country has a sovereign right to cherry-pick what is best suited for its growth and development. Now, when Nepal considers China as a counterweight to Indian influence in Nepal, equidistance survives only a concept that can’t be practically applied even as a survival strategy. Because it is more relevant in a bipolar world. In today’s multipolar world, it seeks an exhaustive and thorough revision as all other survival strategies need to undergo, so that they could be eventually ameliorated and upgraded to the form of sustenance strategies fulfilling the contemporary requirements of statecraft in dealing with the external world.

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References Acharya, M. R. (2022). Broadening choices for Nepal through economic diplomacy. In C. D. Bhatta & J. Menge (Eds.), Gaida’s dance with tiger and dragon. Friedrich-Ebert-Stiftung. Aditya, A. (2021). Regime capability and relational stakes in the emerging world order. Journal of Foreign Affairs, 1(1), 1–36. Anderson, E. W. (1998). The effects of globalization on geopolitical perspectives. GeoJournal, 45(1/2), 105–108. http://www.jstor.org/stable/411 47225 Aunesluoma, J., & Rainio-Niemi, J. (2016). Neutrality as identity?: Finland’s quest for security in the Cold War. Journal of Cold War Studies, 18(4), 51–78. https://www.jstor.org/stable/26925640 Baral, L. R. (2021, June 21). Nepal’s foreign policy failure. The Kathmandu Post. Bhattacherjee, K. (2020). Nepal can mediate between India and Pakistan: Kathmandu. The Hindu. https://www.thehindu.com/news/international/nepalcan-mediate-between-india-and-pakistan-kathmandu/article30651187.ece Bhattarai, G. (2017, March 7). OBOR: Economic or strategic. Republica. https://myrepublica.nagariknetwork.com/news/15973/ Bhattarai, G. (2018, February 22). Beyond neighborhood. Republica. https:// myrepublica.nagariknetwork.com/news/beyond-neighborhood/ Binter, J. (1985). The actual and potential role of neutrality: In search of peace and security. Bulletin of Peace Proposals, 16(4), 387–398. http://www.jstor. org/stable/44481210 Bobbitt, P. (2003, January 17). Marketing the future of the state. The New Statesman. Breiding, R. J. (2019). Too small to fail. Harper Business. Clarke, M. (2017). The belt and road initiative: China’s new grand strategy? Asia Policy, 24, 71–79. https://www.jstor.org/stable/26403204 Embassy of India. (n.d.). About development partnership. https://www.indemb kathmandu.gov.in/page/about-development-partnership/ Fischer, T., Aunesluoma, J., & Makko, A. (2017). Neutrality and non-alignment in world politics during the Cold War. Journal of Cold War Studies, 18(4), 4–11. Gabriel, J. M. (2002). The American conception of neutrality after 1941. Palgrave Macmillan. Giri, A. (2021, January 5). China’s foreign aid agency is all set to make foray into Nepal’s northern region. The Kathmandu Post. https://kathmandupost. com/national/2021/01/05/china-s-foreign-aid-agency-is-all-set-to-makeforay-into-nepal-s-northern-region Husain, A. (1979). Conflict in Asia (pp. 34–35). Classical Publications.

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Institute of Foreign Affairs (IFA). (2021). Reflections on Nepal’s foreign policy2077 . Joint Communique. (1970). Joint Communique issued during the visit of Pakistani President Agha Mohammad Yahya Khan to Nepal. Khadga, K. C., & Bhattarai, G. (2018). Nepal’s search for prosperity through transit diplomacy. Journal of International Affairs, 2(1), 75–96. Khadka, N. (1997). Foreign aid to Nepal: Donor motivations in the post-Cold War period. Asian Survey, 37 (11), 1044–1061. https://doi.org/10.2307/ 2645740 Khanal, Y. N. (1964). Background of Nepal’s foreign policy (p. 7). Department of Publicity, HMG. Khobragade, V. (2016). India–Nepal relations: Engagement and estrangement. World Affairs: The Journal of International Issues, 20(3), 146–163. https://www.jstor.org/stable/48505299 Kissinger, H. (1979). White house years. Little Brown and Company, Canada Limited. Kissinger, H. (2014, March 5). To settle Ukraine crisis, start at the end. The Washington Post. Koh, T. (2019). Foreword. In R. J. Breiding, Too small to fail. Harper Business Koshi Anchal. (1965, September 13). Dharan. Maniruzzaman, T. (1982). Security of small states in third world (p. 26). Canberra Papers on Strategy and Defense, No. 25. McCarthy, D. R., & Fluck, M. (2016). The concept of transparency in International Relations: Towards a critical approach. European Journal of International Relations, 23(2), 416–440. https://doi.org/10.1177/135406 6116651688 Mihaly, E. B. (2009). Foreign aid and politics in Nepal. Himal Books. Ministry of Foreign Affairs (MoFA). (n.d.). Nepal-China relations. Ministry of Foreign Affairs Government of Nepal. Ministry of Industry, Commerce and Supplies (MoICS). (2019). Products from Nepal: A handbook of major export potentials of Nepal. Government of Nepal. Mishra, M. K. (2020). India in the Himalayan landscape: Security concerns and approaches. World Affairs: The Journal of International Issues, 24(3), 20–41. https://www.jstor.org/stable/48590641 Motherland. (1965, September 16). Nepal. Muni, S. D. (1984). Nepal as a zone of peace. Strategic Analysis, 7 (10). https:// doi.org/10.1080/09700168409428645 Muni, S. D. (1992). India and Nepal: A changing relationship (p. 70). Konark Publishers. Nath, T. (1975). The Nepalese Dilemma 1960–74 (p. 476). Sterling Publishers. Nepal Press Digest. (1963, February 4–10), p. 694.

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Nepal Rastra Bank (NRB). (2015). Impact of unofficial Indian embargo on Nepal. Nepal Rastra Bank. Rae, R. (2021). Kathmandu dilemma resetting India-Nepal ties (pp. 3–12). Penguin Random House India. Ramakant. (1994). Nepal’s China policy. China Report. Sage. Rana, M. S. (2013). China meets India in Nepal: A historical and future perspective. Indian Journal of Asian Affairs, 26(1/2), 59–73. http://www.jstor. org/stable/43550356 Regmi, M. C. (1999). Imperial Gurkha. Adroit Publishers. Rose, L. E. (1971). Nepal strategy for survival. University of California Press. Rose, L. E. (1977). King Mahendra’s China policy. In S. D. Muni (Ed.), Nepal: An assertive monarchy (p. 224). Chetana Publications. Rose, L. E., & Scholz, J. T. (1980). International relations: A root between two stones. In Nepal profile of a Himalayan kingdom (pp. 117–123). Westview Press. Sharma, J. (1986). Nepal: Struggle for existence (p. 185). Communication Inc. Shrestha, P. M. (2022). Allocation for Nepal decreases by 33 percent in India’s budget. The Kathmandu Post. https://kathmandupost.com/national/2020/ 02/02/allocation-for-nepal-decreases-by-33-percent-in-india-s-budget Thapliyal, S. (1998). Mutual security: The case of India-Nepal. Lancer Publisher and Distributor. Trade and Export Promotion Centre (TEPC). (2020). Statistics on Nepal’s foreign trade. Windsor, P. (1989). Neutral states in historical perspective. In J. Kruzel & M. H. Haltzel (Eds.), Between the blocs: Problems and prospects for Europe’s neutral and nonaligned states (pp. 3–9). Woodrow Wilson Center Press. World Bank. (2021). Nepal’s development update 2021.

CHAPTER 5

Relevance of Neutrality

If Beijing doesn’t like Nepal’s road to the south in the same manner as New Delhi doesn’t like a road to the north, shouldn’t Nepal build any roads at all? enquired Tulsi Giri, the then Foreign Minister of Nepal, on January 27, 1962, in the context of the Indian newspaper articles and reports denouncing the very idea of constructing the road to Lhasa from Kathmandu. Giri’s 1962 question very much resembles the unuttered thoughts in the mind of Nepali folks today, particularly in regards to China-led BRI connectivity projects that New Delhi and Washington distaste, and American-sponsored Millennium Corporation Challenge (MCC) projects despised by Beijing. Thus, this chapter explores whether Kathmandu’s claims to Neutrality are relevant in the present context, while India and China have incongruous, irreconcilable and conflicting interests in Nepal. This chapter weighs up both the prospects and limitations of Nepal’s participation in China-led BRI, which India is still reluctant to join. Also, this chapter makes a foreign policy analysis of the US-sponsored Millennium Corporation Challenge in Nepali context with an objective to assess the relevance of Neutrality for Nepal, while the latter attempts to reconcile the conflicting interests of the major powers in the infant republic. Unlike Chapter 1, which surveys the literature centered on neutrality and situates Nepal’s case, this chapter specifically

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critiques the relevance of Nepal’s neutrality, its success, failure, and limitations in managing the interest of the immediate neighbors and great powers in Nepal. For both of its immediate neighbors, Nepal is strategically important as Nepal’s geography gives tremendous opportunities for both the neighbors to engage in the strategically-located country. Both the countries have strategic, economic, and security interests in Nepal. China’s strategic and security interests are largely related to security and peace in Tibet, while the economic interest of China, today, is to expand its trade and business in South Asia by using Nepal as a “gateway” through its BRI connectivity projects (Tao, 2017). India, too, is committed to have enhanced connectivity on the backdrop of its open borders and unique peopleto-people relations with Nepal, which in the words of Indian leaders and foreign policymakers is “Roti-Beti” relations—a bond of family and kinship (MEA, 2015). Strengthening the ingredients of India-China economic relationship may confer significant gains upon both nations, whose spillover effects would also be beneficial for the countries in their vicinity. China was India’s largest trading partner until overtaken by the US in 2019 (Menon, 2020). In 2021, however, China-India trade exceeded the pre-pandemic levels as the bilateral trade reached to 125.6 billion dollars (GAC, 2022). As per the data released by China’s General Administration Customs (GAC) on January 14, 2022, good imported from China to India surpassed the bilateral trade in 2019 because of the rising demands for the “new categories of goods such as medical supplies” (Krishnan, 2022). It indicates, despite of the sporadic rancor in their interactions, the probability of economic collaboration between the two Asian giants, whose security and strategic concerns in the region and beyond have, however, dwarfed or limited their economic engagements. For instance, their aggression on the Himalayan borders is directly proportional to their trade and business by altering the strategic choices of trade negotiators, officials, venture capitalists, diplomats, and start-up CEOs (Chaudhuri, 2020). The impacts of the Sino-Indian territorial dispute are spotted not only on their bilateral trade, but also on their relations with the neighboring countries, who have aspired to draw benefits from the economic rise of India and China. As the disputes between China and India may lead several South Asian countries to take a side (Zheng, 2020), Nepal’s neighborhood foreign policy, particularly its ambivalent attempt to neutrality,

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doesn’t remain free from ramifications. The chronic episodes of standoffs, brawls, and skirmishes in 2020 between India and China in the Himalayan borders proliferated security threats for Nepal, which was evident in the press statement issued by Nepal following the death of 20 Indian soldiers in the skirmishes between the Indian and Chinese troops in the Galwan valley in June 2020. Kathmandu believed that the two countries need to resolve their dispute in Galwan valley through “peaceful means in favor of bilateral, regional and world peace and stability” (MoFA, 2020). In such an unfortunate context, Nepal often attempts to neutrality, at least on the papers through statements and speeches. After all, Kathmandu perceives neutrality not just as abstaining from getting hauled into any dispute or war but also exploits it as the strategy to secure geopolitical advantages; an instrument to manage the interests of major powers in Nepal, and not as an act of renunciation to the immense neighborhood. But, the lampooned inability of Kathmandu-based foreign policy architects and implementers to distinguish its claim to neutrality with other foreign policy objectives, including non-alignment and equidistance have spawned skepticism over Nepal’s knowhow regarding the policy of neutrality. In the Nepali context, the claim to neutrality itself appears incongruous, largely because of the dearth of the prerequisite foreign policy institutions and lack of proficiency and expertise among the foreign policy makers and implementers vis-à-vis neutrality. As a result, when they are claiming of neutrality, it ambiguously turns out to be either hedging or balancing or coping strategy, which was fairly distinguishable in Nepal’s entry into China-led Belt and Road Initiatives in 2017, and also in the manner Nepal signed US Government’s Millennium Challenge Corporation (MCC) compact the same year. Today, Nepal stands extraordinarily divided over whether MCC and BRI are hostile to each other? Against the backdrop of the strategic competition between Beijing and the US, and also in the context of the way they perceive each other as rivals, Nepal, which is geographically located next to China finds itself in a predicament of its own creation, to manage their diplomatic overtures. Kathmandu’s years of dillydallying to get MCC endorsed by Nepal’s parliament, and not even a single BRI project being implemented in the past four years reveals the same mare’s nest of unpleasant situation. It also exposes the limit of Nepal’s claim to neutrality and its pretentious use in coping with the great power rivalry.

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BRI and MCC: Antagonistic and Hostile? Understanding the US–China relations from the perspective of a new “Cold War” has become a routine experience today (Marcus, 2021). But the strategies that they have pursued against each other, alone, may not be sufficient to brand their strategic competition as a “Cold War” (Christensen, 2021). Currently, they are not in an ideological race as the US and the USSR were from 1945 to 1990. Also, they are not leading any forms of military alliances against each other as the US-led NATO and the USSR-led Warsaw Pact engineered in the 45-year-old history of the Cold War. Furthermore, in the context of today’s globalized economy, it is almost inconceivable to cleave the global economy rigidly into two competing blocs as the US-led Capitalism and the USSR-led Communism after the end of World War II. Washington has perceived China’s rise as a strategic competitor to the global influence of the US. Biden administration’s Interim National Security Strategic Guidance has described China as an “assertive” power and the “sole competitor” confronting the open international system (Interim National Security Strategic Guidance, 2021). As such, Biden administration is already geared towards containing the rise of China. The US Strategic Competition Act of 2021, which was approved by the Senate Committee on Foreign Relation, authorized to reserve “300 million US dollars for fiscal years 2022 through 2026,” to globally contain the rise of China (SCA, 2021). But, it didn’t begin with the Biden administration. America had identified China as a threat to US influence and power in its 2017 National Security Strategy Report (National Security Strategy of US, 2017). Also, in its Defense Strategy of 2018, China and Russia were listed as “revisionist power” and threat to the US interest (Mahbubani, 2020). To Beijing, however, all the US policies and strategies since 2017 are the upshot of the misconceptions and miscalculations (Yi, 2021), which were forced upon China by the Trump administration (Dalei, 2020). Although Bejing considers any kind of strategic competition and “cold war” as detrimental to the interest of both the countries (Yi, 2021), China’s actions don’t justify that as Beijing aspires to become a strong and powerful state by 2049— the year China awaits to cherish the 100th anniversary of the birth of the People’s Republic of China. What’s more, China’s ambitious Belt and Road Initiative (BRI) project has already enunciated its global power

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ambition. Today, no regions in the world are free of the ferocious competition between China and the US, as predicted by Mearsheimer while introducing the theory of offensive realism (Mearsheimer, 2001; 2010). China considers South-East Asia as a site to advance its great power capabilities (Stromseth, 2020) as the US intends to confront Chinese power in the region (Sopel, 2021) despite America’s abstention from Trans-Pacific Partnership and Regional Comprehensive Economic Partnership (Djalal, 2021). Biden, too, has signaled about the continuity of the hard approach towards China as introduced by his precursors (Oertel, 2021). Countering China’s Belt and Road Initiative (BRI) with Biden’s Build Back Better World (B3W) proposal doesn’t indicate a major departure from Trump’s Indo-Pacific Strategy (IPS) and Obama’s “Pivot to Asia Policy” (Joshi & Atmakuri, 2020). As the levels of strength and influence of Beijing and Washington vary across the countries in the Indo-Pacific region, neither the US nor China is in a position to win the race fully in one’s favor (RAND, 2020). The European continent, too, has not been able to escape the growing tension between Washington and Beijing (Oertel, 2021). The 2020 EU–China Comprehensive Agreement on Investment (CAI) altered all kinds of prior assumptions regarding Europe–China relations. EU’s 2019 Strategic Outlook had identified China as a “systemic rival” (European Commission, 2019). Although opposition to the Chinese investment was a common sight in the wealthier European countries during the pandemic, CAI came as a realization to the European world that an absolute decoupling from China is not doable (Perthes, 2021). Also lured by Biden’s call to establish a multilateral forum of like-minded partners, the EU is struggling to keep the balance intact (Oertel, 2021; Perthes, 2021). In the Middle East, the Sino-US strategic competition is detectable in the manner Beijing is deepening its bilateral ties with the US allies, including UAE, Egypt, and Israel. Beijing’s comprehensive strategic partnership deal with Iran, Saudi Arabia, and Iraq against the backdrop of US withdrawal from Afghanistan and Biden’s interest to renegotiate the Iranian nuclear deal divulges the brewing Sino-US competition in the region (Benami, 2021). In the African region, the Sino-US strategic competition is driven by economic and security concerns. In the context of the Chinese military base in Djibouti and increasing investment in different sectors including mega infrastructure projects, manufacturing, agro-processing, telecommunication (Park, 2021), the US’s Strategic Competition Act (SCA) orchestrates

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competition against the increasing Chinese influence in Sub-Saharan Africa (SCA, 2021). The Sino-US competition in the South Asian region is influenced by various factors. Firstly, the strategic partnership between the US and India. Secondly, intricacies in US’s relations with Pakistan (China’s “allweather friend”); thirdly, the China-Pakistan Economic Corridor (CPEC) that runs through the disputed territory of Kashmir (Ashraf, 2021). While the US’s SCA-2021 stipulates strengthening strategic partnership with India to contain the rise of China, Washington has reassured of continuing global strategic partnership with New Delhi and further enhancing the “bilateral defense consultations and collaboration” (SCA, 2021). Despite the strategic convergence in the interest of Washington and New Delhi under the framework of Indo-Pacific Strategy (IPS) to contain the rise of China (Thakker, 2021), India’s South Asian neighbors are constantly lured by China’s BRI infrastructure and connectivity projects. Following the failure of 2018 Wuhan Spirit and 2019 Chennai Connect, which were the steps taken by the Indian Prime Minister Narendra Modi and Chinese President Xi Jinping to renegotiate their relations, today, the presence of the US in India’s backyard has not only maddened China but has further heightened doubts, dilemmas and distrusts in the ChinaIndia and China-US bilateral relations. In the context of the China-India border standoff in their Himalayan borders that had started in June 2020, New Delhi and Washington had inked the Basic Exchange and Cooperation Agreement (BECA) with an objective to contain China through geospatial intelligence (White, 2021). While BECA offered the US a leverage to fulfill its objective of containing China globally, the agreement also provided an opportunity to New Delhi, at least to convey its message to the international community that China’s “expansionism” in the Himalayas through latter’s ambitious BRI projects could be prevented with the resurgence of India’s Himalayan Frontier Theory. The BECA deal with the Washington has already provided New Delhi an access to the “sensitive aeronautical data and geospatial information that is largely significant for the military purpose” (BBC, 2020). Although Nepal has been balancing its two gigantic neighbors for centuries (Kissinger, 2014), Sino-Indian rivalry in the context of the emergence of a “new Cold War” between Washington and Beijing has proliferated challenges to Nepal’s neighborhood and regional policies. Will Nepal’s attempts to neutrality amply rescue the Himalayan country from the heights of SinoIndian rivalry? While Kathmandu has already inked BRI agreement with

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Beijing, what would be the implication of the parliamentary ratification of the US-sponsored Millennium Challenge Corporation (MCC) grant with “interpretative declaration”? Will Kathmandu be able to administer the incompatible interests of the great powers and major powers with its attempt to neutrality? Today, the general public perception in Nepal is shaped by the everyday political socialization in such a manner that China-led BRI and the US sponsored MCC are understood as hostile and antagonistic to each other (Khadga & Bhattarai, 2021). Having failed to effectively manage the interest of great powers, political parties, particularly the Maoists have portrayed MCC, which is USD500-million plan for investment in roads and electricity transmission, as hostile to China-led BRI. But, when Nepal had inked the deal with the US in 2017, MCC remained free from any kinds of controversy (MCC, 2017) and was expected to be successfully endorsed by the Nepali parliament without any hurdles and hindrances. But, it took years to get finally ratified in the last week of February 2022. Controversies associated with MCC had surfaced only after confusions and skepticisms were fashioned establishing its ties with the US-led Indo-Pacific Strategy (IPS) which is principally aimed at containing the rise of China. Although Nepal cannot afford to join any kinds of military alliance with or against China (Acharya, 2020), it cannot be rebuffed that US’s future policy towards Nepal is determined by the fate of MCC in Kathmandu (Wagle, 2020). While US defense officials have already observed BRI projects in Nepal as serving the interest of China, not of Nepal (The Kathmandu Post, 2019), Nepali decisionmakers, until ratifying the compact, were in a state of quandary as not endorsing MCC would further aggravate Nepal’s claim to neutrality. In the year 2019, when Trump administration revealed Nepal as its strategic partner in the Indo-Pacific Strategy, Kathmandu instantly rejected it (The Rising Nepal, 2019). The Indo-Pacific Strategy Report of 2019 “Preparedness, Partnership and Promoting a Networked Region” emphasized on developing “partnership and expanding defense relations with Nepal” (DoD, 2019). Similarly, in the report, “A Free and Open IndoPacific: Advancing A Shared Vision,” the US Department highlighted on “enduring strength of the U.S.-Nepal partnership and the close peopleto-people ties that form the foundation of the relationship” (DoS, 2019). Taking these reports into consideration, the pro-Chinese Maoist leaders had started to oppose the MCC, reckoning it as a component of IPS and publicly disseminated that parliamentary endorsement of this project

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would push Nepal into a military alliance. Maoist leaders along with some ultra-nationalists and Nepali politicians with China tilt even paid no need to the efforts made by the Kathmandu-based US Embassy to eliminate all misunderstandings attached with MCC. In the January of 2020, the US Embassy in Nepal had issued a 10-point clarification, underlining how MCC is free of military components and is aimed at strengthening Nepal’s energy sector and upgrade connectivity to bolster growth and private investment. The Embassy stated that “the $500 million is a grant, with no strings attached, no interest rates, and no hidden clauses. All Nepal has to do is commit to spend the money, transparently, for the projects that have been agreed upon” (US Embassy in Nepal, 2020). When MCC was registered in the parliament, the Nepal Congress and the CPN-UML were willing to endorse the compact from parliament. But, the Maoist leaders, by all accounts, acting under the influence of China, cautioned that endorsing MCC might wreck Nepal’s ties with China impacting the implementation of BRI projects in Nepal, particularly the transHimalayan railways. Thus, the public perception in Nepal over MCC and BRI as hostile to each other was wrought by the political actors after the U.S. Department of Defense (DoD) made its Indo-Pacific Strategy Report public in 2019 (Khadga & Bhattarai, 2021).

MCC Controversy and China Factor Beijing’s response to MCC should be understood in the context of the changing dynamics of the US-China ties globally. When the US-China bilateral relations hadn’t worsened extensively, Beijing’s response towards MCC project in Nepal was positive and inspiring. But, as soon as the Sino-Indian ties and Sino-US relations further worsened, China perceptively started to lobby with the key political players in Nepal to prevent th project’s endorsement from the parliament of Nepal. On January 3, 2020, the Chinese Ambassador to Nepal Hou Yanqi not only clarified that China’s position is not to halt any kids of foreign economic assistance that Nepal obtains, but also went on revealing Beijing’s desire to see MCC ratified. She stated, “China welcomes any international assistance and support to Nepal if it is received for economic cooperation. Beijing would also like to see MCC being ratified by Nepali parliament” (Yanqi, 2020). Hence, her previous statements indicated that endorsing the American project in Nepal won’t have an adversarial effect on the BRI projects and on the entire gamut of Nepal-China ties. But, today,

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things have changed. Beijing’s opposition to the MCC project and its pressure on Nepali politicians, not to implement the American investment for upgrading the Nepali infrastructure has clearly surfaced (Kumar, 2021). It revealed how the ratification of the project was procrastinated, not only because of Nepal’s domestic politics, but more because of the geopolitical value attached with it. While Prime Minister Sher Bahadur Deuba was making preparations to get it approved from the parliament, Chinese ambassador to Nepal Hou Yanqi made a visit on December 22, 2021 to the residence of former Prime Minister KP Oli, who backed the American project during his premiership. It indicated China’s unusual interest in the 500 dollar American grant. Similarly, when CPN-UML’s General Secretary Ishwor Pokharel had a video call with the Vice Minister Chen Zhou of the International Department of the Communist Party of China (CPC) on December 13, 2021, it was reported that Zhou enquired about the status MCC projects. When Zhou approached former Prime Minister Madhav Kumar Nepal, the latter took no less time in publicly stating that if MCC affects Nepal’s relations with neighboring countries, it should be rejected. To prevent MCC from being materialized, China lobbied with top political actors. Speaker of the Nepal’s Parliament Agni Prasad Sapkota of the Maoist Centre showed his indisposition towards MCC approval until 12 points of the interpretive declaration was issued clarifying the concerns put up by some political parties. Former speaker Krishna Bahadur Mahara had also didn’t entertain it. China perceives the American project in its neighborhood with suspicion, and is seriously concerned about it. To Chinese strategist thinkers, MCC project in Nepal, is an “American Strategy” (Yiwei, 2020). Eleven days before the parliamentary ratification of the MCC project on February 27, 2022, Prime Minister Deuba’s coalition partners, including Prachanda’s Maoist Centre, and Madhav Nepal’s Unified Socialist had threatened to quit the government if the compact was forwarded to the parliament. Rastriya Janamorcha even organized a street protest on the eve of the visit of MCC Vice President Fatema Z Sumar to Kathmandu on September 9, 2021 to convince Nepali political actors. Before the arrival of Fatema, Nepal’s Finance Ministry on September 3, 2021 had dispatched a letter to MCC’s headquarters in Washington DC enquiring whether MCC compact is above Nepal’s constitution and is a part of Indo-Pacific Strategy. In its 13-page respone, MCC clarified that “…The US law that governs MCC prohibits MCC from using the funding for any military purpose; the compact is explicit about this legal prohibition. Therefore, there is no

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connection between MCC Nepal Compact and any military alliance or defense strategy”. The incumbent Prime Minister Deuba and his party, Nepali Congress, always wished to ratify it as the compact was inked during Deuba’s fourth term as Prime Minister back in 2017. Once Deuba’s political rival K P Oli became the Prime Minister in 2018, he also backed the American project and wanted to get it endorsed. But, recommendation of the three-member taskfoce formed by Nepal Communist Party not to endorse the compact without amendment, barred Oli. Still, his party colleagues Prachanda and Madhav Nepal used Oli’s backing for MCC as a tool against him in a power struggle that not only split the Nepal Communist Party but also the CPN-UML. Although Beijing lobbied tremendously to keep the Nepal Communist Party intact, it failed. Political parties like Janata Samajbadi Party, which is another coalition partner, remained divided over MCC. The senior leader of the party Baburam Bhattarai, during whose premiership Nepal was nominated for MCC threshold program, publicly supported MCC, while his coworker Upendra Yadav emphasized that the decision on MCC should be taken on the basis of national consensus among the political parties. Thus, inside the ruling coalition, the perceptions towards the US and the MCC project were diverse, at least until the compact was ratified. But, more than that, personal and party links with the powerful leaders in China and India not only delayed the approval of the project but also made Nepal’s foreign policy appear inconsistent and unstable. Nepal’s struggle with MCC also indicates at how Nepal’s foreign policy priorities and responses are instantly driven by which political party is in power. It seems as if all the political leaders in Nepal are interested to dictate and direct Nepal’s foreign policy. The divide triggered by MCC at the political, intellectual, and foreign policy fronts exposes the irrelevance and fallibility of Nepal’s claim to neutrality. Not to let such a divide incapacitate the coalition, Deuba government even summoned an all-party meeting on December 19, 2021 to decide the fate of MCC. Because of the absence of the main opposition, the meeting had to end by constituting a taskforce to hold further discussion on MCC. The political parties remained divided largely because of three reasons. Firstly, politicization of American project provided an opportunity for the ultra-nationalist forces to increase their vote banks in upcoming elections by portraying the supporters of MCC as antinationals. Secondly, pro-western political leaders were facing the pressure

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to endorse it by the parliament before it met its expiry, which would severely impact Nepal-US relations. Thirdly, the pro-Chinese parties and leaders were not in a position to endorse it and were left to portray MCC as anti-Chinese and hostile to BRI projects. Rise of China has once again strategized Nepal’s geographical location (Acharya, 2020, p.5) as the new security partnerships and strategic alliances are being devised in the Asia–Pacific region with an aim to contain China, Nepal’s northern neighbor. While the leaders of the Group of Seven(G7) countries have announced the Build Back Better World (B3W) scheme to counter China-led BRI connectivity project (BBC, 2021), which Nepal joined in 2017. Also, the Quadrilateral Security Dialogue (the Quad) comprising the US, Japan, Australia and India is intended to contain China. To face off China jointly through geospatial intelligence, the Basic Exchange and Cooperation Agreement on Geospatial Cooperation (BECA) has been signed between India and the US (BBC, 2020). In such a state of constant flux, how shall decision-makers in Kathmandu deal with MCC and China? Is Nepal well-equipped to accommodate the incompatible concerns of the major powers in the risk-bound, uncertain strategic milieu characterized by changing power relations? Nepal’s struggle with MCC is an apt example. While the ruling political parties, who play an important role in foreign policy formulations and enactments, don’t shy away from representing the interest of the contending powers, Nepal’s claims to neutrality, without a hitch, are compromised and imperiled. There was no dispute over MCC in Nepal until it was explained by David J Ranz, assistant secretary for South Asia at the US State Department, during his Nepal visit in May 2019, as a component of Indo-Pacific Strategy, which is aimed at containing Nepal’s northern neighbor. The need of parliamentary ratification made Nepali political leaders more skeptical towards the compact, although the US clarified that in all the countries where MCC works, ratification from the House is a must as it offers “transparency and an opportunity for Nepalis to understand the project” (US Embassy in Nepal, 2020). Nepali political leaders opposing the American project have unnecessarily politicized the “7.1” section of the compact which states “the Parties understand that this Compact, upon entry into force, will prevail over the domestic laws of Nepal”. Here, it should be understood that this clause is derived from the Governing Law mentioned in “6.4” section which states, “this Compact is an international agreement and as such will be governed by the principles of international law”. Furthermore, as

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directed by the Nepal Treaty Act, all the international treaties that have been signed by the Government of Nepal, including UN treaties and the Vienna Convention on Diplomatic Relations prevail over domestic laws in the case of conflict, and necessitate parliamentary ratification. While responding to the enquiries of Nepal’s Finance Ministry on whether the law of the compact will prevail over Nepal’s constitution, MCC said, “Constitution of Nepal prevails over the Compact…but based on MCC’s experience in other countries, a compact’s status as an international agreement is critical to ensuring that implementation can proceed without delay, which is particularly important given the limited five-year implementation period of a compact” (MCC, 2021). While frequent changes of government in Nepal have indignantly impacted major infrastructure projects in Nepal, the US intends to complete it in a five-year time. But, because of the repeated delays from the Nepali side, MCC had set February 28, 2022 as a deadline as per the request of the decisionmakers in Kathmandu. Failure to meet the stipulated deadline could have terminated MCC’s partnership with Nepal. But, Nepal’s parliamentary ratification on February 27, 2022 forestalled MCC Board of Directors from taking such decisions (MCC, 2022). On September 29, 2021, Nepal’s Prime Minister Sher Bahadur Deuba and Maoist Centre Chair Prachanda had sought the time of four to five months to build a political consensus over the compact. It was in 2004 that the US Congress approved legislation for establishing MCC as independent bilateral foreign aid agency, under which assistance is provided to the low-income countries. But, countries to be supported by the aids are selected through competition as they have to meet 10 out of 20 policy indicators to receive the grant. The indicators include business start-up, child health, civil liberties, control of corruption, fiscal policy, freedom of information, gender in economy, government effectiveness, inflation, natural resources protection, political rights, among others. Nepal met 16 out of the 20 indicators. MCC grant is offered in different sectors including education, agriculture and irrigation, power and energy, anti-corruption measures, health, transportation, sanitation, water supply, land rights, and enterprise development. As the first country in South Asia to get qualified for the grant by prioritizing on energy and roads, Nepal was formally selected by MCC in 2014. In 2015, MCC opened its Nepal office. In 2017, Nepal signed the agreement to receive $500 million in grants, while Nepal have to bear $130 million. As per the agreement, the $500 million goes to the energy sector

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while $130 million goes to the road sector. More precisely, the fund will be used “to construct about 300 km 400 kV transmission lines from Lapsiphedi—Galchhi- Damauli—Sunawal corridor along with 3 substations, and maintenance of about 300 km roads in the various alignment of Mechi, Koshi, Sagarmatha, Tribhuvan Rajpath, and East–west highway” (Embassy of Nepal in the U.S, n.d.). At the onset, Nepal applied for MCC grants to support the former’s attempts towards economic development through expansion of energy sector and road connectivity, today, the compact has become the victim of political rhetoric than reality. Because, in reality, MCC is anticipated to contribute to Nepal’s efforts towards infrastructure-driven and connectivity-propelled development. But, Nepal’s years of delay to get the MCC compact endorsed not only tarnished Kathmandu’s economic diplomacy in the global financial institutions including the World Bank, WTO, and IMF but also raised suspicion over Kathmandu’s policy of “amity with all and enmity with none” in the context of engaging China through BRI but procrastinating American project. Sri Lanka’s experience may be an apt example to consider here. Although the island country discontinued the MCC compact, it fell into China’s “debt trap”. It offers a lesson for Nepal regarding how Sri Lanka was also not invited to the bygone Democracy Summit hosted by America, which indicates at US’s changed policy towards the strategically located archipelago. Thus, Nepal should be meticulous in dealing with its long-time development partner like the US in the context of policy challenges faced in coping with the rise of China and achieving infrastructure development and growth.

BRI: Balancing Strategy for Nepal Although China-led BRI projects haven’t triggered a similar level of the political divide in Nepal as did by MCC, China’s flagship project too has been the victim of the frequent changes of government in Nepal. Here, it needs to be understood that when Kathmandu formally joined BRI in 2017, the landlocked country’s excitements and expectations were palpable and perceptible. Nepal perceived it as an economic and financial platform to diversify its trade and transit, and get connected with the global value chain by reaping benefits from the policy coordination, unimpeded trade and connectivity infrastructure projects. But, it wasn’t limited to that. The strategically placed country also deemed BRI as a strategic podium. In fact, after the 2015 blockade, Kathmandu was looking for

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an apt opportunity to balance Indian influence in Nepal. Kathmandu saw that prospect in BRI. Thus, besides reckoning it as a connectivity project and infrastructure development scheme, BRI, for Nepal is an instrument to balance Indian, American, and European interests. Kathmandu has adopted the same standpoint despite the changes in governments fundamentally because of two reasons: firstly, the western world and India have cautioned Kathmandu about the probable “debt trap” that Nepal may face while implementing the BRI projects. Secondly, Nepal’s entry into China-led BRI was part of Kathmandu’s coping strategy in the context of the rise of China. Evidently, Nepal is hedging with the western powers and its neighbors through its entry into BRI. While BRI projects, today, have confronted assorted problems in their implementation, it assuages Nepal’s stress in responding to the “debt trap narratives”. Thanks to its political uncertainty and sluggish bureaucracy that have further delayed the policy coordination under the BRI framework. Although the Western world has been warning of possible “debt trap,” while implementing the BRI projects, China deems the “debt trap” narrative as propaganda and mere rumors to contain the rise of China. Coupled with numerous criticisms including the issue of the “debt trap,” environmental concerns, and matters of transparency, New Delhi, too, doesn’t want its traditional backyard falls prey to the expanding Chinese presence. Thus, to preserve its prominence in the region, India has sought a refuge in the strategic partnership with the US, which today, aims to contain China’s influence in the Indo-Pacific region. Both of the strategic partners have been cautioning India’s South Asian neighbors against China’s “Debt Trap” diplomacy. But that doesn’t prevent the leadership of the small countries in South Asia to get lured by the Chinese aid and investment, with the help of which, the power elites of the small states plan to prolong their stay in government. Because, with the collision of the great powers’ interest in the region, the decisionmakers in the small countries are left with the available alternatives for implementing Cold War survival strategies, including hedging, balancing and band wagoning. Nonetheless, Nepal has raggedly failed to flee the ramifications of great power competition through its ambiguous claim to neutrality. Because Kathmandu maintains its economic engagements with Beijing in such a manner that they perspicuously appear more strategic, tactical and shrewd to New Delhi and Washington. With China licking its lips at the thought of crossing the Himalayas along with the BRI projects in hand so that Beijing could get easy

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access to the South Asian market, New Delhi is alerted by China’s policy stealthily aimed at encircling India’s traditional sphere of influence in the name of developing economic corridors under BRI framework. Geographically located between the two rival countries, Nepal queerly hopes to draw benefits from the multidimensional connectivity with both the neighbors. Landlocked Nepal strives to get connected with both the Asian giants through roadways, railways, airways, waterways, optical fibers, gas, and petroleum pipelines, and electricity transmission lines (Nepal’ Foreign Policy, 2020). Nepal, however, faces both the opportunities and challenges of engaging two economic giants; firstly, because of the intricacies surfaced following New Delhi’s reluctance over the proposal of trilateral partnership; secondly, Sino-Indian rivalry starkly prevents such possibility. As Kathmandu has always looked up to Chinese development aids with excitement and aspirations, Nepal perceives BRI projects advantageous for its socio-economic transformation, and specifically to buttress its attempts made towards graduation to the list of developing countries by 2026 (UNCDP, 2021). As such, Nepal’s commitment to BRI projects, despite its geopolitical value and susceptibility to contention, is driven by Kathmandu’s long-standing desire to remain better connected to the outside world through railways, roads, aviation, ports, and new channels of communication under the framework of the trans-Himalayan Multidimensional Connectivity Network (MoFA, 2019). Nepal’s Fifteenth Plan (Fiscal Year 2019/20) also emphasized promoting “bilateral and trilateral cooperation and collaboration between Nepal, India, and China in the areas of transport infrastructure and communication connectivity, energy, and tourism and to utilize economic synergy with South Asia and North Asia for the socio-economic transformation of the country.” Thus, Nepal exploits its geographical proximity with the two economic giants to materialize its connectivity-driven development strategy by promoting cross-border connectivity through trade, tourism, investment, and people-to-people relations. Since the crossborder connectivity projects including highways, railways, and info ways are unavoidable to readily and staunchly transform landlocked Nepal into a land-linked country, Nepal’s foreign policy priorities, today, are exceedingly driven by the modus operandi to materialize the proposed and planned connectivity projects offered by New Delhi and Beijing (Ministry of Foreign Affairs, 2020). Still, it is an uphill task owing to the strategic competition between India and China in Nepal. Both the contending neighbors reckon the extent and scope of their investments in Nepal as an

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instrument to fulfill their geostrategic goal. In the wake of an uncertain strategic environment triggered by the Sino-Indian rivalry, “constant care, funding, and support” (Khadga & Bhattarai, 2021) to the cross-border connectivity projects is neglected by both the sides, which eventually offers a strategic space to the power elites of the small countries in reaping benefits of prolonging their stay in the government in the name of such unfinished and abandoned projects. On the strategic front, Nepal is utilizing BRI as a means to assert her sovereignty and enacting the balancing strategy. While being strategic, Nepal’s acts may be interpreted as “band-wagoning”. Also, the Nepali political parties brandishing and aggrandizing the BRI projects to shrewdly protect their government back home suggests the continuity of the survival strategies in Nepal’s foreign policy, which is however detrimental to Nepal’s economic ambitions and developmental aspirations from the project. Despite its unusual aggrandizement by Nepali political parties, not a single BRI project being implemented in Nepal since Kathmandu signed the agreement with Beijing in 2017 points to Nepal’s geopolitical dilemma. Even the various connectivity agreements with China seem to have been of symbolic nature than bearing the real economic value. For instance, although in 2019 Nepal and China signed the protocol on Trade and Transit Agreement so that Nepal could get access to at least seven Chinese ports, including four seaports in Tianjin, Shenzhen, Zhanjiang, and Lianyungang and land ports in Lhasa, Shigatse, and Lanzhou for the third country trade, Nepal is largely dependent on Indian ports. For now, geographical intricacies impede the probability of getting easy access to these ports although several freight trains have been launched from Chinese ports to Nepal borders, not only as a symbol of Nepal’s ability in diversifying its trade and transit but more as an indication of possible land connectivity between the two countries. Owing to the vast geographical distance from Chinese port, unwelcoming terrain, and expensive freight train service, Nepal is physically and economically not in a position to trade via Chinese ports. Even the proposed Chinese railway coming to Nepal’s capital, as the standard calculations project, is at least a decade far. Until then political parties in Nepal have time to further strategize BRI projects in the context of Sino-Indian rivalry and Sino-US strategic competition and imprudently demand more from Washington and New Delhi.

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Everyday news of increasing Chinese presence in latter’s backyard has made India realize about latter’s delivery in Nepal. While Chinasponsored infrastructure projects in Nepal meet their completion ahead of the stipulated deadline, India’s big projects are mostly delayed and others hardly take off. For instance, although a Memorandum of Understanding (MoU) was signed between the government of Nepal and India to construct a police academy in Nepal at the cost of 8.8 billion, the project has failed to make headway. Now, the growing Chinese investment has sent a wake-up call to India impelling New Delhi to complete projects on time. Completion of cross-border petroleum pipeline ahead of schedule is an apt example. The foundation stone for the construction of the pipeline, the first of its kind in South Asia, was laid jointly in April 2018 by Indian Prime Minister Narendra Modi and his Nepali counterpart KP Oli and it was supposed to be completed within two years. But it was completed before the stipulated deadline and both the Prime Ministers jointly inaugurated the petroleum pipeline in the September of 2019. Following Nepal’s admission into BRI, Kathmandu wanted to persuade New Delhi to shift its approach towards the small South Asian neighbors. The attraction of India’s neighbors towards China-led BRI is incisively induced by the economic rise of China. They do aspire to draw benefits from the economic rise of India. Alas, it hasn’t happened. Nepal’s trade deficit with India has forlornly ballooned. Nepal’s agro goods often confront non-tariff barriers while being exported to India. Gingers and garlics from Nepal have also faced such barriers. Thus, ameliorating border infrastructure through custom modernization and trade facilitation to enhance necessitated connectivity could be the best start for India. For example, a truck ferrying goods from Calcutta port to Nepal may take 3 to 7 days to cross the borders that incur additional costs to the Nepali traders. But, instead of improving the trade relations between the countries, India imposed an economic blockade on landlocked Nepal in 2015, which not only tarnished India’s image but also took Nepal closer towards China. In the same way, India could have speeded up its initiatives to exchange demonetized notes held by Nepali nationals following the demonetization policy by New Delhi in 2016. As the national bank of Nepal, Nepal Rastra Bank still has 7 crores demonetized Indian currency, Nepal sought assurance from New Delhi about the exchange of these notes in 2019 but there has been no response. All these details signal that New Delhi hasn’t given its immediate neighbors any resplendent reason

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to celebrate its economic development. Unless India understands this, it won’t be able to free its immediate neighborhood from China’s clutches. Even though Nepal has strategized BRI as a tool to bargain more from its southern neighbor, the growing interest of China in Nepal’s political spectrum, a site monopolized by New Delhi for a long time, may generate an unending tug-of-war between them in Nepal, resulting into a frequent change of governments in the strategically placed country. While Sino-Indian competition in Nepali politics reduces Kathmandu’s strategic autonomy, Nepal’s claim to neutrality is automatically diluted.

Beijing’s Growing Footprints At present, not a single BRI project is being implemented in Nepal. Still, Nepal remains an active participant in Chinese aid and investment. As China’s investment commitment tops the list of countries interested to invest in Nepal, Beijing eyes for the political climate favorable to its investment. Amounting to more than seventy percent of the total investment commitments (as Nepal received 107 foreign direct investment commitments of 18.45 billion from China in 2020–2021), the Himalayan country is not in a position to brusquely brush aside the Chinese interest. Above all, Kathmandu has always looked up to China as a counterforce to Indian influence. Beijing’s increasing political influence in Nepal should be understood in the context of New Delhi’s policy towards Nepal. It was the Indian blockade on Nepal in 2015 that not only pushed Kathmandu towards Beijing, but also hauled China in Nepali politics, economy, and foreign policy. In the April of 2020, when the intra-party rift was brewing inside the Nepal Communist Party, the Chinese ambassador to Nepal, Hou Yanqi, was holding a series of meetings with the top leaders of NCP. As soon as the leaders belonging to the rival factions of the party were asked by Yanqi to maintain party unity and avoid the split by making attempts to oust Prime Minister KP Oli, they backpedaled from their earlier position. Beijing was concerned about the likely internal rift within the party. Such concerns have steadily increased and have become more pronounced, indicating China’s influence in Nepal’s internal political affairs. Traditionally, China never projected itself in that manner, rather as an external power insisting political parties in Nepal to resolve domestic political issues by themselves. It was only after the fall of the monarchy in 2008, Beijing started to engage itself extensively with the political parties.

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Unlike India, which was engaging with both the forces, monarchy and political parties, before the political change of 2006, China had relied on the monarchy alone to secure its interests. Beijing’s engagement with the political parties was limited before the change of regime. Also, in the past, Bejing’s image in Nepal was of a non-interventionist, which has now totally changed possibly because of the two reasons: firstly, with its rise, China is eager to extend its influence in the neighborhood; secondly, with the regime change in Nepal and apprehending the situation of volatility and power vacuum, China got an opportunity to cultivate ties with the political parties and emerge as an influencing force in the domestic politics of Nepal, not restricting itself to the development of physical infrastructure. China was providing military assistance to Nepal’s monarchy in the latter’s fight against Maoists, with whom China expanded its relationship following the downfall of the royal regime. After King Gyanendra’s 2005 military coup, while India and the US had suspended their military assistance to Nepal and demanded the restoration of democracy, China continued its military support to the royal regime. After 2008, when the Maoist party emerged as the largest party, Beijing started to develop its relations with the Maoist party, which saw its splits in 2013 and 2015. Beijing was silently lobbying against ethnicity-based federalism during Nepal’s constitution drafting process from 2008 to 2015. While New Delhi expressed its dissatisfaction over Nepal’s constitution by imposing a blockade, Beijing welcomed it. In the wake of the border blockade, the coalition government led by Prime Minister KP Oli signed a Transit and Transportation Agreement with China, as an attempt to reduce Nepal’s dependence on India. When cracks had surfaced in the coalition government formed by the two communist parties—the Maoist Center and CPN-UML, Beijing attempted to keep the coalition undamaged. As soon as the Oli-led government was toppled, the mouthpiece of the Chinese Communist Party Global Times published an editorial, “Nepal should not let Prime Minister’s resignation hinder beneficial ties with China”. The editorial also mentioned how Oli’s resignation triggered uncertainty for Chinese investment in Nepal. To fulfill China’s long dream of working with unified communist party in Nepal, in 2018, vice minister of International Department of the Chinese Communist party Guo Yezhou was sent to unite the Prachanda-led Maoist Center and Oli-led CPN-UML to form Nepal Communist party (Ramachandran, 2020). In the December of 2020, when the political and constitutional crisis in Nepal was mounting and NCP was divided, Guo was again dispatched to Nepal to negotiate

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the crisis. When Communist Party of China provided training on “Xi Jinping Thought” to the cadres of the ruling Nepal Communist Party just before the visit of the President Xi Jinping to Nepal in October 2019, China’s penetration with its political agenda was observable. But China’s engagement is not confined to communist parties. Beijing is willing to work with all the political actors in Nepal, as long as its interests regarding Tibet and Tibetan refugees aren’t jeopardized. China has increased its political influence in Nepal by challenging India’s prior monopoly in Nepal’s economy. Chinese Ambassador to Nepal Hou Yanqi said in an interview published by The Rising Nepal on June 30, 2020 that the trade volume between Nepal and China increased to 1.5 billion dollars in 2019. In the same year, China became the second largest country to send tourists to Nepal. Approximately, 170,000 Chinese tourists visited Nepal in 2019. Including loans and grants, China’s total aid to Nepal tops the list of Nepal’s bilateral development partners. With 106 million dollars, China’s grant tops the list of all the bilateral and multilateral development cooperation partners of Nepal. Among the twenty-five post-earthquake reconstruction projects aided by China, twelve projects were finished until June 2020 while others are still in progress. Until the first decade of the twenty-first century, China’s investment in Nepal was marginal in comparison to India. In 2014, China overtook India as a biggest FDI source for Nepal. Although India has largest share of total FDI stock in Nepal, China is the biggest contributor in terms of fresh investment in Nepal (Table 5.1). Over 96% of India’s FDI stock is focused in three major sectors including manufacturing, hydropower sector, banks and financial institutions. However, in terms of paid-up capital, the investment in electricity, water (primarily hydropower sector) and gas tops the list (NRB, 2021). Similarly, over 99% of FDI from China is focused in manufacturing sector including cement industries and hydropower projects. Of the total industries approved for FDI until the mid-March of fiscal year 2020/21, Chinese investment stood at the top with 46.8% while India stood with 27.4%. Regarding the number of industries and investors, China stood at 35.50% while India stood at 15.4% (NRB, 2021). Chinese foreign aid to Nepal surpassed Indian aid in 2015. Today, China is Nepal’s second largest trading partner after India and is seen as the largest investor in terms of both, pledges and investment. Nepal has awarded major infrastructure and energy projects to China including airport expansion projects in Bhairahawa and Pokhara, and hydropower

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Table 5.1 FDI stock of India and China as of mid-July 2020 Sn

Country

Paid-up capital

Reserves

Loan

FDI stock

Share in Components total FDI stock (%) (Rs. Million)

1

India

35,555.7

25,566.7

1324.8

62,447.2

31.5

2

China

23,125.1

−5030.7

12,877.1

30,971.5

15.6

Manufacturing, mining and quarrying, electricity, gas and water, financial intermediation Manufacturing, mining and quarrying, electricity, gas and water

Source Economic Research Department of Nepal Rastra Bank (2021)

projects. Interestingly, Nepal wants India to purchase power from such Chinese-sponsored projects. While, Nepal is all-equipped to sell its electricity in India’s market, New Delhi has clearly informed Nepali side that there should be no Chinese inputs in their hydropower projects. India doesn’t want Chinese company to get benefitted from their market although Nepal and India signed power trade agreement in 2014. Nepal eyes both the Indian market and Chinese investment to fully utilize its hydro sector as Nepali politicians have been selling the dream of making Nepal prosperous by selling electricity. But, Nepal’s balancing act characterized by luring and repelling the two neighbors, is not free from impediments triggered by policy inconsistencies. Nepal’s biggest hydropower project of 1200 MW, located approximately 65 km northwest from Kathmandu was awarded to China Gezhouba Group Corporation (CGGC) in 2018 although the erstwhile Deuba government had decided to scrap the Budi Gandaki Hydro Power agreement with CGGC. But CGGC hadn’t shown up in the bygone years betokening as if Chinese company’s interest was to make money from construction contracts. Without sound and fury, however, Deuba government revoked the license provided to CGGC again in April, 2022, infuriating China.

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Similar was the fate of West Seti Hydro Project when China’s state-owned Three Gorge International, the potential builder, backed off from the proposed 750 MW project in 2018, calling it “financially unachievable”. The agreement was signed in 2012. China’s haphazard involvement in Nepal’s water may also lead to geopolitical tensions. In the context of Budi Gandaki, the river mixes into Gandaki, which enters into the Bihar state of India. As Nepal has singed Gandak Treaty with India, it bars the former to conduct any kinds of upstream activities impacting water flow in Bihar, where hectares of farmland are irrigated with waters flowing from the same river. Budi Gandaki is different from China-built hydro projects in Upper Marsyangdi A and Upper Madi that has a combined capacity of 75 MW. Unlike Budi Gandaki, which would be a massive reservoir, both of them are run-of-the-river schemes. Since 1980s, neither state-owned nor private firms from India have built a hydropower project in Nepal, except mega projects on the Arun River in eastern Nepal, including 900-MW Arun III and 679-megawatt Lower Arun. They are being developed by Satluj Jal Vidyut Nigam (SJVN). During the visit of Indian Prime Minister Modi to Nepal on May 16, 2022, an agreement was made to develop 695-megawatt ArunIV project as a joint venture of SJVN and Nepal Electricity Authority (NEA) owning 51% and 49% of equity, respectively. As per the agreement regarding third project on the Arun River, Nepal will get 152-megawatt free for its consumption while remaining will be split between the two parties on the 51% and 49% basis. New Delhi had previously authorized the Nepal Electricity Authority (NEA) to sell electricity in India’s power exchange market. But, NEA couldn’t sell electricity produced from Upper Bhotekoshi, Upper Tamakoshi, and Marshyangdi, whose combined capacity is 582.1 MW after Indian authority indicated at the Chinese involvement, particularly in Upper Tamakoshi Project. However, NEA is allowed to sell the energy produced from 15 MW Devighat Hydropower Project, and 24 MW Trishuli Hydropower Project to India Energy Exchange Limited (IEX). Following the visit of Nepal’s Prime Minister Sher Bahadur Deuba to India from April 1–3, 2022, New Delhi permitted Kathmandu to export an additional 326 MW to the energy market in India. The involvement of China’s state-owned companies in critical infrastructure projects, including road construction and hydropower is discernable, as with such investments, Beijing aims to project its image and

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ambitions regionally and globally to eventually fulfill the objective of infrastructure-driven connectivity under BRI. While Beijing desires to accomplish its political and economic objectives with the irresistible participation and activities of the state-owned enterprises, the investment from private Chinese companies and their micro-enterprises in the major tourist destinations of Kathmandu and Pokhara further bolsters China’s interest in Nepal (Photo 5.1). While China’s investment has dramatically increased in Nepal, Indian investment is also not negligible although the investment pledges from India has declined significantly. The involvement of Indian firms is incontestable in different sectors, including manufacturing, education, insurance, banking, energy, telecom, tourism, among others. Dabur India, Asian Paints, State Bank of India, Surya Nepal, Punjab National Bank, GMR India, CONCOR, Hindustan Unilever are some of the Indian firms operating under joint ventures in Nepal. In the period from July 2020 to April 2021, when Nepal received foreign direct investment pledges of Rs26.04 billion for 140 different projects and services, China’s investment commitment topped the list with 107 foreign direct investment (FDI) commitments amounting to Rs18.45 billion, which was more than 70% of the total investment commitments. But, India’s pledges dropped significantly with investment pledges of Rs586 million for seven different projects and services. In the Nepal Investment Summit of 2017, the investment commitment made by Indian firms was even less than that of Bangladesh and Sri Lanka. What Nepal needs to understand from here is, if Indian firms are not encouraged to invest in Nepal, what message will it send to the potential investors from the other countries, who are always willing to know about the share of Indian investment in Nepal, before they make their own. In that case, Indian FDI in Nepal would have a multiplier effect for the investment from the other countries (Rae, 2021). The nature, volume, priority area, and frequency of economic engagement of India and China are the detectable elements of their influence in Nepal, whose location and weak economic performance have placed Kathmandu at the receiving end because the landlocked country is not in a position to avoid the available economic support, irrespective of their source, intent and the probable impact (Wagle, 2022). Nepal has been receiving economic support from its two neighbors in major five areas, including Foreign Direct Investment (FDI), Official Development Assistance (ODA), Trade, Transit, and Trade Facilitation, Hydro Power

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Photo 5.1 Partially opened Chinese market on the backdrop of lockdown in Jyatha of Thamel in Kathmandu, which is also known as “mini-China town”. Nepalis selling their goods in one of the major tourist destinations of Kathmandu are heard complaining of increasing Chinese influence displacing their business (From Author’s Archive)

Development, and Humanitarian support. Both the countries have been offering development assistance to Nepal since 1950 although the US was the first foreign aid provider to Nepal, and their assistance—as informed

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by the timing and size of the project—is clandestinely driven by the ingredients of security interests and grandiosity of the rationale of strategic competition for expanding regional influence. At the beginning, they offered financial support for the construction of highways in Nepal but later competed on hydropower projects in Nepal. While India built Tribhuvan Highway linking Kathmandu with India’s border town Raxaul in 1953–1959 and Siddhartha Highway connecting Nepali mid-hill city of Pokhara with India border town of Sunauli in 1965–1972, China connected Kathmandu with its borders in 1963–1967 by Kodari highway leading to Lhasa. But, during the 2015 earthquakes, Nepal’s only road connectivity with China was badly destroyed, and it hasn’t been able to come back into operation. As an alternative to Kodari highway, China and Nepal decided to use Kerung-Rasuwagadi road, which Beijing aims to link with railways in Tibet under BRI projects.

BRI Projects in Limbo? Although Nepal is officially part of BRI, Nepal is not kept in any of the six belt and road arrangements classified by Beijing under its ambitious connectivity project, which are: China-Pakistan Economic Corridor (CPEC), Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, China-Indochina Peninsula Economic Corridor, China-Central Asia-West Asia Economic Corridor, New Eurasia Land Bridge Economic Corridor, and China-Mongolia-Russia Economic Corridor. As such, participation of Nepal, to a large extent, hinges on how Beijing labels the additional routes under the BRI. Except for Kathmandu’s geopolitical dilemma in implementing the BRI projects, not being embraced in any of the aforementioned belt and road alignments also may add to why BRI projects in Nepal are not being implemented even after four years of the signing of the MOU. India has not only expressed its security concerns over China-Pakistan Economic Corridor in the west and Myanmar-Bangladesh corridor in the east, but has also cautioned the countries like Nepal of the “debt trap,” while implementing the ambitious BRI projects. New Delhi’s strategic and security concerns have further heightened as India may unprecedentedly lose its traditional sphere of influence with the alarmingly increasing Chinese projects in the subcontinent. A dogged persistence has spurred China to connect entire South Asian region with the BRI connectivity projects. According to former Chinese Ambassador to Nepal,

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Qiu Guohong, not only China and Nepal will be benefitted; instead the trans-Himalayan railways under BRI framework aims to connect Tibet with Indian railway network making Nepal a transit state between China and India (Guohong, 2020). As India’s reluctance and American displeasure over increasing Chinese presence in Nepal has aggravated Kathmandu’s geopolitical trials and tribulations in implementing these projects, Kathmandu sagaciously looks for ways to magnify the benefits stemming from the projects outside of BRI. After all, why would Nepal impair its relations with its southern neighbor, and a friendly development partner like US, who is awaiting to see the successful implementation of the MCC project that is portrayed as hostile to China-led BRI, in Nepal. The conflicting interests of the great powers and the series of divides the great power competition has leaked in the political spectrum of Nepal have already endangered Nepal’s claim to neutrality. Delaying the implementation of BRI projects on the one hand; but getting approval for the MCC project from Nepal’s parliament, on the other hand, has raised a big question on the pertinence of Nepal’s foreign policy of “amity with all” (Ministry of Foreign Affairs, 2020). Evidently, decision makers in Kathmandu are awaiting an appropriate time for the implementation of China-led BRI projects. Although no single BRI projects have taken off so far, at present, Nepal is preparing a draft implementation plan for the selection of project, funding modality, monitoring, and supervision of the projects, and human resource management under the leadership of Ministry of Foreign Affairs. While there are different countries implementing BRI projects without an implementation plan, it further divulges the intent to delay the BRI projects in Nepal. Lack of clarity on financing modality has also impeded the selection and implementation of the BRI projects. Nepal has sought donations to avoid the probable “debt trap,” while China has been insisting on soft loans. Nepal had constituted different committees headed by secretaries from foreign, finance and physical infrastructure ministries after the signing of the MoU in 2017. The finance secretary was tasked to coordinate and facilitate the selection of the projects while the foreign secretary was entrusted to hold meetings with relevant stakeholders prior to taking them to the Chinese side. In the same manner, a subcommittee led by secretaries was assigned to provide technical support to the foreign and finance secretaries. But this mechanism couldn’t function and became obsolete without holding a single meeting. It exposes Nepal’s reluctance

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to initiate any projects under BRI, which has developed a kind of discomfort on the Chinese side regarding Nepal’s commitment to the projects. The only tangible development that took place almost after 17 months of the signing of the MoU was in the January of 2019, when Nepal sent a list of nine projects to China to be implemented under BRI framework. During the visit of former Prime Minister KP Oli to China, he read out a list of 35 likely projects to be executed under BRI to his Chinese counterpart Li Keqiang. Later, China asked Nepal to trim down the 35 projects down to nine. The nine projects were upgrading the Rasuwagadhi-Kathmandu Road; road construction from Dipayal to the Chinese border; Tokha-Bidur Road; Kimathanka-Hile road construction; Kerung-Kathmandu rail; 426 MW Phukot Karnali hydroelectric project; Galchhi-Rasuwagadhi-Kerung 400 kV transmission line; 762 MW Tamor hydroelectricity project; and Madan Bhandari Technical Institute. Ahead of the visit of the Chinese President Xi Jinping to Nepal in 2019, Nepal proposed to start BRI projects in Nepal by developing Madan Bhandari University when Chinese Foreign Minister Wang Yi was in Kathmandu. It was the only project that Nepal proposed to China. But it is also in limbo. When China cited COVID-19 for its failure to execute BRI projects in Nepal, decision-makers in Kathmandu must have felt a geopolitical relief. Although the incumbent Deuba-led government was expected to forward few projects under BRI after the parliamentary approval of the MCC project, at least to balance the US interest with that of Chinese, Nepal and China signed no agreements on BRI projects during the visit of China’s Foreign Minister Wang Yi to Nepal on 25 March, 2022. Washington has questioned the idea of trade corridors devised by power. New Delhi has perceived BRI as China’s strategy to secure a contract for Chinese firms. In the Nepali context, the way several projects are being handed over to China on a government-to-government basis has enraged Indian companies bagging the projects through international competitive bidding. Today, Chinese firms are investing in different sectors including infrastructure, hydropower, cement, hospitality, aviation, telecommunications, tourism industry, among others. While China is all-equipped to export its knowhow through the country’s firms under BRI, after having transformed itself with “high-speed rails, roads and electricity grids,” (The Economist, 2018), the new generation of Nepalis are stunned by China’s economic success and desire to get benefitted from the opportunities available in tourism and business. During his visit to Nepal in 2019, when Chinese President Xi uttered of transforming

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landlocked Nepal into a land-linked country, the young generation of Nepalis harbored high hopes from the BRI projects, particularly the trans-Himalayan railways connecting Kathmandu with China’s borders. Unlike the other economic corridors under BRI, particularly ChinaMyanmar Economic Corridor (CMEC) and China-Pakistan Economic Corridor (CPEC) which provide a strategic gateway for China to enter Malacca Straits, the strategic significance of the trans-Himalayan corridor in Nepal lies in getting access to Indian markets. Because, Nepal alone will be a very small market for China, in terms of imports and exports. Thus, as Beijing eyes to sell its cheap goods in the markets of UP and Bihar through Nepal’s borders, New Delhi is exasperatedly alerted by the threats of its economic nationalism being eroded. After all, it is quite strenuous to draw a clear distinction between the power, which lures and emboldens a country to open trade routes and the economic dominance, which, at the end of the day, establishes empires. As India has already perceived the maritime Silk Road as the ambition of the People’s Liberation Army to build a “string of pearls,” New Delhi’s resentment against trans-Himalayan railways is understandable. Furthermore, the strategic engagement between the US and India to contain the rise of China through different agreements and partnerships has made Nepali decisionmakers more alert, circumspect and cautious in dealing with BRI projects, despite the high hopes of Nepali people from China’s flagship projects. Sri Lankan experience, however, reveals that the Chinese economic aid package under BRI may appear appealing but the issues of risks and traps associated with it cannot be ignored (Nye, 2018).

Can MCC and BRI Go Together? To leave the question unadorned: Can China-led infrastructure and connectivity projects under the BRI framework and US-sponsored energy and road projects under MCC move together in Nepal? Needless to say, it depends on the ramifications of the changing dynamics of the US-China relations and India-China relations. But, more than that, it hinges on how Nepal’s balancing strategy further unfolds in the days to come. Assessing the history of foreign aid in Nepal, the geostrategic dimension attached to it cannot be suspended (Sharma & Seddon, 2020). Particularly, during the time of the Cold War, China, the US, and India acutely competed to fund critical infrastructure projects in Nepal. Today, once again, the ambitious BRI connectivity projects and increasing Chinese investments

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in Nepal have made the US and its strategic partner India highly alert (The Kathmandu Post, 2019), precipitating a great power game in the Himalayas (Stobdan, 2019). In such an adverse context, BRI and MCC are projected as two antagonist projects shrewdly keen to remodel Nepal’s infrastructure and connectivity. While Beijing lobbied with Nepali decision-makers to prevent the parliamentary approval of the MCC project, the US has repeatedly cautioned Kathmandu that Nepal could fall into a Chinese debt trap. Nepal’s position is more ambiguous as the strategically-located country cannot afford to choose one over the other. Although Nepal’s entry into BRI didn’t require parliamentary ratification and it was relatively uncomplicated. Kathmandu couldn’t start implementing BRI projects while US-sponsored MCC was at the loggerhead. As such, Nepal’s geopolitical dilemma further heightened. Since Nepal has invested substantial resources in bagging MCC, a total rejection would have harmed different dimensions of Nepal-US relations. Possibly, upon the similar realization, it has been ratified with an interpretive declaration. Similarly, further delays in implementing China-led BRI projects smear Nepal’s prior commitments to China’s flagship project. Many powerful Nepali leaders, including former Prime Minister Jhalanath Khanal have argued that MCC is a major component of the US-led IndoPacific Strategy to contain China, and is against BRI (The Kathmandu Post, 2020). Even though the MCC project may offer numerous benefits by enhancing the electrical grid connectivity with India and improving the road connectivity in rural Nepal, Nepali political parties remain sharply divided. The nature of strategic competition between the US and China at the global and regional fronts has pierced Nepal in such a manner that the ratification of the MCC project by the Nepali parliament was superfluously delayed (Jha, 2020). Although legal scholars have urged Nepal to try its luck on the path pursued by Sweden’s “Partnership for Peace” program to reap benefits from both BRI and MCC by revitalizing King Birendra’s Zone of Peace proposal (Malla, 2020), it’s easier said than done because of three important reasons: Firstly, such proposal reignites intricacies for India remains disenchanted by Nepal’s Zone of Peace proposal; Secondly, as Sweden’s “Partnership for Peace” was more about establishing trust between NATO countries and non-NATO countries in Europe, its applicability may not be justifiable in the non-militaristic investments on Nepal’s connectivity, infrastructure, and energy. Thirdly, unlike Swedish attempts

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to neutrality, Nepal has shuttered, instead of being loud and clear in both advocacy and practice of its neutrality. To Nepal’s external world, neither it is occasional, nor is it permanent. Although it is confined to Nepal’s foreign policy, Kathmandu hasn’t been able to make it free from ambiguity. Pretentious, fanciful and quixotic resistance to the weighty geopolitical realities only incites a situation of gratuitous confusion, undue misperceptions, and upsetting discomfort. Still, Nepal’s claim to neutrality hasn’t move beyond the short-term needs to embrace a pragmatic foreign policy rooted in ground realities. Despite being an oldest independent country in the South Asian region, Nepal’s history of foreign policy has been heavily driven by the policy of balancing instigated by the competition between its immediate neighbors, and great power rivalries beyond its neighborhood. Thus, theatrical delays in approving the MCC project from the parliament and series of procrastinations in the implementation of BRI projects expose the internal and external vicissitudes attached with historical consciousness in the policy of balancing. Following the approval of MCC projects from the parliament, Nepal has now apparently got some room for maneuver to implement a couple of BRI projects as soon as a breakthrough is attained in project implementation agreement. The US, being the the second country after Britain to establish diplomatic ties with Nepal, MCC’s fate in Kathmandu certainly determines the US policy towards Nepal (Wagle, 2020). Thus, Nepali decision-makers should be meticulous while putting balancing strategy into practice and and without further ado, cease branding the Nepali state as “pro” Chinese to fairly justify Nepal’s foreign policy’s reaffirmation on equal, cordial, and sovereign relations with all the countries around the world. While there is the jejune understanding among the policymakers in Kathmandu that the US has no “independent Nepal policy” and perceives Nepal from Indian lenses, possibly MCC endorsement has signaled a possibility for Nepal to widen its engagement with the US and persuade the latter in perceiving Nepal from the Nepali lens. During his Nepal visit in the November of 2021, Donald Lu, Assistant Secretary for South and Central Asian Affairs stated that the US perceives its relations with Nepal separately from that with India to ensure that the bilateral ties with South Asian countries are not relegated while prioritizing India. Although Lu believed that while nourishing strategic partnership with India, relations with other countries shouldn’t be lost “bureaucratically,” the silence that the US maintained while India imposed a blockade on Nepal in 2015 is quite often cited by the Nepali folks to argue how the US perceives its relations with

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South Asian countries, including Nepal through Indian lens. The way the US remained a mute bystander, without any objection against the coercive Indian blockade on Nepal, pushed landlocked Nepal towards China. But, today, Washington is speedily advancing its relations with Kathmandu under the purview of the hard-nosed US policy and operations to contain the rise of China and to fulfill that objective, the US has demanded Kathmandu to lessen the receipt of Chinese projects by offering more development assistance and support from Uncle Sam.

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Mearsheimer, J. J. (2010). The gathering storm: China’s challenge to US power in Asia. The Chinese Journal of International Politics, 3(4), 381–396. Menon, S.S. (2020 December 7). India-China ties: The future holds ‘antagonistic cooperation,’ not war. The Wire. https://thewire.in/external-affairs/ india-china-ties-expect-antagonistic-cooperation-future-not-war Ministry of External Affairs. (MEA). (2015, June 25). External Affairs Minister’s Speech at International Conference on Nepal’s Reconstruction in Kathmandu. Ministry of Foreign Affairs. (2020). Nepal’s Foreign Policy. MOFA, Government of Nepal. MoFA. (2019). Joint statement between Nepal and the People’s Republic of China. MoFA. (2020, June 20). Press statement on recent development in Galwan Valley area between India and China. Ministry of Foreign Affairs. National Security Strategy of the United States. (2017). https://www.whiteh ouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905.pdf Nepal Rastra Bank (NRB). (2021). The economic survey. Ministry of Finance, Government of Nepal. Nye, J. (2018, January 4). China’s soft and sharp power. Project Syndicate. Oertel, J. (2021).US-China confrontation and repercussions for the EU. European Council on Foreign Relations. https://ecfr.eu/article/us-china-systemicrivalry-repercussions-for-the-e Park, Y. J. (2021). Chinese investment in Africa involves more than megaprojects. Private Enterprises also are making their mark. The Washington Post. https://www.washingtonpost.com/politics/2021/04/17/chinese-invest ment-africa-involves-more-than-megaprojects-private-enterprises-also-are-mak ing-their-mark/ Perthes, V. (2021). Dimensions of rivalry: China, the United States, and Europe. Springer. https://doi.org/10.1007/s42533-021-00065-z Rae, R. (2021). Kathmandu dilemma (p. 156). Penguin Random Books India. Ramachandran, S. (2020, December 28). China wades into Nepal’s political crisis. The Diplomat. RAND. (2020). U.S. versus Chinese powers of persuasion. Research Brief. RAND Corporation. Sharma, J. R., & Seddon, D. (2020). Putting the MCC in context. Nepali Times. https://www.nepalitimes.com/latest/using-the-delay-in-mcc-to-dissect-it/ Sopel, J. (2021). A US plan to counter China. BBC. https://www.bbc.com/ news/world-us-canada-57452158 Stobdan, P. (2019). The great game in the Buddhist Himalayas: India and China’s quest for strategic dominance. Vintage. Strategic Competition Act. (2021). 117th Congress, Ist Session. To address issues involving the People’s Republic of China. Senate of the United

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States. https://www.foreign.senate.gov/imo/media/doc/DAV21598%20-% 20Strategic%20Competition%20Act%20of%202021.pdf Stromseth, J. (2020). Beyond binary choices, navigating great power competition in Southeast Asia. Brooking Institution. Tao, L. (2017). From Yam to bridge. The Kathmandu Post. https://kathmandu post.com/opinion/2017/02/03/from-yam-to-bridge Thakker, A. (2021). U.S.-India cooperation in the Indo-Pacific. Center for Strategic and International Studies. https://www.csis.org/blogs/adapt-adv ance-refreshed-agenda-us-india-relations/us-india-cooperation-indo-pacific The Economist. (2018, July 28). Gateway to globe, briefing China’s belt and road initiatives. The Kathmandu Post. (2019). Chinese investment should serve the interest of Nepal and not just China, US official says. https://kathmandupost.com/nat ional/2019/02/26/chinese-investment-should-serve-the-interest-of-nepaland-not-just-china-us-official-says The Kathmandu Post. (2020, January 9). Why the MCC compact courted controversy in Nepal. The Rising Nepal. (2019). No dilemma on MCC ratification: Gyawali. https:// risingnepaldaily.com/main-news/no-dilemma-on-mcc-ratification-gyawali United Nations Committee for Development Policy (UNCDP). (2021, February 26). CDP recommends for Nepal’s graduation from the LDC category. US Embassy in Nepal. (2020). MCC in Nepal, top ten facts. https://np.usemba ssy.gov/mcc-in-nepal-top-ten-facts/ Wagle, A. (2020, November 9). What the Biden win means for Nepal. The Kathmandu Post. https://kathmandupost.com/columns/2020b/11/ 09/what-the-biden-win-means-to-nepal Wagle, A. (2022). Nepal’s economic development. In C. D. Bhatta & J. Menge (Eds.), Gaida’s dance with Tiger and Dragon (p. 35). Friedrich Ebert Stiftung. White, J. T. (2021). After the foundational agreements: An agenda for US-India defense and security cooperation. Brookings. Yanqi, H. (2020). Press conference on June 3, 2020. Embassy of the People’s Republic of China in Nepal. Yi, W. (2021). China hopes next U.S. administration will restore normalcy to bilateral ties: FM. Xinhua News Agency. http://www.xinhuanet.com/eng lish/2021-01/02/c_139636008.htm Yiwei, W. (2020, October). Interview to Nepal Khabar. Zheng, S. (2020, July 9). China-India border dispute may force South Asian neighbors to pick a side. South China Morning Post. https://www.scmp. com/news/china/diplomacy/article/3092510/china-india-border-disputemay-force-south-asian-neighbours

CHAPTER 6

Salability of Perceiving Nepal as a Small Power

Branding countries as “small” and “big” is a colonial project. If countries are really considered equal in terms of their sovereignty, how some can be labeled as small and weak and others big and powerful. Such an idealistic fervor is, however, instantly renounced in front of the materialistic capabilities steered by a country’s size and influence. Small countries themselves are so much fascinated by the concept of power that they are eager to project themselves as small power instead of small states. While discourses have resurfaced emphasizing to perceive Nepal as a small power, it is also the right moment to mull over the salability of such discourse, and the impact of unlearning Nepal as a small state and reconceptualizing it as a small power. Hence, this chapter introduces the concept of small power and debates on how small states and small powers aren’t necessarily and conceptually distinguished as two separate concepts, and are used interchangeably. Although nation branding is a key element in a country’s soft power ambitions, this chapter highlights how the salability of such a discourse is implausible in the present context because of the lack of resilience in Nepal’s external engagements. While Nepal’s claim to neutrality, too, remains unclear and ambiguous, it is not salable as an instrument of small power. Also, this chapter quixotically engages with the idea of smallness, and queerly argues that there is nothing wrong in being small, at least in terms of size, geography, population, and clout, but it is always erroneous to incessantly drive your foreign policy behavior © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. Bhattarai, Nepal Between China and India, https://doi.org/10.1007/978-3-030-99974-2_6

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with a small state syndrome. In the Nepali context, small state syndrome has severely diluted Nepal’s claims to neutrality precluding innovation and pragmatism in Nepal’s foreign policy priorities.

Exploring Salability Chairman Mao We don’t want to harm you, nor do you want to harm us; King Mahendra We fully understand; Chairman Mao We are equals; we cannot say one country is superior or inferior to the other;

This conversation, extracted from the book, Mao Zedong on Diplomacy, published in 1998 unveils Mao’s affirmation on sovereign equality irrespective of a country’s size, population, and influence. In reality, however, they are inescapable in the state-driven international system characterized by anarchy and self-help. Big countries have big economy, big influence, big defense expenditure, and a big presence abroad. While for the small countries like Nepal, it is just the reverse (Bhattarai, 2017). Countries with big markets not only sell their goods and services to the world but also their image as a powerful economy. Countries with big defense budgets not only sell their influence and clout but also promote their image as a powerful country. While the number of small countries with successful experiences has increased today, we may not equate bigness with the success. In today’s globalised world, small countries are getting richer and economically competitive. They offer a favorable environment for doing business. They have received the highest scores in the United Nations Human Development Index. They are also on the list of the world’s largest exporters of capital. Small countries are the least corrupt and have received the finest scores for promoting rule of law and good governance. Some of the small countries have the best education systems. Thus, size is not the only factor in influencing a country’s success or failure (Koh, 2019). Today, small countries are selling and celebrating the success behind the policies, institutions, and strategies they have pursued. Their experiences are salable as they flourishingly inspire some other countries willing to believe that bigger is not necessarily better. But, alongside these countries, there are few other countries that are strategically-located, and are desperate to relinquish their identity as a small state. Rather, policymakers in such countries prefer to aggrandize and stamp the strategically-located states as small power, which they

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deem is more affirmative, auspicious and encouraging, because power and state, by their nature and scope, reinforce each other, while the sense of smallness cannot drive the state apparatus effectively. Strategic thinkers and security experts in Nepal, today, are haunted by a similar conjecture. To them, smallness is uglier and unattractive, and as such, is not salable or cannot promote Nepal’s image. Thus, perceiving Nepal as a small power, and dispersing the same discourse—despite the national power deficiencies that the post-conflict state faces today—they think, would enhance Nepal’s image abroad. But, mere branding without appropriate policies and strategies won’t yield expected outcomes. In Nepal, public orientation towards Nepal’s smallness begins from childhood, particularly through the academic socialization they undergo in their schools. Because, history textbooks outrightly mention “Nepal as a small country located between two big countries, India and China.” It is the key source of Nepal’s small state syndrome (Malla, 2010). Nepal is considered small only because of the colossal size of its two immediate neighbors. As such, Nepal’s location between the Gulliverian neighborhood makes it small (Bhattarai, 2017). Any European country with the similar size as of Nepal would not be perceived as a small country. Candidly, Nepal has three worldviews in relation to its size and geography—classical, modern, and contemporary. The classical view goes back to Prithivi Narayan Shah’s “yam” theory, which identifies Nepal as a “yam” between two boulders. The modern view can be traced back to the policies adopted during the Panchayat period under the leadership of King Mahendra and King Birendra, who recognized the benefits of multilateralism for Nepal, originally because of its geostrategic location. The contemporary view is rooted in the strategy to “land-link” Nepal with the seaports and dry ports in India and China or in other words, a multidimensional connectivity-driven development strategy of Nepal. Even though Nepal devised a militaristic and expansionist policy after its unification in 1769 until the Anglo-Nepal war of 1815, the “yam” theory broached by the unification leader Prithivi Narayan Shah resonates the small state syndrome stemming from its location. Until Nepal became member of the United Nations in 1955, Nepal exercised the policy of appeasement towards British colonizers to defend its sovereignty and territorial integrity, which designates the conventional security threats faced by the small countries.

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Nepal’s entry into different international, regional, and multilateral organizations, including Non-Alignment Movement, South Asian Association for Regional Cooperation, United Nations Peace Keeping Operations during the partyless Panchayat period from 1960 to 1989 indicated Nepal’s survival strategies. Nepal’s internationalist approach was driven by the strategic exigency to do away with the threats emanating from its neighborhood. The strategy of land linking Nepal with China and India, however, should be understood in the context of the rise of China, as Nepal’s southern land border with India is already open and porous, Kathmandu couldn’t remain untouched by China’s connectivity-driven infrastructure development through “high-speed rails, roads and electricity grids” (The Economist, 2018). Being landlocked, although Nepal has got various privileges, preferential treatments, grants, and subsidies in international trade and commerce, policymakers in Kathmandu appraise Nepal’s landlocked-ness, not only as an impediment to Nepal’s development but also a perpetual source of Nepal’s smallness and small state syndrome. While Nepal’s source of smallness typically emanates from its location, the rise of China has once again strategized Nepal’s location. Nepal’s eagerness to unlearn Nepal as a small state and reconceptualize it as a small power suggests two strategies: Firstly, a coping strategy that Nepal has embraced in the context of the rise of China. Secondly, hell-bent on fashioning an encouraging and promising image of Nepal, which is phenomenally prompted by Kathmandu’s refusal to be India’s younger brother, however signals Nepal’s search for equality in relations between the countries. In 2016, when late External Affairs Minister of India Sushma Swaraj said that India was an “elder brother” to Nepal, not a “big brother” (The Kathmandu Post, 2016), maybe she was trying to hint at the age-old civilizational relations between the two countries, but Nepal found it patronizing. For Nepal, relations between the states cannot be brotherly or elderly; it’s just equal and sovereign. But, Krishna Prasad Bhattarai, who was the interim Prime Minister of Nepal following the political change of 1990, had stated in his first official state visit to India that the two countries share “brotherly” relations with each other (Nepal–India Joint Statement, 1990). Because of India’s “Big Brother” attitude—which was allegedly present in the coercive 2015 blockade—Nepal started exploring trade and transit routes via China. It was not only a search for alternative trade routes. It was also a search for equality and strategic autonomy. But the pertaining

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question is: How far is it salable, or in what ways such reconceptualization could impress and inspire other countries placed in the strategic location as of Nepal? The salability of such a discourse scrupulously necessitates the formulation and espousal of creative policies and ingenious strategies that Nepal may implausibly adopt to persuade both of its powerful neighbors about sovereign equality. Above all, it’s salability lies in the effectiveness and pertinence of the foreign policy institutions Nepal may build to exercise its diplomacy in managing friendly not fraternal relations, equal not brotherly relations. Thus, instead of mere branding and sheer reconceptualization, of utmost importance to excogitate appropriate plans and policies for salability. Appreciating the policies adopted by Denmark and also realizing its salability Francis Fukuyama has said, “Most people living in rich, stable, developed countries have no idea how Denmark itself got to be Denmark” (Fukuyama, 2011). For a long time, a country’s size determined its power, and smallness was associated only with timidity and weakness. In today’s context, the consequences of climate change, artificial intelligence, driverless cars, and aging populations have made us realize how being small may be lucratively advantageous for a country’s growth and prosperity. Thus, instead of being snubbed by Nepal’s smallness emanating from its gigantic neighborhood, it’s prudent and advisable to utilize the benefits of having a relatively small size and population in comparison to its immediate neighbors. More than size, location, and population, formulation of adequate policies and their effective implementation is more crucial and pressing. With a small population of 40,000, Liechtenstein has distinctively accomplished in health, education, and policy systems, whose reigning prince Hans-Adam II equates government to a utility enterprise providing cost-effective and reliable services to its nationals. The success story of Liechtenstein signifies that it is comparatively easier for smaller countries to build cohesive and egalitarian societies and such an experience is salable and exportable to different parts of the world inhabited by small countries. Today, state’s power is gradually decoupling from its size as the world is increasingly connected through the internet, social media, free trade and commerce, mobility, and modern transportation network. Equally, a realization is budding how it is easier for successful small countries (unlike Haiti, Zimbabwe, or Lebanon) to disperse power than to concentrate it, latter being the attribute of Great power, which lures by its nature the strong rather than the wise, and tyrants rather than democrats (Kohr, 2001). Thus, instead of cursing its size and geography, it’s sensible and

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suitable for Nepal to acquire knowledge about Singapore’s healthcare system, Switzerland’s denial to indebt future generations, and Finland’s approach to education. It’s where the “bigness” of “smallness” resides and burgeons. Such success stories, to all intents and purposes, are salable and promote a country’s image abroad by inspiring and exciting other countries, instead of pretentiously employing the political rhetoric of small power, which itself is conceptually and ontologically not distinguishable from what do we understand by small state in the wider academic literature.

Small States or Small Powers Power in world politics is easier to experience than to measure it (Nye, 1990). Because power is extensively context-driven (Nye, 2011). Despite the definitional divergence, different scholars have understood power as an ability of a country to influence world politics in line with its interest. But, any attempts to systematically measure such an ability is impossible (Nye, 1990). Measuring power by assessing its outcomes will only help to understand the distribution of power in relation to a particular event (Mearsheimer, 2001; Nye, 2011; Wohlforth, 1993). Thus, to avoid such difficulties, scholars have been measuring power in terms of available resources, wealth, and military equipment (Kennedy, 1987; Mearsheimer, 2001; Nye, 2011) to highlight how states possessing more wealth and large military tend to exert increased influence than countries with fewer resources, wealth, and military capabilities. But, while measuring military spending, Gross Domestic Product (GDP) or even Composite Indicator of National Capability (CINC) that integrate demographic, economic, and military strength (Singer et al., 1972), scholars often fail to reduce the cost that the countries pay to security forces, as security burden often consumes wealth. Measuring power with the help of gross indicators ignores the cost associated with it, and as a result, power is not measured adequately. Despite all these intricacies involved in measuring power, countries are recognized in terms of power and are labeled as superpowers, great powers, rising powers, emerging powers, regional powers, middle powers, and small powers. In the international system, they have different attributes, functions, and roles. Great powers have a major role to play in international politics, particularly in driving the issues of global peace and security. Great powers

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are distinguished from other powers on the basis of their military capabilities and their influence on the global scale. Jack S. Levy has defined Great Power in his book, War in the Modern Great Power System, 1495– 1975. While making a distinction between Great Power and Superpower, it is important to understand how all the superpowers were once great powers, but the reverse is not possible. For instance, before World War II, the Soviet Union and the US were great powers (Levy, 1983). It was only after the end of World War II, the world recognized them as superpowers, as their nuclear capabilities had the ability to affect world politics in an unprecedented manner. Rising power, however, has the capability to pose a severe challenge to an established superpower, resulting in a condition of “Thucydides Trap” (Allision, 2017). Today, China is perceived as the model of a rising power, which is en route to becoming a superpower and reaching to fill the vacuum left by the collapse of the Soviet Union in 1990. While China is perceived as a rising power, India’s economic growth and nuclear strength are often branded as the hallmark of an emerging power, which means the country has freshly displayed the attributes of emerging as a recognized power in the international system. India has always been a regional power in the South Asian region. The idea of South Asia, however, appears more recent than the idea of India. But, it was not a major power until the beginning of the twentyfirst century. Less powerful in comparison to the clout of great powers, major powers are inevitably and strategically involved in the great power competitions. If Canada, Sweden, and the Netherlands played the role of middle powers during the Cold War, today, Australia, India, and Japan are playing the role of middle powers in Sino-US strategic rivalry. Small power, however, is not defined by any specific qualities it owns or lacks; rather, by a position it occupies in its own and others’ eyes (Rothstein, 1968). Hence, it is more about perception, and is plainly relative. For Rothstein, small powers cannot obtain security primarily on their own capabilities, and need to rely fundamentally on the support and assistance of other states and institutions (Rothstein, 1968). Keohane also believes that small power is a state, whose leaders consider that it can never, acting alone or in a small group, make a significant impact on the system (Keohane, 1969). These two definitions suggest how small states and small powers aren’t conceptually and behaviorally distinct and a mere reconceptualization wouldn’t alter the smallness instigated by a country’s size, population, or geography. Only apposite policy choices, befitting strategies and prerequisite institutions could lend a helping hand

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to decouple the idea of the power from the state’s size, geography, and population. Historically, the size of a country, in terms of both land and population, has been associated with power. Because, it offered three major advantages. Firstly, country with a large population allows defense expenditure be amortized over more taxpayers, and as such, lessens per capita expense. Secondly, geographical size is expected to generate more resources, and whose commodification cuts dependency on foreign imports and boosts up country’s self-reliance. Thirdly, a large domestic market and consumption level gives impetus to country’s economy by manufacturing more and with stable demand. Until the beginning of the industrial revolution, much of the wealth was created by adopting the policy of conquering, conquesting, and colonializing. As a result, size was seen as a means to an end. Although Alexander the Great, Julius Caesar, Napoleon, Victorian Britain, and Hitler had different inspirations, their primary objective was the same, i.e., expanding the size of their empire. The largest empire built in history was the British Empire under George V. But the same empire, carrying “bigger the better” mantra was able to maintain its control over only 25 percent of the world’s population and less arable land, when the empire was at its peak in 1920 (Breiding, 2019). Ultimately, it crumbled down under its own weight like so many empires before it. Emergence of new countries from the disintegration of empires implies how large-sized and heavily populated countries face the problems of managing ethnic diversities, linguistic differences, conflicting social norms, and contested nationalism. Therefore, the advantages of size for affluence depend on whether a country adopts closed or open policies. Although Nepal’s current population size of 29.1 million (as per the preliminary result of the National Census 2021) and area of 147,561 square kilometers doesn’t make it a small state, its location does, which has engendered a small state syndrome in Nepal’s foreign policy while dealing with its immediate neighbors. Still, it’s not only because of the gigantic size of China and India that Nepal looks small; it’s more because of the securitization policies that its immediate neighbors have affixed in their foreign policy priorities towards Nepal. In response, Nepal’s policy is chauffeured by the survival strategies, which, in turn, further aggravate Nepal’s smallness. While miniaturization is inescapable in both the terminologies, small states, and small powers, Nepal needs to take resort in prudent, navigable and utilitarian policies to rigorously escape the sense of smallness.

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Branding itself as a small power singlehandedly doesn’t alter Nepal’s location or its neighbors. Associating any state with power, linguistically, instead of acknowledging its capabilities from precise geographical location, won’t remodel its smallness, at least until the country is capable enough to develop the indispensable amount of power. In today’s interdependent world, power doesn’t stem only from size and population, but through miscellaneous and diverse sources, including the ingredients of comparative advantages and connectivity. In the Nepali context, hydro and tourism are comparative advantages while enhancing multidimensional connectivity with its two immediate neighbors. Their economic significance is also realized in Nepal’s annual plans, policies, and programs, whose effective implementation may wax their salability to the other small counties, and promote Nepal’s image abroad. Nepali foreign policy experts and security analysts have emphasized unlearning Nepal as a small state and reconceptualizing it as a small power, which reveals Nepal’s fascination with power. That fascination, however, goes back to its history. In the past, at least until 1815, Nepal was an expansionist power in South Asia. Tibet was almost Nepal’s colony until China increased its presence. By the first decade of the nineteenth century, the Gorkhali rulers from Nepal had succeeded in bringing the Himalayan region from the Tista River in the east to the Sutlej River in the west, under their control. During the process of expansion, about 50 principalities were annexed and their rulers were overthrown (Regmi, 1999). The small hill state of Gorkha, with Kathmandu as its new capital, was emerging as an empire until it happened to clash with the British East India Company in 1815. After the war, Nepal lost almost one-third of its territory. Still, Nepal’s adventurism was not over. To suppress the Indian Sepoy Mutiny of 1857–1858, Nepal sent its men, although it was done by the Rana regime in Nepal with an objective to appease British East India Company. Similarly, Nepal also sent its troops to assist the Indian government in dealing with the Hyderabad question in 1948. The global image of Gurkha warriors further spikes Nepali people’s fascination with power. While elucidating to any outsiders, they take no less time to cite the popular maxim about Gurkha soldiers, “If a man says he is not afraid of dying, he is either lying or is a Gurkha,” not only to discreetly glorify the unmatched bravery and gallantry displayed by Gurkhas during the major wars, but also to prudently divulge how warring tribes made the Nepali state (Tilly, 1975) while British colonialism was expanding in the South Asian region. But, in today’s world, countries cannot promote

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their image by flaunting the armed forces. Instead, by regulating them. Although Singapore, Israel, and Switzerland have militia armies (which means they have handguns in their homes), these countries have low incidents of gun abuse. In Israel, death caused by guns is only about two per 100,000 people despite Israel having the highest number of guns owned by civilians (Kershner, 2018). Thus, what is salable to the world is your germane policies and their successful implementation, unlike the superfluous fascination towards military adventurism in history. Nepali security and foreign policy experts are often heard exhorting Nepal to tread on the path pursued by Israel, Singapore, and Switzerland, owing to the salability of the policies (for the strategically placed countries) they have espoused. Today, the definition of power has changed. The economic dimension of power has undeniably received more importance than the military dimension of power. Joseph Nye’s policy recommendations to the US foreign policymakers during the US’s campaign on War on Terror to use power more softly and smartly, offer an impression that soft power apparatus including economy, diplomacy, partnership, and multilateralism has gained more prominence over the traditional parameters of power including size and military. As such, the acceptable, appropriate and salable way to exhaustively unlearn Nepal as a small state is conceivable through effective conduct of its foreign policy and diplomacy; by increasing its trade in services and exports through successful economic diplomacy; by engaging effectively in multilateral forums; by inviting more foreign direct investment; through good governance and devising more inclusive institutions back home. Limiting the reconceptualization to mere discourse without any policy accomplishments won’t yield any desired outcomes, except as a political rhetoric. Aggrandizing several episodes from its history and reinvent Nepal’s worldview in doing away with its smallness may lead Nepal nowhere, unless it devises pragmatically inclusive and perspicaciously scientific institutions aimed at fulfilling the contemporary requirements. Because, as James Mill said, “only rude nations seem to derive a peculiar gratification from pretensions to remote antiquity” (Mills, 1858). During the time of the Cold War, failure to transform its capability into policy was a principal challenge faced by the small countries because of their limited international involvement, vulnerability to external pressure, limited policy choices, limited apparatus for conducting foreign policies, and restricted maneuverability by their strategic location (Barston, 1987). Still, they used the United Nations as a “forum and a force” and claimed

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non-alignment as a significant diplomatic invention. As such, small states “rose to prominence, if not to power” (Keohane, 1969). Although the effectiveness of non-alignment as a policy is still a matter of debate, the general understanding was that it allowed small countries to play international roles “beyond their individual capacity to do so” (Jansen, 1966; Jackson 1983). Three decades after the end of the Cold War, non-alignment continues to drive Nepal’s foreign policy. After the nonalignment movement came into existence officially in 1961, Nepal has used the forum to make itself more visible in the international arena and show case its influence at promising moments, which is, however, inconsistent to its accepted level of power. To the small countries, such occasions offer not only additional room for maneuverability, but are the fundamental platforms for their survival in the international system (Fox, 1959). Not only because of the way new alliances are being devised at its doorsteps today and the world is heading towards multipolarity, but more being of the way Nepal is located between the two powers, Kathmandu retreats in NAM. But it cannot be denied that Nepal has mostly shifted its interest towards India, and only at the time of worsening ties with New Delhi, towards China, which has made Nepal’s non-aligned policy more as a ritual and less functional. Here, the pertaining questions are: Firstly, do Cold War survival strategies like NAM help Nepal to cope with the present-day challenges trigged by the new kind of Cold War? Secondly, while Nepal’s southern neighbor India, (which used to lead the Non-Alignment Movement earlier), has decided to pursue the multialigned policy. Against the same backdrop, whether it will be easier for Nepal to continue with NAM? While responding to the similar queries of the strategic affairs expert C. Raja Mohan on July 21, 2020, India’s External Affairs Minister S. Jaishankar stated that: Non-alignment was for a specific era and a particular context. There were two aspects to it. One, independence. I think that remains the factor of our continuity. The other came in the 50s and 60s when we were much weaker. But today, people turn to us for solutions. We are not bystander and have a contribution to make. Connectivity, maritime security, terrorism, climate change are big issues and we are a part of the discussion. And third, we are to grow by leveraging international situation. And you can’t do that by staying away. The era of great caution and much greater sense on multilateral relations is behind us. We need to take risks.

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In the post-1950 period, when Nepal used to seek New Delhi’s guidance in the decision-making areas of foreign affairs and defense, Nepal’s foreign policy had adopted the Indian version of non-alignment without any solemn inquiry over its relevance for Nepal (Rose & Scholz, 1980). But, as soon as Kathmandu commenced its foreign policy of “equal relations with all the countries,” Nepal abandoned the Indian definition of non-alignment in global Cold War terms, and situated it in the SinoIndian conflict after the 1962 war. Since then, Nepal hasn’t made any significant deviation or departure from NAM, because with the help of which Nepal has been able to maximize its benefits from the rival powers. Nepal’s predicament over US-sponsored MCC and China-led BRI implies the same. Thus, Nepal’s continued commitment to NAM not only evinces its indifference towards the perceptible shift in the global power structure, but a ploy to extract benefits from great power competition and particularly Sino-Indian conflict. Nepal’s discernible indifference to the sweeping changes induced by multipolarity and palpable shift in global power structure exposes its smallness. More than that Nepal’s continued adherence to NAM without required debates over its relevance signifies Nepal’s lilliputian dilemma. Thus, just pretentiously branding Nepal as a small power over small state won’t functionally alter Nepal’s foreign policy behavior which is driven by Cold War survival strategies, while a new Cold War scare has already reshaped the relations between the countries in the world. International and regional organizations have also provided small countries more room for maneuverability by offering them prospects to maintain international interactions and draw support on the issues of international concerns from friendly and like-minded countries. While the United Nations has been a focal point for raising the issues and concerns of the developing world, the regional organizations like ASEAN and SAARC have made it easier for the small countries to negotiate with the powerful countries more effectively. Even though small countries face numerous challenges in an international environment, there is room for maneuverability. For instance, the 18th SAARC summit provided Nepal an opportunity to demonstrate its leadership skills by creating an atmosphere for a “warm handshake” between Indian Prime Minister Narendra Modi and Pakistani Prime Minister Nawaz Sharif (PTI, 2014). It signaled Nepal’s initiatives in maintaining regional peace and stability by revitalizing SAARC through Indo-Pak rapprochement. But, at times, Nepal has also used the regional entity to fulfill its act of balancing. For Instance,

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Nepal united with Pakistan and Bangladesh to support China’s entry into SAARC as an observer member in SAARC during the Dhaka Summit in 2005. Since then, China has made gradual progress in enhancing its relations with the South Asian countries, riling India. Today, small countries surrounding India are lobbying to provide full membership to China in SAARC, not only to get benefitted from China’s rise but also to balance India’s influence in the region. To them, Sino-Indian rivalry offers a prospect to maximize their own benefits, which, however, stands in stern opposition to Nepal’s claim to neutrality. Such kinds of “situational and interim advantages” (Vital, 1971) also unearth Nepal’s smallness. In fact, Nepal’s case suits Keohane’s list of system-ineffectual states (Keohane, 1969) because neither Nepal has the capability to determine the system as superpowers do, nor it has developed a capability to influence the international environment as system-influencing states do. Nepal, at present, is also unable to affect the system through regional organizations and alliance formation. Thus, until Nepal’s impact on the international system and regional power politics remains almost negligible and more limited to its own survival and security at the sub-systemic levels instead of the border international system, it doesn’t matter whether Nepal is branded as a small power or a small country. Although the traditional concept of the state as power (Sabine, 1920) cannot be entirely rejected, the small countries can rarely “create their own opportunities” (Rothstein, 1968) and survive as the “consumers of security” (Knudsen, 2002). As governments execute power on behalf of the state, it is quite important to formulate unpretentious, convenient and appropriate policies and usher in effective and problem-solving strategies to adapt to the changing dynamics of international relations, as there is enough room for maneuverability beyond the survival strategies.

Small State Syndrome Small states are startlingly diverse. Their diversity is discernible from their size, population, natural resources, economies, location, vulnerabilities, and influence. Although Mongolia is bigger in size, its small state syndrome, to a large extent, emanates from its location. Although Nepal’s size and population don’t make it a small state, its foreign policy endures the small state syndrome, to a large extent, because of its Gulliverian neighborhood. Although Switzerland remains the most competitive economy in the world, and is well-known for its neutrality, its geography

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hauls the landlocked federal Republic into the list of small countries. Most of the wealth of Luxembourg is obtained from its steelwork and is the wealthiest country in European Union, but when it comes to size, it is identified as a small country. In terms of their capabilities, however, Switzerland and Luxembourg may not be considered small. Because, to a certain extent, they have been able to get rid of their smallness—stemming from their size—with the help of the functional policies and operational strategies they have embraced. Even the geostrategically located small-size country like Singapore has been able to develop itself as a global financial hub with one of the highest per capita GDP in the world. It’s the result of the trade policies and economic development model that the island country has pursued for a long time. Therefore, the capabilities transferred through sound policies insinuate a modus operandi to escape the small state syndrome emanating from a country’s size, population, and geography. Although there exists no universal definition of what constitutes a small state, the quantitative variables rely on the geographic or demographic factors, whereas the qualitative variable underlines the product of the relationships between the countries, its international position, and influence on the international system (Kosary, 1987). To the Commonwealth and the World Bank, countries with a population below 1.5 million are considered as small. But, Forum of Small States (FOSS), an informal grouping at the United Nations (UN) identifies countries with populations fewer than ten million people as small states. Population with less than 500,000 people are perceived as microstates, which are small island countries including Tuvalu, Seychelles, the Bahamas, and the Maldives among others. Least developed countries, resource scarce countries, landlocked countries are also unofficially perceived as the small countries. Thus, the perspectives on small states are as diverse as the traits of small states. For instance, although measuring population has been deemed as the most candid way, it too varies. Because, although a threshold of 1.5 million is used by the World Bank and the Commonwealth to identity a small state, large states including Lesotho, Jamaica, and Namibia are also labeled as small states owing to their institutional capabilities (Thorhallsson, 2012). Traditional studies on small states identify size— measured through territory, population, economy, and military—as a source of small state syndrome. But, today, what the globalized world has come to understand is: size cannot be defined only with the help of quantitative data. Thorhallsson identified six types of size: (a.) fixed size

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(population and territory); (b.) sovereignty size (the ability of the country to maintain sovereignty over its territory); (c.) political size (state’s administrative, foreign policy, and military capabilities); (d.) economic size (state’s GDP and development status); (e.) perceptual size (perception of the political leaders, elites, and groups towards your own country and the outside perception towards your ability); and (f.) preference size (ideas and ambitions prioritized by the elites in the state) (Thorhallsson, 2006). Although Nepal is not a small state from the perspective of fixed size and population, Nepal has largely compromised in the other four indicators, which has aggravated its small state syndrome. Nepal’s failure to conduct a census on its north-western frontiers because of India’s military presence indicates Nepal’s smallness when it comes to sovereignty size. India’s desire to see an amendment of Nepal’s new constitution promulgated after 2015 was another episode. On its economic front, not only Nepal’s import and export is heavily dependent on India, but its currency is also pegged with India. Despite its economic dependency on India, Nepal’s power elites and political leaders have always perceived and prioritized Nepal as a strategic player because of its geostrategic location. Back in the 1970s, King Birendra strategized Nepal’s geography is such a manner that he envisioned Nepal as a gateway between central and South Asia. After the royal palace massacre and Birendra’s death in 2001, his brother King Gyanendra mentioned about Nepal’s eagerness to be an economic transit between India and China after participating in the Afro-Asian summit in Jakarta in 2005. King Gyanendra’s utterance should be understood against the backdrop of his attempts to haul China as an observer state into the South Asian Association for Regional Cooperation (SAARC) in the Dhaka Summit in 2004. After the fall of monarchy and with the political change of 2006, Nepali leaders further strategized Nepal’s geography to cope with SinoIndian rivalry and China’s aggressive presence in South Asia. Upon the same realization, Nepal’s former Prime Minister Pushpa Kamal Dahal during his India visit in 2010 spoke about the trilateral partnership between Nepal, India, and China. Former Prime Minister Baburam Bhattarai, too, envisaged Nepal as a “vibrant bridge” between the two Asian giants. In the same line, another former Prime Minister of Nepal K. P. Sharma Oli took a step ahead, going beyond the speeches and statements made by his predecessors and signed trade and transportation agreement with China, as an effort to diversify Nepal’s trade in the wake of Indian blockade on Nepal in 2016. But, to maintain a balance with India, Oli

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also inaugurated Nepal-India cross-border petroleum pipeline in 2018, which was the first of its kind in South Asia. Thus, Nepali leaders have always strategized Nepal’s geography in relation to its immediate neighbors, which is also visible in their perceptions and preferences (Photo 6.1). Although the principle of “sovereign equality” negates the dichotomy of big and small states, and perceives all the countries as equal in regard to their sovereignty, such perception appears too idealistic and improbable against the imposing interests, security concerns, and increasing influence of the regional powers. Today, while Nepal’s both neighbors are aspired to secure a global power status by increasing their military and economic

Photo 6.1 Heavy dust piles up on the road leading to the Birgunj border point in Nepal-India borderlands. Roads from Raxaul on the Indian side to Birgunj on the Nepali side haven’t been repaired and are in the dilapidated state since it was dug while constructing the cross-border petroleum pipeline. The sorry state of the major import route for Nepal often leads to traffic congestions in the Nepal-India borderlands (Photo Courtesy: Abhishek Jha)

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power, and are contesting against each other, decision-makers in Kathmandu, Dhaka, and Colombo have been obliged to pay a close attention to the strategic interests of both the countries, at times, even compromising their own interest. It is considerably the major source of Nepal’s small state syndrome and to minimize its propagation, Cold War survival strategies alone won’t be propitious and convenient. Today, Beijing has incessantly lobbied with the leaderships in the South Asian countries to expand its influence in the region through trade, aid, and investments. The recent one was being the launching of ChinaSouth Asian Countries Poverty Alleviation and Cooperative Development Center in July 2021. Against the increasing Chinese presence, India has been struggling by striving to foil the attempts made by small countries towards China. Any failure to address the concerns and interests of Beijing and New Delhi often results into retribution. For instance, in 2015 when Kathmandu discarded India’s dictation over Nepal’s sovereign right to promulgate its constitution, the landlocked country was penalized with a harsh blockade. In the same manner, when Ulaanbaatar welcomed Dalai Lama, Beijing had closed its border with Mongolia, resulting into an economic blockade in 2016. On that account, it can be said, the Sino-Indian geopolitical rivalry has impacted the autonomy and freedom of the small countries located in the neighborhood of two Asian giants. Along with the geopolitical vulnerabilities, which Nepal is fated to endure, Kathmandu’s small state syndrome is further exacerbated by the unending political transition in Nepal, whose impact is discernable in Nepal’s neighborhood policy. Taking resort in China’s rising influence globally to countervail Indian influence in Nepal may garner public support back home, as Nepali Prime Minister Oli did in the wake of Indian blockade, but it also reveals “Nepal’s asymmetric dependence on the contending regional powers for its survival” (Bhattarai, 2017). In today’s multi-polar world, India and China have acquired global leadership role. But, their geopolitical contestations on the issue of Himalayan borders, Indian Ocean, regional leadership, trade and investment have not only menaced the prospect of the much-hyped Asian Century but have also restricted the foreign policy maneuvering of the small countries. Securitization of their foreign policies in fulfilling their strategic objectives has exposed how their rise without responsibility towards the small countries has made their neighbors appear weak and vulnerable (Bhattarai, 2017). Today, while Chinese strategists have been publicly claiming that Nepal’s geographical location offers China a strategic advantage (Tao,

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2017), how would power elites in Kathmandu justify Nepal’s foreign policy objective of prohibiting the use of Nepali land against any other countries. Why Nepali decision-makers haven’t been able to probe such claims from North? (Bhattarai, 2017) Is it only because Nepal considers China as a balancer to Indian influence in Nepal? The dichotomy between the small and big has become more pronounced with the bureaucratization of India’s foreign policy (the perpetual influence of Indian bureaucrats in foreign policymaking and foreign policy implementation) towards the small countries in the region and politicization of the foreign policy priorities in the small states while dealing with the contending powers in the context of Sino-US strategic competition and India-China geopolitical rivalry. Although both the strategic interests of the big powers and the vulnerabilities of the small counties can be possibly managed through strategic partnership or by devising appropriate institutions, they cannot be easily materialized because of the two reasons: Firstly, the proposal floated by small countries won’t be easily accepted by the two contending powers and its rejection will not only further discourage the small states, but may also push them in resuming their conventional survival strategies. For instance, the proposal of Trilateralism that Nepal floated to cope with the rise of China didn’t persuade New Delhi. Secondly, the proposal introduced by one contending power may not be acceptable to the others. For example, China’s proposal of “Two Plus One” was instantly rejected by India although it proposed to eliminate all kinds of distrust and competition between them by jointly engaging with the third country. Furthermore, Maurice East’s analysis on small state behavior would be of help to assess Nepal’s small state syndrome. According to East, a small state behavior is largely characterized by the lack of effective participation in global affairs; wider level of engagement in intergovernmental organizations; high level of support for international legal norms; escaping the use of force as a technique of statecraft; abstention of the behavior and policies which may alienate powerful states; a narrow range of functional and geographic concern in foreign policy activities; and frequent employment of moral and normative positions on the issues of global importance. As Nepal cannot afford to enter into any strategic alliance or strategic partnership, its activities are more confined to international organizations. Nepal’s participation in world affairs is limited to routine engagement in the UN and other Bretton Wood institutions. So far, Nepal has got to serve in the UN Security Council only twice after being elected

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as non-permanent member in 1969–1970 and 1988–1989. At present, Nepal is the second-largest troop contributor to the UN peacekeeping missions. But today’s Nepal is different from imperial Nepal in the seventeenth and eighteenth centuries, when the Himalayan country used to take resort in expansionist policy as a technique of statecraft. In addition, the presence of two nuclear-armed neighbors has largely precluded Nepal from using force. However, by maintaining friendly relations with major powers and superpowers and accommodating their interests variously, Nepal has always attempted not to alienate itself from engaging powerful states. Even when Nepal had adopted an isolationist policy, at least until the political change of 1950, Kathmandu was able to establish diplomatic relations with Great Britain in 1816. Even before establishing diplomatic relations with its southern neighbor India, Kathmandu had already established its diplomatic ties with the US in 1949. Today, Nepal firmly supports the “One China” policy in the line of accommodating the interest of major powers. Despite its friendly relations with great and major powers, because of geographical and structural constraints, Nepal’s foreign policy behavior is more limited to a narrow functional and geographic range of concern. Although Nepal has adopted survival strategies to deal with the gigantic neighborhood, Kathmandu takes no less time in exploiting moral and normative positions on international issues, however. For instance, Nepal even ventured to vote against US’s move to declare Jerusalem as Israel’s capital at the United Nations in 2017. Nepal’s adherence to the UN Charter, world peace, international law, and Panchasheela is normative. Maurice East’s indicators imply how small countries like Nepal still have scope for maneuverability although they face irresistible odds in the international system. However, it depends not only on their accepted national power capabilities, but more on their ability to recognize and seize the opportunities (Khatri, 1997). Still, whether Nepal’s claim to neutrality, within the limits of Sino-US strategic competition globally and against the backdrop of Sino-Indian rivalry regionally, would be of any service in seizing such opportunities?

Small Is Beautiful Power elites in Nepal often surmise that big neighbors’ size, influence, and economy have made Nepal appear small in regional and international affairs. More than the Gulliverian neighborhood, Nepal’s Lilliputian dilemma—a key source of its small state syndrome—is rather driven by its

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denial that small can also be influential, appealing, and leading. Success stories of small countries (irrespective of their size, population, location) have attested that it’s more about the policies, strategies, and institutions that a state develops than the size of a country. Thus, it’s best to appraise them before we fleetingly and hastily endorse what’s small and what’s not. Equally important to understand that small countries “not only have better or worse choices in different international systems but also can take advantage of their opportunities in a better or worse fashion” (Rothstein, 1977). In the age of globalization, success stories of the small countries with high income have already proved that there is a negative correlation between GDP per capita and a country’s size. Similarly, when we consider healthcare and education, small countries have performed far better. Taking UN’s Human Development Index as a marker that combines GNI capita with health metrics and education, the world’s leading 30 nations are small countries. As openness to trade is another factor that determines the success of a country, small states have always been more open to international trade than big countries. Therefore, small countries embracing increased specialization have been more successful in the competitive economy. But, their exposure to volatility cannot be denied. There is a noticeable difference between “old” small countries (which have survived in the world for centuries with the same size) and “new” small countries (which emerged after the fall of empires or decolonization) at the social, economic, and institutional fronts. Because, in some of the new countries, the institutional and legal framework is yet to evolve, which definitely impacts the output. Governance, rule of law, education, different human development variables, along the institutional ability to manage globalization, play an important role in the success of small states. In the Nepali context, the sense of smallness stems from assorted factors. First, the geopolitical travail in managing the irreconcilable and antagonistic interests of India and China has unmasked Nepal’s smallness. Second, Nepal’s economic dependence on India for trade and transit has generated a sense of smallness among Nepalis. Third, enduring remittance-driven economy has heightened that smallness. Fourth, protracted political transition has further aggravated Nepal’s small state syndrome. Therefore, until Nepal is able to manage the geopolitical, economic, and political challenges, it mayn’t be able to conceive and celebrate the bigness of being small. Rise of China hasn’t only strategized Nepal’s geography but has also multiplied Nepal’s geopolitical challenges. While Nepal’s policy

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of neutrality remains more obscure, mystifying and opaque, and nonalignment is incapacitated to evade the Cold War inheritance, Nepal is haunted by a limited foreign policy option. Although the mantra of “amity with all and enmity with none” is receiving larger popularity among the policy circles in Kathmandu these days, limiting it to the discourse and papers is one thing, while implementing them successfully is another thing. After the parliamentary approval of the US-sponsored 500million MCC project on February 27, 2022, Nepal has welcomed a greater US engagement in Nepal. In addition to the money obtained under the MCC compact, the US has recently announced a grant of $659 million to Nepal under the United States Agency for International Development (USAID) framework. The grant was offered when Nepal joined the US in condemning Russia’s military invasion of Ukraine. While Nepal’s two neighbors have rejected to condemn Russian aggression, US’s interest, today, lies in ensuring Nepal doesn’t slide towards its neighbors vis-à-vis Ukraine. Some communist leaders and fringe parties are still against the MCC compact as they see the American project as a ploy to contain the rise of China. Here, it is also important to understand how Nepal managed to develop its relations with China after 2015 in the wake of the Indian blockade on Nepal. Actually, Nepal had realized its smallness grievously during the blockade, when landlocked Nepal was left to live with a humanitarian crisis because of the artificial shortage of goods and services. Nepal’s act of balancing characterised by dereliction is a major hurdle in advantageously handling the policy of “amity with all and enmity with none”. Because of Nepal’s open borders and socio-cultural linkages with India, New Delhi has always wished to see the continuity of the policy that places bilateral relations with India as “special,” which Kathmandu, however, perceives as a ceaseless source of Indian influence in the Nepali political spectrum. Although China has counseled Nepal to maintain good relations with India, Nepal has always desired to crawl towards the North to escape the heat coming from the south. Kathmandu-based power elites promptly puruse such strategies to shield their government or regime, and in doing so, Nepal has failed to articulate its short-term, medium, and long-term foreign policy objectives and strategies (Baral, 2019). Although Nepal has been affirming that it cannot afford to join any security alliances, Nepal wasn’t raising any objection to be included in the US-led Indo-Pacific Strategy until it drew criticism. Following the denunciation, former Prime Minister Pushpa Kamal Dahal had to reassure the Chinese Foreign Minister in the September

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of 2019 that Nepal won’t join any alliance intending to contain China. When China made Dahal’s assurances public, the US Embassy in Kathmandu sought clarification stating “it is bewildering that we now learn about Nepal’s positions from statements issued from Beijing.” It takes the lid off the infantilism and naivety in Nepal’s foreign policy caused by ad-hocism and lack of an effective mechanism to implement the foreign policy goals. Foreign policy issues are brought to the fore merely for image projection and domestic political consumption. Issue-areas are rarely identified and fitted into the policy perspective. Although issues riveting Nepal-India relations, including floods, inundation, border issues, trade, and transit problems seek continued efforts for resolution, these issues are often exploited to fulfill the immediate interests in an opportunistic manner (Baral, 2021). Hence, as long as Nepal lacks a stable, clear, and unambiguous foreign policy based on well-articulated objectives and strategies, Nepal may not find “true happiness in the world dominated by protagonist powers” (Rose & Dial, 1969). Also because of Nepal’s increasing economic dependence on India, it is strenuous for Nepal to genuinely acquire the attributes of bigness in its smallness. Although Nepal attempted to diversify its trade and transit after 2015, Nepal’s dependence on India hasn’t decreased. According to the Department of Customs, from mid-July 2020 to mid-June 2021, Nepal’s largest trade deficit was with India amounting to NRs 796.39 billion. In that period, Nepal imported goods worth Rs. 886.59 billion from India, while exported goods worth only 90.19 billion (DoC, 2021). Being surrounded by India from all three sides, and more because of geographical convenience, Nepal finds it easier to import and export goods via India. Landlocked Nepal’s third-country trade is also done through Indian ports. Most of Nepal’s trade is done through Haldia port, which is 848 km away from Nepal’s dry port in Birgunj borders. But, Haldia port cannot adjust huge vessels and goods. Thus, Vishakhapatnam port, which is almost 1422 km from Birgunj borders, handles the goods to and from South East Asia, the US, and Europe. Nepal has also received permission from India to get access to Mundra port in Gujarat and Dharma port in Odisha. India is also a major destination for both skilled and unskilled laborers of Nepal. There are about 32,000 Nepali Gurkha soldiers serving in the Indian army while 1,22,000 pensioners (as per the data provided by the welfare branch inside the Embassy of India in Nepal) and their dependents have been receiving pay and pensions from the Indian government.

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Despite being the most open and trade-dependent economy in South Asia, Nepal hasn’t been able to harness the benefits in the manner to reduce its extreme dependence on India. First, it’s because of Nepal’s inability in producing competitive goods. Second, lack of branding and marketing of the produced goods. Third, India’s big market and its open policy replaced the erstwhile exports of developed countries to South Asia, and lured multinational companies into India. Fourth, India’s preferential treatment played a role to increase its share in Nepal’s trade. Fifth, Nepal’s failure to diversify not only its products and markets, but also risks, as extreme dependence on one country is risky. Sixth, growing agro-based goods from the Indian market has increased Nepal’s reliance on India. Seventh, because of Nepal’s pegged currency and stable exchange rate, goods imported from India are cheaper than goods imported from third countries, which ultimately spikes Nepal’s dependence on India. In the same manner, as landlocked Nepal depends on trade and transit for India, it relies on remittance for its economy, which has rubbed salt into the wound of Nepal’s smallness. Today, while Nepal is identified as one of the labor-sending countries in the world, Nepal government’s failure to create jobs and opportunities inside the country is disheartening. As semi-skilled, unskilled, and skilled young laborers from Nepal make their way to the labor destination countries in the Middle East, Malaysia, and South Korea, it has fatally impacted Nepal’s agriculture sector and industrialization process in an unprecedented manner amidst the shortage of laborers back home, which in turn has rocketed dependency on India even for the agro goods and daily essentials. Until the late seventies, the flow of remittance in Nepal was almost negligible. But, today, Nepal has become a remittance-dependent country. In 2018, according to the World Bank, Nepal became the 19th largest receiver of remittance around the world. Although remittance helped the Nepali economy to sustain during the period of insurgency and political conflict and proved advantageous to avert the crisis impelled by the balance of payment problem, the dependency on remittance could make the country’s economy less competitive in the international market and slower the economic growth. By increasing household expenditure on consumer goods, the flow of remittance may further accelerate economic dependency as there have been no serious attempts to mobilize remittance in productive sectors. A plunge in labor demand in the major labor destination countries may increase the threat of economic failure.

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Human insecurity is yet another dimension of Nepal’s labor migration that has relentlessly tainted Nepal’s image abroad as the number of Nepalis losing their lives during foreign employment has drastically surged up. In the year 2020–2021 alone, as per the data of the Foreign Employment Board, 1242 people lost their lives working abroad, which means three Nepali labor migrants lost their lives every day. From 2008 to 2019, about 7467 Nepalis died in the course of foreign employment (Nepal Labor Migration Report, 2020). It signals the lack of effective labor diplomacy from the side of sending country to ensure a secure and harmless working environment in the host countries. As a result, Nepal’s smallness is manifested variously: first, from its sheer ignorance to ensure the safe and dignified labor migration; second, by making the Nepali state terribly dependent on remittances; third, by failing to cut the share of remittance in Nepali economy by creating jobs and opportunities back home or by encouraging the policy of export competitiveness, trade diversification, increased specialization, among others. The protracted political transition in Nepal—the prime source of Nepal’s small state syndrome—failed to create jobs and opportunities for young minds. As a result, they have been lured by foreign labor employment. The long transition, which began with the political change of 2006 and loitered until the drafting of the new constitution in 2015, impacted Nepal’s political values, political culture, political institutions, foreign relations, development activities, economic growth, national security, human security, trade, and foreign aids in such an unprecedented manner that Nepal’s image was matchlessly sullied in the international community. While its immediate neighbors were making records in world affairs with their spectacular development, Nepal was appearing smaller in regional and international affairs. Its domestic politics was heavily influencing Nepal’s foreign relations. Throughout the transition, India enjoyed an unrivaled presence in Nepal’s political circle, which was also interpreted as India’s “micro-management” of Nepali politics (Sharma, 2019), and a cause of Nepal’s smallness. But, as soon as the power elites in Kathmandu avowed that the political transition was over with the drafting of the new constitution in 2015, Nepal sought to escape its smallness in the wake of the Indian blockade by crawling towards China in the name of adopting the policy of trade and transit diversification. It’s how India lost Nepal to China until the US bacame one of the major players following the parliamentary approval of US-sponsored MCC project in Nepal.

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Because of the political instability, political leaders and their parties remained divided on the issues of international affairs and matters of national importance. Consequently, internal and external challenges barred the possibilities to develop a national consensus on foreign policy issues and national security priorities, which further made Nepal appear small in international and regional affairs. However, when India welcomed Nepal’s new constitution with a blockade, almost all the political parties, except the Terai-based Madhesi parties, stood united. As New Delhi had played an important role in Nepal’s political transition, Nepal’s aversion to accommodate Indian interest in its new constitution angered India in taking such a coercive action against landlocked Nepal. Not consulting New Delhi about the new Madhesh province that didn’t include Morang, Jhapa, Sunsari, Kailali, and Kanchanpur had infuriated Nepal’s southern neighbor, who claimed to have brokered the 2006 peace process in Nepal by going against the interest of the US and China. Beijing had always perceived monarchy as a reliable partner to fulfill its Tibet policy. China had stood with the monarchy’s battle against Maoists in Nepal until its demise. Equally, the US was also not comfortable with mainstreaming the Maoists as they were on the terrorist list during the War on Terror Campaign. Only in 2012, the US had removed the Maoist party from its list of global terrorist groups. With the fall of the monarchy in Nepal, New Delhi’s “twin pillar” policy of engaging with both the forces: the constitutional monarchy and the multi-party system in Nepal came to an end. In doing so, India wanted to fulfill its twin goals: first, India wanted to show its own Maoist revolutionaries that the path through the ballot is better than the bullet. Second, to pull Nepal away from the tilt that the palace was taking towards the North. Although New Delhi succeeded in preventing the monarchy’s tilt towards the North with the fall of the royal regime in Nepal, it couldn’t succeed to intercept Nepali leftist parties slanting towards Beijing that commenced with Maoist’s supremo Prachanda’s maiden visit to China as the Prime Minister in 2008 by breaking the tradition of visiting India after becoming Nepal’s Prime Minister. In the post-insurgency period, Nepal’s equidistance policy underwent through a drastic challenge as it was understood differently by two different neighbors. India understood the policy as at the cost of Nepal’s special relations with India, while China perceived it as Kathmandu granting equal status to its two immediate neighbors. While India was already not feeling comfortable with the presence of the United

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Nations for monitoring Nepal’s peace process and had suggested UN presence with a limited mandate dreading the roles of external powers in its traditional sphere of influence, Prachanda’s China visit in 2008 sent a clear message to New Delhi that Maoists would give equal priority to China. Following his 2010 China visit to attend the Shanghai Expo, when Prachanda proposed “trilateral cooperation between Nepal-IndiaChina” policymakers in New Delhi understood his act of balancing under the pretext of equidistance policy. When another Maoist leader Baburam Bhattarai became Nepal’s Prime Minister in 2011, he also branded Nepal as a “vibrant bridge” between India and China under the influence of equidistance policy. Although India was not comfortable with China being tugged in Nepal-India bilateral ties, the confinement of Nepal’s foreign policy issues and priorities at the neighborhood still made New Delhi relaxed as external powers were less effective in neutralizing Indian influence in Nepal, and China hadn’t still made its forays in South Asia. But Kathmandu realized the challenge of equidistance policy only when Beijing started pressuring Nepal, in the context of the Bilateral Investment Promotion and Protection Agreement (BIPPA) signed between Nepal and India in 2011 during the premiership of Baburam Bhattarai, to sign a similar kind of agreement with China and provide same priority treatment as that of India. Nepal’s “One China” policy, too, faced challenges during the transitional period after Kathmandu witnessed a series of anti-China demonstrations from 2008 to 2013, and some of them also involved selfimmolation. In 2008, after Tibetans tried to interrupt the journey of the Summer Olympic torch to Mount Everest, China’s strategic concerns heightened. Nepal is important to China because of Nepal’s strategic location and the presence of a large number of Tibetan refugees in Nepal. Thus, China had a fear that Tibetan refugees may exploit political instability in Nepal to spread the anti-China sentiments. China’s reservation over ethnicity-based federalism in Nepal should be understood in the same line as Beijing feared that Sherpa autonomous province might encourage Tibetan nationalism against the Chinese interest in Nepal (Jha, 2012). While Nepal already had the domestic obligation to logically end the peace process and draft a new constitution by managing the political uncertainty, it was equally necessary to engage both the immediate neighbors by addressing their security concerns, amidst the geopolitical tensions and uncertainties. But, Nepal lacked the ability to unearth a political will coupled by prudent management, and scientific outlook to ebulliently

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explore bigness in the smallness imposed by the discursive politics of binary opposition. In today’s age of great power competition, strategically located small countries like Nepal definitely matter, which is already insinuated by the vicissitudes of the Sino-US competition in Nepal, especially through BRI and MCC. But, the political polarization in the Nepali political spectrum can take the form of a political stalemate anytime, as we witnessed from 2020 to 2021, and how such political impasse imperils Nepal’s neighborhood policy. Thus, in the context of the growing strategic proximity between the US and India, and deepening Chinese interest in Nepal, policymakers in Kathmandu should be vigilant and assiduous in not letting New Delhi and Beijing lose trust in Nepal by surmising that their security interests, strategic concerns, and sensitivities are not received with appropriate level of trust and care along with a sense of responsibility. Thus, it is crucial for Nepal to revitalize, rationalize and pragmatize its foreign policy issues, priorities, objectives, and behaviors, going beyond the ambivalent and inconsistent claim to neutrality. If both the neighbors consider Nepal as a burden, Nepali foreign policy will have no other option than to collapse.

References Allision, G. (2017). Destined for war, can America and China escape Thucydides trap? Scribe Publications. Baral, L. R. (2019, September 16). “Nepal’s foreign policy problem,” The Kathmandu Post. Baral, L. R. (2021, June 23). “Nepal’s Foreign Policy Failure,” The Kathmandu Post. Barston, R .P. (1987). Diplomacy and security: Dilemmas for small states. In M. Abdul Hafiz & Abdur Rob Khan (Eds.), Security of Small States (pp. 230– 151). University Press Limited. Bhattarai, G. (2017, March 27). No small concern. Republica. https://myrepu blica.nagariknetwork.com/news/no-small-concern/ Breiding, J. R. (2019). Too small to fail (p. 285). Harper Business. Department of Customs (DoC). (2021, June 24). Nepal’s monthly foreign trade statistics with India. Department of Customs, Ministry of Finance. Fox, A. B. (1959). The power of small states: Diplomacy in the world war II . University of Chicago Press. Fukuyama, F. (2011). The origins of political order: From Prehuman times to the French revolution. Profile Books.

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Jackson, R. L. (1983). The Non-aligned, the UN and the Superpowers. Praeger. Jansen, G. H. (1966). Afro-Asia and Non-alignment. Faber and Faber. Jha, P. (2012, October 5). Editorial: The message from the North. The Hindu. https://www.thehindu.com/opinion/op-ed/The-message-from-thenorth/article12548983.ece Kennedy, P. M. (1987). The rise and fall of the great powers: Economic change and military conflict from 1500 to 2000. Random House. Keohane, R. O. (1969). Lilliputians’ Dilemmas: Small States in International Politics [Review of Alliances and the Third World.; Alliances and American Foreign Policy.; Alliances and Small Powers.; The Inequality of States., by G. Liska, R. E. Osgood, R. L. Rothstein, & D. Vital]. International Organization, 23(2), 291–310. http://www.jstor.org/stable/2706027 Kershner, I. (2018). ‘Fact check: Is Israel a model when it comes to guns? ‘The Seattle Times. https://www.seattletimes.com/nation-world/fact-checkis-israel-a-model-when-it-comes-to-guns/ Khatri, S. (1997). Nepal in the international system. In Anand Aditya (Ed.) The political economy of small states. Nepal Foundation of Advanced Studies and Friedrich-Ebert-Stiftung. Knudsen, O. F. (2002). Small states, latent and extant: Towards a general perspective. Journal of International Relations and Development, 5(2), 182– 198. Koh, T. (2019). Foreword. In James Breiding, Too small to fail (p. x). Harper Business. Kohr, L. (2001). The breakdown of nations. Green Books. Kosary, D. (1987). Small states in the modern world. Acta Historica Academiae Scientiarum Hungaricae, 33(1), 77–80. Levy, J. S. (1983). War in the Modern Great Power System, 1495–1975. The University Press of Kentucky. Malla, K. (2010). Nepal–India–China learning and unlearning of diplomatic conduct. Think India Quarterly, 13(4), 212–220. Mearsheimer, J. (2001). The tragedy of great power politics. W.W. Norton & Company. Mills, J. (1858). The history of British India. Vol. 1, Book II, Chapter 1, fifth ed. (p. 107). Nepal Labor Migration Report. (2020). Ministry of labor employment and social security. Government of Nepal. Nepal–India Joint Statement. (1990). Joint statement issued during the visit of Nepal’s prime minister Krishna Prasad Bhattarai to India in 1990. Nye, J. S. (1990). The changing nature of world power. Political Science Quarterly, 105(2), 177. https://doi.org/10.2307/2151022 Nye, J. S. (2011). The future of power (p. 3). Public Affairs. Press Trust of India (PTI). (2014, November 17). Nepal played key role in Narendra Modi-Nawaz Sharif handshake.

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Regmi, M. C. (1999). Imperial Gurkha. Adroit Publishers. Rose, L. E., & Dial, R. (1969). Can a ministate find true happiness in a world dominated by protagonist powers?: The Nepal case. The annals of the American academy of political and social science, November 1969. Sage. Rose, L. E., & Scholz, J. T. (1980). Nepal profile of a Himalayan Kingdom (p. 123). Westview Press. Rothstein, R. L. (1968). Alliance and small powers. Columbia University Press. Rothstein, R. L. (1977). The weak in the world of the strong: The developing countries in the international system (p. 53). Columbia University Press. Sabine, G. H. (1920). The concept of the state as power. The Philosophical Review, 29, 301–318. Sharma, S. (2019). Nepal Nexus: An inside account of the maoist, the Durbar and New Delhi. Penguin Viking. Singer, D. J., Bremer, S., & Stuckey, J. (1972). Capability distribution, uncertainty, and major power war, 1820–1965. In B. M. Russett (Ed.), Peace, war, and numbers (pp. 19–48). Sage. Tao, Li. (2017). From yam to bridge. The Kathmandu Post. https://kathmandu post.com/opinion/2017/02/03/from-yam-to-bridge The Economist. (2018, July 28). Gateway to globe, briefing China’s belt and road initiatives. The Hague Journal of Diplomacy, 7 (2), 136. The Kathmandu Post. (2016, February 22). India ‘elder brother’ for Nepal not a ‘big brother’: Sushma Swaraj. https://kathmandupost.com/national/2016/ 02/22/india-elder-brother-for-nepal-not-a-big-brother-sushma-swaraj Thorhallsson, B. (2006). The size of states in the European Union: Theoretical and conceptual perspectives. Journal of European Integration, 28(1), 7–31. Thorhallsson, B. (2012). Small states in the UN security council: Means of influence? The Hague Journal of Diplomacy 7 , 135–160. Martinus Nijhoff Publishers. Tilly, C. (1975). The formation of National states in Western Europe. Princeton University Press. Vital, D. (1971). The analysis of small power politics. In August Schou & Arne O. Brundtland, (Eds.) Small states in international relations (p. 19). Almqvist and Wiksell. Wohlforth, W. C. (1993). The elusive balance: Power and perceptions during the cold war (pp. 4–10). Cornell University Press.

CHAPTER 7

Rise with Responsibilities

“We welcome you as a messenger of China’s great culture, you have brought to us in India the gift of spiritual sympathy which, centuries ago, united our ancient humanities,” said the first Asian Nobel Laureate Rabindranath Tagore while welcoming the Chinese painter Xu Beihong to Santiniketan (the Abode of Peace) in West Bengal in 1940. Although political realists, today, may consider the attainability of such a civilizational unity between India and China mere daydreaming, any attempts by the new generations in both the countries to understand India and China through the civilizational, historical, and cultural lens, particularly by projecting Himalayan sphere as a geo-civilizational paradigm, may be of help to complement each other’s rise, and steer a responsible future. But, series of territorial conflicts coalesced by their aspirations to be “big powers,” have not only pushed them into an unending cycle of the rise and fall of great powers, but have also made their small neighbors, (who were eying to draw benefits from the rise of India and China), suffer from the trust deficit. Twigging the rise of India and China, this concluding chapter argues how their foreign policies of securitization, against the backdrop of their “great power” ambitions, have barred Nepal from skillfully adhering to its claim to neutrality. Because, as this study suggests, their rise has been without responsibilities towards the small countries in their vicinity. Still, the cultural and civilizational philosophy that has steered the worldviews of the two countries since antiquity is not © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. Bhattarai, Nepal Between China and India, https://doi.org/10.1007/978-3-030-99974-2_7

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conflictual. The Indian ideal of “Vasudhaiva Kutumbakam”, which means “the entire world as a family” disperses the same message of universal peace as the Chinese ideal of “Shijie Datong,” which implies “the world as a family”. But, in today’s age, whilst borders have become the source of conflict than a natural site of cultural and civilizational contact, the rise of China and India, frightfully restricted to their acts of securitization through ad hoc policies, hasn’t been advantageous to the people residing in the small countries like Nepal. The leaders of the small countries are shrewdly acquainted with the act of balancing, usually characterised by imprudence, in the context of Sino-Indian rivalry, to prolong their stay in power at the cost of general people’s hopes and aspirations from the miraculous rise of India and China. Thus, if India and China are really willing to be the drivers of the Asian century in economic terms, they should first take their immediate neighbors into confidence, particularly through their accommodative neighborhood policies, which could convey a message to the international community that their interests in the neighborhood are primarily economic, and for the sake of regional development along with mutual benefit. As such, the security concerns of the small countries could also be circumspectly addressed. But, to truly achieve it, the neighborhood policies of the two nuclear powers are to be put into effect by adhering to the spirit of responsibility and accountability towards the neighborhood, and yield quid-pro-quo situations.

New Asian Drama When Karl Gunnar Myrdal’s Asian Drama: An Inquiry into the Poverty of Nations came out in the year 1968, only few could have thought that after 53 years, a new Asian Drama would unfold again in front of us: Sino-Indian rivalry. Because, back in the late 1960s, India was undergoing economic stagnation and China was struggling through cultural revolution. Today, however, both the countries, politically, have not only refashioned their predominant civilizations, but are also the rising economies; and most strikingly, they are perceived as great powers in their respective geographical regions (Lam & Lim, 2009). According to the World Economic Outlook, published by International Monetary Fund (IMF) in 2021, while the global economic recovery is continuing amidst the resurge of the pandemic and the world economy is projected to grow 4.9% in 2022 (which is 0.1% lower than in 2021), China’s economy is

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expected to grow 5.6%, while India is anticipated to expand 8.5% (IMF, 2021). India and China have the biggest military expenditure. According to Stockholm International Peace Research Institute (SIPRI) Fact Sheet published in April 2021, the top military spenders in 2020 were the US, China, India, Russia, and the United Kingdom, accounting for almost 62% of global military spending. As the third-largest military spender globally in 2020, India spent 72.8 billion dollars, China, standing in the second position spent 252 billion dollars as its military expenditure. The expenditure of the US stood at 778 billion dollars. In comparison to previous years, China’s military expenditure increased by 1.9% while India’s spending grew by 2.1% (SIPRI, 2021) (Table 7.1). India’s military expenditure in 2020 was 2.1% higher, than in 2019. But, looking at the trend of India’s military expenditure, 72.9 billion dollars implies the 34% surge up in its spending than in 2011. Such an increase should be understood in the context of India’s renewed border conflict with China in the Himalayan regions the strategic partnership between the US and India, and New Delhi’s increasing conflict with Islamabad over Kashmir. In the same manner, as the second-largest military spender globally in 2020, China has consecutively increased its spending since 1994 as the result of Beijing’s long-standing military modernization. In recent years, China’s military expenditure should be understood from the way new alliances and strategic partnerships are Table 7.1 Share of global military expenditure of top ten countries with spending in 2020 Sn

Top ten countries

Share in world military expenditure (%)

Military spending (billion dollars)

1 2 3 4 5 6 7 8 9 10

US China India Russia UK Saudi Arabia Germany France Japan South Korea

39 13 3.7 3.1 3.0 2.9 2.7 2.7 2.5 2.3

778 252 72.9 61.7 59.2 57.5 52.8 52.7 49.1 45.7

Source SIPRI Military Expenditure Database, 2021

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being built to contain the rise of China. While, India rallies with the US, Australia, and Japan to contain China, the strategic contestation between New Delhi and Beijing in the context of the Sino-US rivalry has dispersed certain repercussions on the neighboring countries located in their neighborhood (Menon, 2021). The nature and scope of SinoIndian interactions, today, not only determine the future of reciprocity, interdependence, and globalization, but also how they determine the future of the international relations in the twenty-first century as the rising powers (Wang, 2011). Changing dynamics of Sino-Indian relations are also expected to determine the U.S. power globally, and also in the Asian region (Haenle, 2021). Their ability to cooperate is projected as crucial on the core issues, ranging from climate change to pandemic and terrorism to multilateral trade negotiations (Biba, 2016). But, there are certain similarities and differences in the foreign policy behaviors of India and China, particularly in dealing with the small states in the South Asian region (Wagner, 2016). Such similarities and differences are the results of their threat perceptions towards each other, which surface and resurface in different contexts (Fang, 2014). In addition to the border disputes, Tibet issue, nuclear deterrence, regional cooperation and competition, SinoIndian interactions have faced renewed challenges from US-India strategic partnership, which has already discomposed Beijing (Gokhale, 2021). In the same manner, the “all-weather friendship” between Pakistan and China has outraged New Delhi (Rather, 2019). Furthermore, while China’s increasing presence in South Asia has augmented India’s threat perception, the objective of the Quadrilateral Dialogue (including the US, Australia, Japan, and India) to contain China’s rise has amplified the threat perception of Beijing. But China hasn’t responded in a “tit-for-tat” manner (Hu & Meng, 2020). At least until the 2020 Galwan valley face-off that exacerbated SinoIndian relations as of never before, their economic rise was ostensibly branded as the beacon of the Asian Century, not only because of the foreign policy crisis of the Trump administration and fissure in the European regionalism in the wake of Brexit, but more because of the train of interactions between the two civilizations, which was further expedited by the personal chemistry between the Indian Prime Minister Narendra Modi and Xi Jinping (Ogden, 2019). Their meetings in Wuhan to Chennai to settle their differences and boost trade and investment had generated a buoyant mood and transmitted a sanguine message in 2019 to the countries in South Asia. But, Machiavellian leaders of the

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small countries are characteristically familiar with the art of unsheathing benefits from three major ingredients of Sino-Indian interactions: SinoIndian conflict, Sino-Indian cooperation, and Sino-Indian competition. And Nepal’s case suits that better. During the time of conflict, as past experiences suggest, Kathmandu asks no excuses in pursuing the policy of strategic balancing as indicated by Nepal’s position during the 1962 border war (Thapaliyal, 1998), Doklam standoff (Anwar, 2020), and Galwan skirmishes (Bhattarai, 2020). While the relations between the two economic giants blatantly display the mood and motion of cooperation, Kathmandu aspires for multidimensional connectivity and promotes crossborder interactions with both the neighbors (KC and Bhattarai, 2018); and at the time of geopolitical contestation, Nepal lures aids and investments from both (Khadka, 1992). One may twig it as the power of geography in the new age of great power rivalry (Marshall, 2021) and the other may fathom it out as the prisoner of geography as Nepal’s location often shapes the decisions and choices that its leaders make (Marshall, 2015). Others may also deem it as Nepal’s survival strategy to cope with its Gulliverian neighborhood (Dahal & Dahal, 1993). With all these accounts, what becomes clear is that Nepal’s foreign policy agendas, issues, priorities, and strategies hinges on how China and India interact with each other. Nepal’s ambivalence regarding its claim to neutrality is an apt example. More than the dearth of policy debates and foreign policy research institutions on Nepal’s attempt to neutrality, the policy of securitization espoused by two nuclear giants towards the small countries in South Asia—either in the context of their border conflict or geopolitical competition—has made Nepal impetuously transmute its claim to neutrality towards hedging. Details about the way Nepal has squeezed the significance and relevance of non-alignment at the sub-systemic level is sufficient to understand the gravity Kathmandu’s foreign policy approach towards Sino-Indian interactions (Rose & Scholz, 1980). In the same manner, Nepal’s foreign policy diversification is also aimed at neutralizing the presence of India and China in Nepal. As every move that a relatively small country like Nepal makes is determined by the SinoIndian interactions, foreign policymakers in Kathmandu, Colombo, and Dhaka are often heard stating that a country’s rise in regional and international affairs should come with responsibilities and accountabilities, at least towards the region it belongs (Dixit, 2019). But those, who take no less time to imprudently and shrewdly exploit the benefits of Sino-Indian

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rivalry, are the power elites of the neighboring countries of the two Asian giants. Securitization is widely reckoned as the key reason for their rise without responsibilities. Currently, securitization of the Himalayas has heavily escorted the foreign policies of India and China. Even the presence of the world’s tallest mountain between them is not enough to slew their relations from being “frosty” (Marshall, 2015). Various standoffs and skirmishes on the high Himalayan frontiers in the different periods of time suggest the same. But, in the ancient period, the Himalayas were free from securitization as they were perceived more mystically. The supernatural importance of Himalayas is discussed in different religious texts including Mahabharat and Vedas . With the passage of time, along with pilgrimage to holy destinations, the Himalayas also became the site of exploration for explorers, missionaries, archeologists, and climbers (Douglas, 2020). The same idea is reflected in Rudyard Kipling’s 1898 poem “The Explorer”: Go and look behind the ranges. Something lost behind the ranges. Lost and waiting for you. Go!

With the advent of trans-Himalayan trade, different civilizations across the Himalayas got connected, which not only gave birth to socio-cultural diversities, but also with the accumulation of commerce and wealth through trade and transactions, newly formed states began perceiving the Himalayas as their natural defense. During the period of colonialism in South Asia, the Himalayas became the site of power struggle, expansionism, spying, and trade wars. In the post-colonial and globalized world that we are inhabiting today, which is supposed to be driven, at least in principle, by regional integration and cross-border multidimensional connectivity, the Himalayas are not free of great power politics. China’s Tibet policy, Indo-Pak perpetual tensions in Kashmir, Sino-Indian border standoffs in the Himalayan region are some of the examples, which have left the Himalayas securitized. From the days of the invasion of Tibet by China in 1950 to the 1962 Sino-Indian border war; or from the days of the merger of Sikkim into India in 1974 to 2017 Doklam crisis; or since the days of the Khampa struggle in the 1970s to the Galwan crisis of 2020, the two Asian giants have always competed for the domination of the Himalayan region. As such, their competition is steered

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by the policy of securitization, which has ultimately bourgeoned the levels of security threats faced by the small countries in their vicinity. Although the decision-makers in the small countries of South Asia are historically acquainted with the policy of balancing one against the other (Rana, 2013), strategically-placed country like Nepal is also keen to derive economic benefits from the picturesque development taking place in both the countries (KC & Bhattarai, 2018). But, the geopolitical contestation between the two nuclear powers has dreadfully impeded the hopes and aspirations of the small countries towards the materialization of the Asian century. The foreign policy behavior of the small countries, too, cannot be regarded as the responsible comportment, which is recklessly manifested in their imprudent balancing strategy. During the period of colonialism and Cold War, Nepal’s presumptuous balancing strategy was concentrated on surviving as a unified state. The annexation of Tibet by China and Sikkim by India taught Nepal the same lesson. But, today, its balancing strategy is employed rhetorically by the political leaders for prolonging their regimes or governments. What we need to understand here is, small states alone cannot accumulate such a strength to play one against the others, until they receive a certain level of external patronage from one of the contending powers. Because, in comparison to the ephemeral benefits received by the small countries, the two contenting powers happen to draw the economic, strategic, and geopolitical benefits at once, by tightening the control over the political spectrum of the small country, one after the another (Garver, 1991). More than the interests of the small countries, they are destined to accommodate the change in regional power balance. In the South Asian context, today, the regional power balance is chauffeured by the interaction between China and India. Today, when the stories of their rise have topped the headlines, policymakers in small countries are goaded by few pertaining questions: where are the other South Asian countries located in the rise of India and China? Are they given any space beyond the geopolitical chessboard? Will they have more or less strategic autonomy in the regional order driven by the SinoIndian interaction grounded on the elements of conflict, cooperation, and competition? While the new Asian drama is being enacted, an economic space too is not exempted from the sway of the geopolitical clutches. Sino-Indian competition over the Nepali market and resources implies the same (Dixit, 2010). Indian economy, which was contracted by 8.0% in 2020 grew

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by 12.5% in 2021, while the Chinese economy which expanded by 2.3% in 2020 grew by 8.4% in 2021 (IMF, 2021). Nepali economy—located between them—which was contracted by 1.9% in 2020 and grew by 2.9% in 2021 (IMF, 2021), feels excluded and miniatured in their rise. Because, both the Asian powerhouses have been blatantly engaged in containing each other’s rise that the economic concerns of small countries like Nepal are effortlessly relegated. Despite their common goal to achieve the great power status, both countries have different political systems, social structures, and economic models that have barricaded in resolving their territorial disputes, minimizing mutual threat perceptions, and curtailing economic competitions (Wang, 2011). As a result, secondary states like Nepal are important to them only to fulfill their strategic goals. As such, connectivity-driven development strategy for Nepal (Rana & Karmacharya, 2014) faces varied geopolitical challenges. Because of Nepal’s strategic location, their security concerns top the list of their interests in the strategically-located country (Jha, 2020). Foreign direct investment, aids, and assistance are merely the instruments to fulfill their strategic and security interests in Nepal (Khadka, 1997). Today, conspicuous decrease of Indian investment, aid, and assistance in Nepal indicates New Delhi’s tolerance and acceptance of China’s increasing presence in Nepal. The annual Indian grant to Nepal for the fiscal year 2022/2023 is 24% less than what was allocated for 2021/2022 (Republica, 2021). In 2021, New Delhi provided a grant of Rs. 15.87 billion to Nepal while for this year, it stands at Rs. 12 billion. Still, it is the second-highest among all the South Asian countries. Bhutan has received the largest amount of 22.6 billion (Republica, 2021). Although Indian companies are operational in Nepal since Kathmandu adopted neo-liberal economic policies and multiparty democracy in 1990, there has been a perceptible decrease in Indian private firms investing in big projects. When Nepal sees India growing in Delhi, Calcutta, Mumbai, Bangalore, but not in the bordering areas attached with Nepal, Kathmandu is left to excogitate and wonder about the significance of open and porous borderlands between the two countries, in India’s rise. Similarly, China is growing in Shanghai, Beijing, Guangzhou, but not in the bordering regions attached to Nepal. In 2019, although Chinese President Xi Jinping pledged to metamorphose landlocked Nepal into a land-linked country, it cannot be materialized amidst the deficiency of requisite connectivity infrastructure in the borderlands (Fig. 7.1). Although connecting Chinese railways to Kathmandu is still a distant

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Fig. 7.1 In the 2017 picture stands the gateway to China from Kerung borders, which is geographically hostile to conduct normal trade between the two countries (Photo Courtesy: Aayus Timilsina)

dream owing to the geopolitical, economic, and geo-engineering challenges, both the countries, Nepal and China have been using it as geopolitical rhetoric to minimize Indian influence in Nepal. Thus, in the new Asian drama, economic and developmental activities have become a geopolitical tool, where small countries like Nepal also get an occasion to hedge by pursuing contradictory policy choices in the name of neutrality. Because, Kathmandu is acquainted with the manner of extracting benefits, not only by maintaining good relations with the both, but owing to its geographical location, more by being heedful of not alienating any one of them. Thus, in the new Asian drama, the problem impeding the growth and stability of Asia lies not in the population as Gunnar Myrdal claimed in the late 1960s, it is more about geography and the way power elites strategize geographical location to fulfill their strategic interest. The

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neighborhood policies of India and China towards the South Asian countries, including Nepal, are also aimed at the fulfillment of their security goals by strategizing their geography as “Chakravartin” (as in India’s case) or through “Belt and Road Initiative” (as in China’s case).

India’s Neighborhood First Policy When Indian Prime Minister Narendra Modi inaugurated his “neighborhood first” policy by inviting the heads of the South Asian Association for Regional Cooperation (SAARC) nations, during his first swearing-in as Prime Minister in 2014, SAARC countries had a common expectation from India, i.e., an accommodative approach. In his first tenure, Prime Minister Modi largely failed to accommodate the admissible interests of the neighboring states citing the increased presence of China in the South Asian countries through aids and investments. Thus, most of his efforts remained focused on the objective of thwarting the evident engagement of India’s South Asian neighbors with China. While dealing with China’s unprecedented entry in the region, the foreign policy behaviors of India’s South Asian neighbors keeps on tormenting his second tenure, which he began in 2019. Modi’s “ideological mooring,” his “domestic political calculation,” and the “aggressive nature of his government,” which drove his regional policy during the first tenure has undergone a dramatic change (Jacob, 2021). During his second term, his swearing-in was attended mostly by Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) leaders in 2019, which swiftly sent the message of India’s priority on BIMSTEC over SAARC. Modi, however, sought refuge in SAARC—when COVID-19 afflicted the entire world in 2020—by initiating a video conference with SAARC leaders while the regional entity was almost in a coma following the IndoPak conflict in 2016. But, the SAARC-level mechanism for containing the spread of COVID-19 couldn’t be established because of the dispute over the management of SAARC COVID-19 emergency funds between India and Pakistan. Thus, India’s neighborhood policy under Modi is evolving more as an escapist approach as New Delhi is looking for relief and distraction from unpleasant geopolitical realities triggered by the rise of China and its nexus with India’s archrival Pakistan. In such an unfavorable situation, when India’s South Asian neighbors are also lured by China’s Belt and Road Initiatives, New Delhi finds refuge in its “Act East Policy” and BIMSTEC to strengthen ties with eastern neighbors with an

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intended objective to bridge South and South East Asia (Rao, 2020). As a result, the expectations and aspirations, particularly of the small South Asian countries from SAARC, have been austerely shattered. In 2014, Modi proactively and pragmatically commenced his neighborhood policy by engaging with the neighboring countries in a multifarious manner (Sahoo, 2016). As the Prime Minister of India, Modi’s first state visit was to neighboring Bhutan, where he pledged of providing assistance to hydropower projects that were underway in Bhutan. His next visit was to Nepal. Prior to Modi’s visit, Kathmandu hadn’t seen the visit of Indian Prime Minister for almost two decades. The visit of Indian Prime Minister Modi filled that vacuum. In Dhaka, he signed a land-swap deal. In Colombo, while the Rajapaksa government was developing closer ties with China, Modi strategically mended the damage by ousting Rajapaksa with the help of Maithripala Sirisena as the new Sri Lankan President (Gokhale, 2015). These episodes suggested how Modi’s “neighborhood first” approach followed a “proactive foreign policy,” (Sahoo, 2016) by not only responding to the series of affairs in the South Asian region, but also determining and fashioning them. PM Modi sculpted them by fostering personal ties with the leaders of the host countries during the high-level visits. In 2015 alone, out of his 37 trips, 24 trips were to the Asian countries. Most of his visits were aimed at materializing the strategic and economic cooperation in the areas of mutual interest (Pal, 2016). Initially, Modi’s neighborhood first policy evinced economic and developmental promises, but on no occasion a proper mechanism was put in place to adequately respond to the political and security concerns of the region (Chowdhury, 2016). Lack of timely response from New Delhi, particularly on the issue of sovereignty and territorial integrity often offers space to the opportunist and power-centric leaders of the small countries, not only to renew their ties with Beijing, but also to induct demagogic form of nationalism among their supporters, as a tactical bid to increase their vote banks back home by exploiting anti-India sentiments. Nepal is a classic example, where one’s anti-Indian attitude is also perceived as a nationalist posture (Rae, 2021). Because of India’s unofficial blockade on Nepal in 2015, which had tarnished India’s image in Nepal in an unprecedented manner, governments and political parties in Nepal managed to exploit the recurring anti-Indian sentiments as the political stunt to prolong their stay in power and to win the elections respectively (Fig. 7.2).

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Fig. 7.2 Anti-Indian graffiti in Nepali vernacular language on the public toilet of Devghat, a pilgrimage destination for Hindus in Nepal and India. Unlike the placards targeted against the Indian state and the Indian embassy, which is not a rare sight in Kathmandu, this graffiti is targeted to a well-known Nepal expert from India, who has always been vocal on Nepal-India relations (From Author’s Archive)

In principle, India’s neighborhood policy fundamentally demands a peaceful, unwavering, and affluent neighborhood (Singh, 2016). But, accomplishing the same goal hasn’t been an easy task because of the increasing trust deficit and threat perception that South Asian countries have harbored against India and vice-versa (Raza & Khan, 2017). New Delhi’s threat perception is driven by the menacing possibility of small South Asian neighbors ganging up against India in the context of China’s increasing presence in the region. India’s South Asian neighbors, however, perceive Indian influence in the region as the way to hegemony, interventionist policies, and micro-management of political affairs in small countries, to fulfill its national security goals and at the end of the day, secure its desire to become a global power (Sahoo, 2016). Justifying Indian hegemony in the region owing to its size and geography is not a

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fresh endeavor, however. For instance, in 1984 Indian political scientist Sen Gupta even went on stating that “The Indian elephant cannot transform itself into a mouse. If South Asia is to get itself out of the crippling binds of conflicts and cleavages, other countries will have to accept the bigness of India. And India, will have to prove to others that big can indeed be beautiful” (Gupta, 1984). Although one of the keystones of India’s foreign policy has been to build a strategically secure, politically stable, and economically cooperative neighborhood (Muni, 1993, 2003), New Delhi’s discernible reluctance to embrace the doctrine of sovereign equality and positioning mutual respect towards the South Asian countries has reinvented its perceived image of a “hegemon.” While New Delhi has always securitized its neighborhood since its independence (Malone, 2011), India’s desire to have greater cooperation with its neighbors has always been mediocre and practically dismal. Uncertainty over SAARC is an apt example cajoling small neighboring countries to consider the attitude of India as that of hegemonic power, not a responsible power in the South Asian region (Bhasin, 2008). Although Beijing has appeared as a potential rival to New Delhi in regards to finance, trade, investment, aid, and assistance, both the nuclear powers haven’t been productively and irreproachably able to fulfill the economic and developmental needs of the small countries in South Asia. When the aids and assistance come with strategic strings attached, decision-makers of the secondary states do start to reinvent the newer ways of balancing and hedging. They are the upshot of the lack of interest in the leadership of both the countries, India and China, to convincingly distinguish their strategic ambitions pursued in the context of emerging as potential global power against the economic aspirations of the small countries in the context of the increasing number of middle class population and formation of new markets in India and China. Quite often, the two contending powers aim to fulfill their strategic and security interests by influencing and pressurizing the policy circles of the South Asian countries at the cost of the economic aspirations of the denizens of South Asia willing to draw benefits from the rise of India and China irrespective of state-centric accounts and power-centric chronicles. As New Delhi aspires to establish itself as a major power, taking its neighborhood into confidence is a prerequisite. But, as a ploy to refurbish its strategies, New Delhi has cherished a phony conviction that without achieving a persistent predominance in one’s own neighborhood, no nation can become a conventional power at the global level

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(Mohan, 2007). Thus, to fulfill the objective of attaining a major power status, India has embarked on managing its own backyard (Muni & Mohan, 2004), which has prevented its South Asian neighbors to relish the fruits of India’s economic rise. For instance, while the 2019 elections were underway in India, the level of anxiety was apparently higher in the leadership of the small neighboring states. Because they have always looked for a comfortable leadership in New Delhi that allows them to contribute to “peace dividend, growth and camaraderie in the region” (Dixit, 2019). While Prime Minister Modi’s party was reported to have used the tactics of militarized nationalism projecting Pakistan as the exclusive enemy, analysts in Dhaka were amazed by India’s unremitting patronage of one-party rule in Bangladesh. Similarly, Sri Lanka was engulfed in the geopolitical conflict between India and China, particularly over the Chinese-backed Hambantota port. And Kathmandu was waiting for New Delhi to admit that the increasing Chinese access to Nepali political parties was the outcome of the Indian blockade on Nepal in 2015 (Dixit, 2019). India’s neighborhood policy in Nepal may appear inconsistent in form but its objective has remained the same, i.e., securitization. It commenced with Nehru’s “Himalayan Frontier,” at the beginning of the Cold War, but the policy of securitization still finds an apposite place in the Indian foreign policymaking and foreign policy behavior, in the wake of the rise of China and increasing Chinese presence in the Himalayas. After Nehru, although Indira Gandhi remained focused on political realism with unNehruvian policies, her son Rajiv Gandhi went on employing coercive action through “economic blockade” on Nepal in 1989. After the end of the Cold War, and particularly after the restoration of multiparty democracy in Nepal in 1990, New Delhi adopted the “Twin Pillar,” policy (engaging with the constitutional monarchy and democratic parties) until the fall of the monarchy in Nepal in 2008. India had embraced Gujal Doctrine (named after the Foreign Minister I. K. Gurjal) after Rajiv Gandhi’s government lost elections in 1989. The new government took no less time to condemn Gandhi’s policies for “alienating Nepal” and pursued an accommodative policy towards the South Asian neighbors (Muni, 2009). Narendra Modi’s initial engagements with the Himalayan country were perceived by Kathmanduites as the continuity of the same accommodative policy. But, with the 2015 blockade on Nepal, Modi’s policies were interpreted as neo-Kautiliyan and were compared to that of Rajiv Gandhi. Because, India’s foreign policy towards Nepal has been extensively driven

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by New Delhi’s security priorities, strategic concerns and those forms of national interests, which New Delhi had started to emphasize by pursuing democratic goals in the neighborhood and democratizing the dictatorial and authoritarian regimes (Muni, 2009).

Himalayan Defense: Continuity and Change Himalayas has occupied a central place in India’s foreign policy (Feer, 1953; Mishra, 2020). Policymakers in New Delhi, since the days of Nehru, the architect of India’s foreign policy, have perceived Himalayas as the source of India’s defense. As such, the frontier policy has prevailed in different forms. The sole objective of the policy is to keep the neighborhood free from external influence, particularly, the increasing Chinese presence (Mishra, 2020). In doing so, New Delhi has securitized its relations with the Himalayan countries in South Asia, including Nepal and Bhutan. While such securitization dismisses an accommodative approach towards the neighbors, they won’t be readily able to derive required benefits even by adopting neo-liberal policies or acquiring the membership of regional organizations, including SAARC and BIMSTEC. While they cannot stay reluctant in eying warily at the probable benefits offered by the rise of China and India, they also cannot afford to choose one over the other. But the extent of such a geopolitical dilemma is either shrewdly exploited by the leaders of the small states along with their act of balancing or by the decision-makers of the two Asian giants, particularly in their attempts to lure the secondary states towards them. The policy of securitization—either through the Himalayan frontier or other forms of political realism—has sketched the image of rising India, more as a threat to its South Asian neighbors than an opportunity, which remains a serious challenge to India’s foreign policy (Saran, 2005). As one of the fastest-growing economies of the world, India should be in a position to inspire its South Asian neighbors. New Delhi must be able to present India as a key economic partner pursuing mutually rewarding economic and commercial links for the shared prosperity in the region. Instead of making its neighborhood feel besieged by India with latter’s act of securitization, its best to build a web of “dense interdependencies” (Menon, 2006) with its neighbors. Despite the presence of such a realization among the Indian foreign policy formulators, what prevents New Delhi from developing a neighborhood policy that is “capable of adjusting, capable of shaping events and be able to assess when a neighbor

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is in the midst of a transformational process” (Menon, 2006). Although India initiated a policy to establish connectivity with its neighbors for materializing the “web of interdependencies,” New Delhi is strategically not in a position to amenably let its South Asian neighbors get lured to China and its connectivity projects. For instance, the Himalayan frontier doesn’t allow the policymakers in New Delhi to take steps towards accommodating the increasing relationship between Nepal and China as a “transformational process.” In the same line of securitization stimulated by the frontier theory, New Delhi cannot allow Bhutan to develop its relations with China. In 2012, when Bhutanese Prime Minister Jigme Thinley and Chinese premier Wen Jiabao, without informing India, met on the sidelines of the Rio+ 20 Conference in Brazil, to discuss the possibility of developing full diplomatic relations, New Delhi responded by withdrawing India’s petroleum subsidies to the Himalayan Kingdom, as an attempt to influence the election results of 2012 (Bhattarai, 2017a). Nepali foreign policy experts spotted the resurgence of Himalayan frontier theory in the recent construction of India’s Mansarovar route to Tibet by New Delhi via what Nepal claims as its territory and without the latter’s consent. The story goes back to the year 2019 when India published its new map allegedly incorporating Nepali territory. At that time, although Kathmandu sought a diplomatic resolution, New Delhi paid no attention to Nepal’s diplomatic note. Rather, New Delhi went on constructing and inaugurating the road through the disputed territory. When Nepal objected to India’s move, Indian army chief Naravane outrightly stated that Nepal was acting at “the behest of someone else,” an indirect reference to China. He said, “In fact, the Nepalese Ambassador has mentioned that the area east of the Kali river belongs to them. There is no dispute in that whatsoever. The road which we made is in fact to the west of the river. So, I don’t know what they are agitating about” (Naravane, 2020). Naravane’s remarks received criticism not only in Nepal but also in India (Singh, 2020). Nepali security experts and foreign policy analysts reiterated that it would be obnoxious to perceive Nepal’s protest against India’s Mansarovar route as an act at the behest of China (Bhattarai, 2021). While China-led connectivity projects are looking for ways to pierce the Himalayas, India sought to take refuge in the Himalayan frontier by constructing the Indian road linking Uttarakhand’s Pithoragarh with Kailash Mansarovar via Lipulekh. Although the route is trademarked as a pilgrimage route by New Delhi (Peri, 2020), India’s strategic interest in the Himalayas was visible by the way the Indian

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Defense Minister Rajnath Singh inaugurated the road (not the Ministry of Road Transport and Highways of India) while both countries were under strict lockdown to contain the spread of COVID-19 pandemic and any pilgrimage was not possible in the near foreseeable future.

Bureaucratization of Policies Political leaders in India’s neighboring countries in South Asia have generally understood that New Delhi’s policy towards the small countries in the region doesn’t change substantially with the change of guard (Adhikari, 2014a). Such inferences suggest the role of Indian bureaucracy in foreign policy issues, priorities, objectives, and behavior towards the neighboring countries (Benner, 1985). As a result, foreign policy bureaucracy in India is reckoned as a permanent government which can scarcely be replaced, and has a decisive role in India’s foreign policy towards its South Asian neighbors. Even the former U.S. President Barrack Obama realized how unyielding nature of Indian bureaucracy has impeded India’s economic progress. “Despite its genuine economic progress, India remained hamstrung by a parochial bureaucracy that was resistant to change” (Obama, 2020). Foreign policy is characterized not only by policy continuity but also by change. But, Indian bureaucracy has often been resistant to such changes, particularly when it comes to New Delhi’s foreign policy behavior towards South Asia. When I. K. Gujral was the Foreign Minister of India from 1996 to 1997 and Prime Minister from 1997 to 1998, he attempted to redefine India’s relation with its neighbors. But his accommodative stance was fiercely resisted by Indian bureaucracy (Mohan, 2009) resulting in the discontinuity of the Gujral Doctrine. For winning the policy battles, the Indian bureaucracy has even gone to the extent of leaking the information to the media so that it could shape the public opinion in its favor (Mohan, 2009). As a result, political leaders are left to compromise their accommodative posture and policies. The potent force in the making of India’s foreign policy—Indian bureaucracy—hasn’t been able to adapt to the new changes and aspirations in the neighborhood. Because, Indian bureaucratic elites are reportedly not free of the colonial psyche that doesn’t allow Nepal to diversify its relations with the outside world, rather wants Kathmandu to “perennially stick” to the special relations with India (Baral, 2021). Deciphering the writings by the Indian ambassadors posted to Nepal in

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different periods of time, including MK Rasgotra, Deb Mukherjee, K V Rajan, Shyam Sharan, Rakesh Sood, Manjeev Singh Puri, Ranjit Rae, and among others, it is understandable that while handling day-to-day events, Indian bureaucrats have also expanded their leverage into policymaking and policy implementation, particularly in the context of India’s border states influencing India’s neighborhood policy owing to the crossborder cultural connections, and linguistic affinities. Like Tamil Nadu, the southern Indian state sharing a maritime border with Sri Lanka appears in India-Sri Lanka relations; like West Bengal, one of the populous states of India pops up in India-Bangladesh bilateral relations; Nepal, sharing its land borders with Uttar Pradesh (UP), Bihar, Sikkim, West Bengal, and Uttarakhand, has often experienced the greater influence of UP and Bihar on India’s foreign policy towards Nepal (Fig. 7.3). Because of their linguistic and ethnic affinities, Madhesh-based parties in Nepal have often accepted support from the policymakers in New Delhi to fulfill their interest. Despite being shamefully rejected in the 2013 election, when Madhesh-based parties staged their protest against the Nepali state in 2015 venting their ire against the newly promulgated constitution, they received the full back-up from New Delhi (Nepali Times, 2015). Because, it wouldn’t have been possible for the splintered Madhesh-based parties, who were able to garner only 11 seats out of 116 constituencies in Terai, to obstruct the major border points between Nepal and India on their own or without the firm support from Bihar and the UP (Bhattarai, 2017b). Because without the cooperation of customs officials and border police, it was not imaginable. Most interestingly, India sealed even those borders where protests hadn’t erupted (Nepali Times, 2015). Criticizing the Bharatiya Janata Party (BJP) government, Indian Congress party member Mani Shankar Aiyar stated that the blockade on Nepal is the conduct of the Modi government, not of India (The Economic Times, 2015). The blockade further embroidered the “Madhesi” vs. “Non-Madhesi” conflict in Nepal, which in the Kautiliyan strategy, denotes the fulfillment of the goal of Bhed (divide and rule policy). But India paid the price for its coercive Nepal policy by losing Nepal to China. Besides the transit treaties and agreements to increase land connectivity through railways and roadways, the ground for elevating Nepal-China military ties was also prepared. In 2017, Nepal Army held a joint military exercise with PLA on disaster management and terrorism for the first time (Giri, 2017). Interesting to mention here is, Nepal managed to escape the 2018 BIMSTEC military drill in India (PTI, 2018).

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Fig. 7.3 Nepal’s former prime minister Madhav Kumar Nepal (donning Nepali hat) dances in an evening cultural program organized on the premises of Nepal’s five-star, Soaltee Hotel, while the then Indian ambassador Ranjit Rae (extreme left with spectacles) watches him gracefully while audiences take the snapshots from their phones

Following the 2015 blockade, which made Oli the “tallest nationalist leader of Nepal” (Rae, 2021), it took a long time for the Nepal-India relation to regain an impression of normalcy (Bhattarai, 2017b). But, the best part about Nepal-India relations is that people-to-people ties always remain intact despite the collision at the state level. But, both of the perspectives—of Nepali state and of Nepali people residing on the borderlands—converge on how the “monopoly” of India over Nepal’s rivers as indicated by the Koshi agreement, Mahakali treaty, and Gandak treaty, provides more benefits to the UP and Bihar (Adhikari, 2014b). Besides little progress made in different multi-purpose hydro projects between the two countries, India often accentuates the issue of flooding in the bilateral meetings as part of the influence of India’s border states on its

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foreign policy behavior. In the August of 2014, the former Chief Minister of UP, Akhilesh Yadav blamed Nepal for flooding in the different parts of the state. While the Nepali bordering districts too, including Banke, Kanchanpur, Kapilvastu, Bardiya, and Mahottari remain inundated during the monsoon because of the construction of roads and dams by India, Yadav accused Nepal of not communicating about the release of water from the barrages in a timely manner (Bhattarai, 2017a). India’s Uttar Pradesh has a record of giving several prime ministers to India and it also sends many MPs to the Indian Parliament. As such, its leverage in Indian foreign policymaking and foreign policy behavior is understandable. Although the cases or issues concerning Nepal-India relations are directly dealt by Kathmandu and New Delhi, primarily through their official channels, i.e., residential embassies and ambassadors, the interest of the Indian border states is aptly visible in the implementation of the policies. Because, there have also been instances of how the implementation of India’s foreign policies by Indian bureaucrats has significantly diverged from the original policy framework formulated by the political leadership (Benner, 1985) altering the core message of neighborhood policy. The institutional constraint triggered by the cumbersome bureaucracy is largely responsible for New Delhi’s failure to bridge the gap between the broader commitment made by the political leadership and the sluggish administrative apparatus for implementing the political decisions. Although India’s neighborhood policy; as stated by the political leadership, demands a multi-layered and intense engagement with the neighbors, it lacks the relentless nurturing from the side of Indian bureaucrats (Kaura & Rai, 2020). Thus, the conducts of Indian bureaucracy and the manner it administrates and implements the plans, pledges, and promises that Narendra Modi has introduced under the broader framework of India’s neighborhood policy, stands as the key reason for New Delhi’s failure in maintaining an affable relationship with its neighbors. In the Nepali context, although much has changed from the time when Indian bureaucrats used to attend and guide Nepal’s cabinet meetings in the 1950s, the temperament of Indian bureaucrats to perceive the contemporary Nepal-India relations from the lens of the 1950 Treaty of Peace and Friendship, has discouraged the relationship to evolve in the changing times. The 1950 Treaty was signed between an Indian ambassador and Nepal’s Prime Minister.

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Today, while India’s roles and responsibilities are said to have risen at the regional and international fronts, why Indian bureaucracy has been reluctant, firstly in manifesting the same degree of political will revealed by its leaders on different occasions stressing India’s neighborhood policy; and secondly in displaying a level of flexibility in accommodating the new hopes and aspirations of the small countries. Any failure in not accomplishing both only suggests India’s rise without responsibilities.

Neo-Kautiliyan World View Named after ancient India’s strategist Kautilya, India’s neo-Kautiliyan foreign policy—an Asiatic term for neo-Realism—has not only swelled distrust and threat perception between India and its South Asian neighbors, but also, with its Hobbesian worldview, has pushed India’s neighbors closer towards China, in the milieu of Sino-Indian rivalry. Known as India’s Machiavelli, Kautilya argued that the Indian state should be able to use any means including Saam (Appeasement) Daam (Grant or assistance), Danda (Punishment), and Bhed (Divide) to fulfill its goals. Modi administration, today, has shouldered the same Kautiliyan approach in becoming the Chakravartin (universal ruler), which in modern-day world politics has more to do with “regional dominance” (Bajpai, 2021; Pande, 2018). In the process of fulfilling its desire for strategic autonomy and military self-sufficiency, New Delhi has catapulted South Asian region to China’s lap. As India’s neighbors were always looking for an opportunity to tamper Indian influence in the region, China’s increasing presence in the region offered them a retreat. The revival of Kautiliyan strategies in Modi’s foreign policy is the result of an understanding advanced by the contemporary Indian strategic thinkers and foreign policy analysts that India’s great power ambitions cannot be realized without strengthening its national power. After all, in the line of the key classical realists, including Thucydides, Hobbes, and Machiavelli, Indian strategist Kautilya also perceived the world around him as anarchic, and India had to develop its national power capabilities to cope with the state of anarchy and mayhem. But, while being escorted by Kautilya’s Raj Mandala theory or a model of concentric circles, where the immediate neighbor is rated as an enemy and neighbor’s neighbor as a natural friend, India’s foreign policy cannot escape the posture and policies of securitization, both in its formulation and enactment. With such an act of securitization, which stands in sharp opposition

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to today’s age of reciprocity and interdependence, South Asian countries take no less time to get lured by China’s increasing economic presence in the region. While Kautilya’s Raj Mandala suggests a policy of securitization towards India’s neighboring states, the different titles and labels assigned to India’s policies beginning from Nehru’s Himalayan Frontier, Indira Doctrine, Gujral Doctrine, and Modi’s Neighborhood First echo the continuity of the same Kautiliyan worldview in a different ways because all of them reveal the cruciality of South Asian region to Indian foreign policy (Pande, 2020). As New Delhi aspires to be a great power, it has always considered itself as a “hegemon” in the immediate neighborhood (Sahoo, 2016). Thus, India doesn’t entertain the presence of other powers in its backyard. While India has always projected itself in two fundamental ways: as a modern democratic state and the oldest civilization, the Indian foreign policymakers fleetly deem the entire subcontinent as one entity and any development in the region is significant to India’s foreign and security policy. Today, China’s increasing influence in India’s South Asian neighbors, including Sri Lanka, Nepal, Bangladesh is perceived by New Delhi as China’s “string of pearl” strategy to encircle India. Since the rise of both countries is impelled by “trade and as resource-consuming powers,” (Bajpaee, 2015) New Delhi perceives China-led BRI as a continuance of China’s encirclement strategy. New Delhi has perceived Beijing’s refusal to accept India’s predominance in the South Asian region as a prime factor in driving Sino-India rivalry (Garver, 1992; Jain, 2018). That’s why India is wary of Chinese infrastructure projects and investments in the region. Today, China is Bangladesh’s largest partner, which has colossally vexed India. New Delhi’s unease over China’s schemes to upgrade Sonadia port was a clear example. India was also infuriated by Bangladesh’s decision to join BRI. Growing Chinese investment in Maldives has also obliged New Delhi to treat Indian ocean as its backyard and principally secure its foreign policy towards the Indian Ocean archipelago. Above all, Pakistan’s decision to let China use the Gwadar port exceeded India’s anxiety towards Beijing is such a manner that New Delhi had to haul the US in its backyard (which India would have never done otherwise) to combat the increasing Chinese influence. Amidst the increasing Sino-Indian contestation, the geopolitical trap faced by the small countries has been such that either the decision-makers in the secondary states must confine themselves to India’s calls or exploit their survival strategy of balancing, which further

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securitizes the region with the vicissitudes of trust deficits and security dilemmas.

China’s Neighborhood Policy Among the eight South Asian countries, five—Afghanistan, Bhutan, India, Nepal, Pakistan—are bordered by China. Today, China considers South Asia as an access to further exercise China’s “opening up” program, and concurrently as the “corridor development” program under the China-led Belt and Road Initiative (BRI). Therefore, Beijing is building and funding mega infrastructure projects in different parts of South Asia (Brattberg & Feigenbaum, 2021). As Beijing remains deprived of its diplomatic ties with Bhutan, Nepal’s strategic setting provides a geographical advantage to China because out of major passages connecting Tibet with South Asia, dozens are through Nepal (Tao, 2017). As such, China has explicitly expressed its interest in utilizing Nepal’s geography to fulfill its South Asia ambitions by materializing the cross-border connectivity projects under the framework of Belt and Road Initiative (BRI) which are, however, critiqued by the West as interventionist and expansionist (Jain, 2018). But, China leaves no stone unturned to persuade the power elites in small neighboring countries with a jingle: “peaceful rise of China.” In the Nepali context, Chinese scholars and diplomats have been dispelling the doubts and suspicions harbored by Nepali public by avowing that Nepal’s faith in peaceful co-existence and non-aligned foreign policy is in line with China’s “independence and autonomy,” policy (Tao, 2017). Chinese strategists believe that China is keen to have a safe and secure neighborhood by sharing its unprecedented economic development and prosperity with its immediate neighbors, which, in due course makes its own “periphery” more stable and affluent. Although China gives credit to stable border with Nepal for easing its entry into South Asia (The Kathmandu Post, 2015), the news of “Chinese encroachment” in the borders and the course of action through which China was hauled in NepalIndia border problems indicates that Nepal may have to pay a big price for alluring Beijing to the Himalayas. Chinese leaders have been visiting Bangladesh, Nepal, and Sri Lanka frequently, which clearly displays an unending purpose to get persistently engaged in South Asia, and to reassure the small countries in the region that any kind of development in China-India relations would not be at their cost (Malik, 2001). China

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played a major role in the development of ports at Gwadar in Pakistan, Hambantota in Sri Lanka, and Chittagong in Bangladesh. The building of these ports is not the upshot of mere economic aspiration; rather, it has a strategic value. Already, the building of these ports has strategically encircled India (Jha, 2016). Still, China flamboyantly assures that her neighborhood policy in South Asia is in all respects economic and is steered by Panchasheel (Five Principle of Peaceful Co-existence) and Peripheral Diplomacy aimed at developing proposed and existing economic corridors under BRI, including trans-Himalayan corridor, Bangladesh-China-IndiaMyanmar (BCIM), China-Pakistan Economic Corridor (CPEC) and bilateral cooperation with Bangladesh, Sri Lanka, and the Maldives under the 21st Century Maritime Silk Road. All of these policies and initiatives are targeted at securing global leadership for China. After all, the economic rise of China and its interest and capability to fund infrastructural projects is the basis upon which China is all set to use its might. Thus, the rise of China doesn’t come only as an opportunity to be celebrated. Dynamic, adaptive and calculated threats from China’s rise to the sovereignty and territorial integrity of South Asian countries are already being feared. Considering the Indian Ocean as a strategic means to accumulate larger economic benefits, the China-led Maritime Silk Road (MSR) aims to build and upgrade different ports in the Indian Ocean, particularly by investing in the Maldives and Sri Lanka. China’s investment in the CPEC, especially the Gwadar port, also exposes China’s strategically economic and economically strategic interests. As China shows the hopes of economic development and pledges of connectivity infrastructure in the region, without fully decrypting Beijing’s clandestine objectives, the governments in South Asia are rushing to Beijing, as they could see in Beijing’s offer an opportunity to protect their regimes. For instance, while the Rajapakse government in Sri Lanka moved closer to Beijing, the Maithripala government acted cautiously against the backdrop of Indian influence. Nepal’s recent initiatives to diversify her trade, along with new rail projects are also the result of increasing discomfort with India. Some countries in South Asia, such as Pakistan, are convinced that China is an opportunity. Other countries, such as Sri Lanka and Bangladesh are treading meticulous steps towards China, depending on their governments’ ties with Beijing and New Delhi. Even while India’s trade relationship with China has expanded, the political relationship between them is a mess. In the year 2021, India’s trade to China crossed 125 billion dollars, with imports from China reaching

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a record of 100 billion dollars. In 2020, it had fallen from 92.8 billion dollars to 87.6 billion dollars because of the pandemic (Krishnan, 2022). It seems true that none of the South Asian countries, at present, is economically strong, to launch regional-level or global infrastructural projects like BRI. For instance, connecting the Himalayas with the ports of Mumbai, Cox’s Bazaar, Kolkata, and even up to Karachi, requires an immense investment. Above all, the South Asian region is yet to develop the infrastructural expertise in constructing the mammoth ports and launch the expensive railway plans. Thus, India’s South Asian neighbors count the China-led BRI project as an opportunity. But, China’s reluctance to recognize India’s preponderance in the region, while the latter aspires to be a Great Power, has triggered a geopolitical contestation. In the Kautiliyan worldview, China and India are projected as rivals because of their geography. But, while assessing their great power ambitions, the rivalry is driven principally by power and influence (Bajpai, 2021). Still, geography as one of the sources of national power cannot be overlooked (Sempa, 2002). For instance, today, India executes its foreign policy towards the neighboring states by weighing the Beijing’s influence on the countries of South Asia. Former Sri Lankan President Mahinda Rajapaksa’s unanticipated setback in 2015 after serving two terms in office was the result of his engagement with China. Because, for India, Sri Lanka is located within its sphere of influence. But, Chinese influence in the island country again resurfaced with the political come back of Rajapaksa brothers to the office as president and prime minister in Sri Lanka in 2019. Deeply embroiled in a severe economic crisis at present, Sri Lanka is walking a tightrope between Chinese “credit card,” and Indian support. Similarly, Bangladesh has become the hotspot for swelling geostrategic rivalry between China and India. Huge financial assistance for infrastructural development was pledged to Dhaka during the 2016 visit of Chinese President Xi Jinping. Today, Bangladesh is the largest recipient of Chinese lending after Islamabad under the BRI project, implementing 10 billion dollars worth of Chinese infrastructure projects in Bangladesh (Singh, 2019). The construction of Economic and Industrial Zone is underway. The Payra Power Plant and the Karnaphuli River Tunnel Project are being constructed. The construction of a bridge over Kocha River, which has been named as the 8th China Bangladesh Friendship Bridge, is also underway. Furthermore, dialogues are afoot for establishing the ChinaBangladesh free trade zone. Padma Bridge Rail Link project, which aims to link Dhaka with Jessore through Padma Bridge is also being completed

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with Chinese funds. By increasing its investment in Bangladesh, Beijing is trying to prevent Bangladesh from joining the US-led Quadrilateral Security Dialogue (QUAD). In May 2021, the Chinese ambassador to Bangladesh, Li Jiming, stated that “Relations with China will be damaged if Bangladesh joins the QUAD” (The Daily Star, 2021). As China’s clout is budding in the Maldives, India has been asserting that the peace, security, and stability of the archipelago nation in the Indian Ocean are in her interest. But, the way India considers the Indian Ocean as its backyard, is loathed by China. Pakistan permitting China to use Gwadar port has equally riled Indian leadership. At present, the port is operational, and ships Chinese goods to the Middle East and Africa. But, Gwadar East Bay Expressway and Gwadar International Airport are yet to meet their completion (Singh, 2019). Following the Uri attack of 2016, Indian Prime Minister Modi exposed a realpolitik posture against Islamabad by conducting surgical strikes against the terrorist groups across the defacto borders in Kashmir and suspending annual meeting on Indus Waters Treaty (Bagchi, 2017). Citing the worsing relations with Pakistan, to which China is attracted, however, Modi said in 2016, “Blood and water cannot flow together.” Beijing, too, weighs the strategic, economic, and geopolitical influence of New Delhi on the region and awaits to take advantage of the deteriorating relations between India and its neighbors. For instance, it was India’s harsh blockade on Nepal that offered space for China to move in Nepal. Following the blockade, Nepal government started exploring more trade routes with the North. Now, China herself is eager to materialize the Trans-Himalayan Corridor—railway linking Tibet with Kathmandu. The Trans-Himalayan Corridor begins from Chengdu of Sichuan province in China, which is being extended to the Sichuan-Tibet Railway from Tibet to Kathmandu through Ya’an, Qamdo, Lhasa, and Shigatse. With the materialization of this railway, India’s Himalayan frontier may face a grave crisis. As China’s relations with the South Asian countries are diverse, the responses of South Asian countries towards China also vary. Thus, we cannot generalize the receptiveness of the region towards China (Brattberg & Feigenbaum, 2021). Although Nepal and Bangladesh have chosen alternative models to finance their development activities, Sri Lanka and Maldives have been receptive to Chinese loans. To Dhaka, Beijing appears as the largest supplier of military hardware, which we don’t find in other three countries. What is more common about them is using China to neutralize India’s clout (Wagner, 2016). Particularly, after

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the “merger” of Sikkim into India, small neighboring countries started becoming fretful. For instance, Bhutan’s attempts towards cultural homogeneity started only after the annexation of Sikkim by India. General Ziaur Rahman in Bangladesh had also started to foster closer ties with the leadership in Beijing and Islamabad to neutralize the influence of New Delhi. Now, India and China have achieved goods scores in terms of their economic growth. The upsurge in the numbers of urban middle class in both the countries indicates the socio-economic development. Still, there are considerable differences between them. The combined population of both the nuclear powers—India and China—is home to a third of humanity. Today, while Chinese economy stands at the top in terms of PPP (Purchasing Power Parity), Indian economy is ranked third largest in terms of PPP. Today, both—the largest democracy and the communist state—have abandoned the centralized state planning and have tremendously embraced the principles of market reforms. Although China’s entry in India’s neighborhood has irked New Delhi, both the countries stand together in several multilateral forums including Shanghai Cooperation Organization, BRICS, and Asian Infrastructure Investment Bank (AIIB). Although India has harbored skepticism and distrust towards China-led BRI, New Delhi has joined AIIB with 7.5% of voting shares. Precisely, India is the second-largest shareholder in the bank. China has 26.06%, while Russia has 5.93%, and Germany has 4.15% of voting shares in the bank (Lama, 2016). China and India have also decided to resist cooperatively against the insistence of the western countries on reducing their carbon emissions. Both countries are also aware of the gravity of sidelining their shared snags, and rather emphasize on the prospects for economic cooperation. Today, while India’s Prime Minister Narendra Modi is eying for more foreign capital and technology on India’s railways and factories, China’s infrastructure firms, which are good at building large projects, and constructing new cities, could revitalize the quid-pro-quo between the two countries. India-China relations can be dated back to thousands of years. The bilateral relations witnessed a feeling of distrust only after they had fought a brief border war in 1962. Since then, a sense of hostility always prevailed in their relations except for the attempts towards improving economic relations. In the year 1998, the then Indian Defense Minister George Fernandes had identified China as India’s “potential enemy.” Bilateral issues between India and China have not remained strictly bilateral in

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nature. After the end of Cold War, and following the economic reforms in India and China, both the countries have been expanding their external relations based on their requirements and in terms of their aspirations to be great powers. They have provided places for the other states as well in their bilateral equations. The role that Pakistan and the US have come to play in Sino-Indian relations is perhaps the most significant of these external relations, which have made the resolution of political issues between India and China more difficult and complicated (CFR, 2016; Koehn, 2010). India has often raised question over China’s motive to continuously protect Pakistan-based terrorist group Jaish-e-Mahommed (JeM). Following the 2019 terrorist attack in Jammu and Kashmir killing over 40 Indian paramilitary policeman, Indian suspicion became more pronounced (JeM) (Tharoor, 2019). India also cited Chinese objection for the delays in having JeM’s founder and Chief Maulana Masood Azhar sanctioned under United Nations Security Council Resolution 1267. China withdrew its position in May 2019 which designated Azhar as a global terrorist. China’s objection was the upshot of the “all-weather friendship” between Beijing and Islamabad, which has also stimulated China—one of the P5 members—to obstruct India’s attempt in acquiring the permanent membership of the United Nations Security Council (UNSC). The China-Pakistan Economic Corridor, passing through the disputed region of Kashmir under the BRI scheme, connects western China to the Gwadar port on Pakistan’s Baluchistan coast. The 66-billiondollar CPEC project is expected to downsize Chinese cost by more than half for trade with the Persian Gulf (Tharoor, 2019). India has, however, unendingly protested against CPEC arguing the economic corridor has violated its sovereignty. In the foreign policy decision-making process, geographical variables are considered more permanent. Because, leaders come and go, and even great leaders and dictators die, but mountain ranges stand unaffected as they are (Spykman, 1942). Despite the prospect of prodigious economic engagements between the two countries, India and China, today, have become the victim of their territorial disputes exacerbated by conflictual geopolitical ambitions steering the regional power politics. Usually, India’s capacity to play an effective role globally relies on its ability to confirm stability in her relationships with its immediate neighbors in the region. China’s growing engagement with India’s immediate neighbors has tremendously complicated India’s relations with these countries. Most of the visits of Indian Prime Minister Narendra Modi to the South

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Asian countries and Central Asian republics shared a common factor i.e., countering China’s growing influence in India’s backyard (Singh, 2015). India’s $1 billion credit line to China’s neighbor Mongolia is an apt example. And what’s more, Indian leadership expressed its reservations on the Maritime Silk Road under BRI by not responding to China’s proposal of deep sea mining in the Indian Ocean with India (Singh, 2015). Modi remains uncomfortable by China’s persistent support for Pakistan, despite of the Wuhan bond, which Modi claimed to have established with President Xi in Wuhan of China in 2018. Notwithstanding India’s renewed interest, China has been unrelentingly blocking India’s entry into the Nuclear Suppliers’ Group. Modi, however, couldn’t prevent China from constructing China-Pakistan Economic Corridor (CPEC) through Kashmir. Also, Modi remained mute spectator while China was reiterating its claim to the Indian state of Arunachal Pradesh (Tharoor, 2019). With China’s aggressive entry into India’s backyard, a new rivalry has brewed between two the Asian giants. Here, it should be understood that they are Asia’s two big power houses not only because of their market or striking capabilities, but predominantly because of their territory, population, and abundance of civilization (Kaplan, 2012). The possibility of China’s rapprochement with India has been interlaced by Beijing’s relations with Pakistan and New Delhi’s relations with Washington. India’s Parliament Standing Committee on External Affairs has already recommended the Modi government to be more careful in dealing with China, at least by not continuing with the “deferential” foreign policy towards Beijing (Tharoor, 2019). Because, China has implemented its strategy of encircling India by forming closer and stronger ties with Indian’s neighbors. Under the aegis of encirclement strategy, China has proposed, planned, and invested extensively in the connectivity projects in South Asia. Although Hambantota port in Sri Lanka has stirred controversy and a global debate on China’s “debt trap diplomacy” (Rajah et al., 2019), various BRI projects are still underway in Sri Lank claiming how Sri Lanka’s debt crisis is not directly related with Chinese debt but with borrowings from the Western capital markets. Rather, China-sponsored projects have boosted Sri Lanka’s economic capabilities. Disseminating such narratives favorable to China’s strategy of encirclement, Beijing is building Colombo Port City in Sri Lanka. Beijing has already helped Sri Lanka to build Norochcholai power station, Colombo International Container Terminals, Moragahakanda dam and Rajapaksa Airport. China values Sri Lanka, economically, as a low-cost

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transit—situated between Dubai and Singapore—for shipping and logistics (Singh, 2019). China’s desire to negotiate its disputed 470 km border with Bhutan should also be understood in the context of Beijing’s strategic engagement in South Asia. With the worsening of China-Bhutan relations following the Chinese occupation of Tibet in 1951, Bhutan sought refuge in the defense partnership with India. But New Delhi has left no stone unturned to prevent China from negotiating a territory exchange deal that would threaten India’s national security. In the June of 2017, the two Asian nuclear powers almost went to border war over the Doklam plateau, where India had sent its troops to block China’s effort in constructing road in the disputed trijunction. The India-Pakistan rivalry is often cited as a persistent cause for hampering the progress of South Asian Association for Regional Cooperation (SAARC), which, in principle, is committed to enhance the economic opportunities, and protect the interest and security of small states in the region through the pursuit of appropriate policies and actions. China entered into SAARC as an observer in 2005. To further aggravate India’s anxiety, Pakistan, Nepal, and Sri Lanka, are supporting China’s full membership in SAARC. Through trade and investments, China has now entered the markets in South Asia more aggressively. Whilst China has improved its relations with the small states through treaties and bilateral cooperation, India’s role in the region is economically perceived as protectionist. Bangladesh and Sri Lanka perceive India as a barricade against their exports aiming to promote regional economic integration (Pant, 2014). With the construction of roads and ports in India’s neighborhood under BRI, and by boosting military engagements in the countries on India’s periphery, China has not only got an entry into India’s backyard, but has also provided space for the small states in South Asia to play China against India. Most states in the region plump for China card to tactfully balance the Indian influence in the region (Pant, 2014). Now, to India’s trepidation, many South Asian states have already joined China-led BRI. Indian Prime Minister Narendra Modi has often prioritized South Asia in his foreign policy objectives. But he has not only failed in inspiring neighboring countries to join India’s success stories, but also all his attempts to keep China out of the region have backfired. China’s interest and ambition to enter the South Asian market through Nepal has infuriated India to an extent that New Delhi is ready to lure Washington to its traditional sphere of influence, to repel China from its backyard. India is also aware of the fact that China is trying to kill

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two birds with one stone: China-led BRI is strategically economic and economically strategic. Unlike China’s links and engagements in East Asian region, which is heavily economic in nature” in South Asia, links are primarily driven by politics, strategies, and military (Bindra, 2017). China’s engagement in Nepal has certainly elevated a sense of wariness in the psyche of Indian decision-makers as Beijing plans to extend its railways right up to Kathmandu from Tibet’s Lhasa, and later take it very close to Indian borders in order to achieve the aforementioned twin goals. Although the trade relations between India and China have improved, suspicion and distrust, precipitated by disputed border claims and Dalai Lama’s residency in India, have always enthralled their relationship, which can reach to the extreme at any time (Rachman, 2016). Therefore, their competition for influence in South Asia and neighboring regions may provide more rooms to maneuver for the power elites in small countries. Still, the ingredient of threat perception in Sino-Indian rivalry remains a major source of insecurity to the people in South Asian region, who have always looked at the economic rise of India and China as the rise of Asia. Today, their rise hasn’t been a rise with responsibility, at least to the Nepali nationals who have been lured to a greater extent by Gulf countries than by the job and investment markets in India and China. The new Nepali generation that grew up by watching Indian soap operas in Chinese televisions had expected a collaborative role of India and China in tourism, trade, and investment sectors of Nepal. But it hasn’t happened, typically because of the increasing Sino-Indian rivalry, and Nepal is not in a position to choose one over the other. But, in the manner of addressing their strategic concerns, Nepal shouldn’t compromise its independent foreign policy objectives of world peace and belief in international law as divulged by its policy towards Tibetan refugees residing in Nepal.

Tibetan Question China’s foreign aid to Nepal is directed to fulfill twin objectives: firstly, to minimize Indian influence in Nepal; secondly, to pressurize government in Nepal curb all kinds of anti-China activities by Tibetan refugees residing in Nepal. Since the fall of monarchy in Nepal in 2008, China has taken the issue of Tibetan refugees alarmingly. A confidential U.S. embassy cable published by Wikileaks in 2010 mentioned that “Beijing has asked Kathmandu to step up patrol and make it more difficult for Tibetans to enter Nepal.” China’s prioritized interest in Nepal since

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the 2008 Lhasa riots has been to deter Tibetan activists from internationalizing the condition in Tibet and demanding Tibetan independence (Acharya, 2018). While Chinese diplomats have frequently insisted governments in Nepal to thwart all types of “anti-Chinese” activities, high-level Chinese government officials visiting Nepal have incessantly emphasized on the same (Sidner, 2012). Amidst increasing Chinese pressure, governments in Nepal find it difficult to strike a delicate balance between protecting the rights of Tibetan refugees, and fulfilling the Chinese demands. Beijing has been awarding Nepali security forces for handing over Tibetans fleeing across the borders with financial incentives (Sidner, 2012). Not to let the bilateral relations with China deteriorate because of the protests from campaigners of “Free Tibet” movement during the visit of Chinese President Xi Jinping to Nepal in 2019, some of the Kathmandubased Tibetan activists were detained for a short time and Nepal Police beefed up the security not only around monasteries but also at the different places, to avoid any kinds of untoward incidents (Rai, 2019). Tibetans in Nepal are barred from celebrating the birthday of their spiritual leader, Dalai Lama. The reports of deportation of Tibetan refugees by Nepali authorities to China should not be only understood from the policy perspective of how the Nepal government recognizes only those Tibetans entering Nepal before 1989 as refugees, and those entering after 1989 are illegal immigrants, but also as the result of China’s policy of securitization. Because the Tibetan refugees crossing borders into Nepal significantly decreased after 2008 as China heightened its border security after the Beijing Olympics (Reuters, 2008). In the 1990s, Nepal and UNHCR had reached a “gentlemen’s agreement” to provide exit permits for new arrivals from Tibet transiting to Dharamshala in India. But, today, Nepal has been deporting Tibetans crossing Himalayas to China, thus not adhering to the principle of non-refoulement, and jeopardizing their religious, cultural, and linguistic freedom, just to attract little more aids and assistance from China (Giri, 2021). The Chinese government has blacklisted several Tibetan leaders in the diaspora and has shared their information with many countries, including Nepal. But in June 2019, when immigration officials in Nepal mistakenly deported a wrong man with the same blacklisted name of Penpa Tsering, the incumbent Sikyong (President) of the Tibetan Parliament-in-exile, it was perceived by the international community as China’s increasing pressure on Nepal and was widely condemned. The Home Ministry of Nepal

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was unaware about the deportment. “Such names do not come to us. China directly consults with the Department of Immigration in Nepal to refuse the entry of people China finds suspicious,” said the Home Ministry spokesperson Ram Krishna Subedi, while talking to The Kathmandu Post, on June 26, 2019 (Giri & Gurung, 2019). The mistaken Penpa Tsering was an American citizen. In December of 2018, a Swiss national Penpa Tsering was detained from Boudha and was also interrogated at the local police station. After his friend provided the evidence that he was not the same person that the police were hunting, he was released (Giri & Gurung, 2019). In the Tibetan community, Penpa Tsering is a common name, which doesn’t mean that immigration officers should be taking the blacklisted names lightly. When two parliamentarians from Nepal had traveled to Latvia in May 2019 to attend a program organized by the Latvian Parliamentary Support Group for Tibet and the International Network of Parliamentarians on Tibet, one of the lawmakers representing Samajbadi Party, Pradip Yadav, was suspended for six months for his participation in that conference. The same month, three journalists working in the state-run media were scrutinized by the Ministry of Communications for having translated and published an article on the Dalai Lama’s health. Following the Lhasa uprising of 1959–1960, many Tibetans crossed the Himalayan passes, and have been living as refugees in Nepal and India. The flow of Tibetans to Nepal in 1959 was a small fraction of the main flow to India, as the spiritual leader of Tibetans, Dalai Lama had escaped to India on March 17, 1959, and declared the formation of Tibetan Government in Exile or the Central Tibetan Administration (CTA) at Dharmashala in April 1959. After Dalai Lama fled to India, about 100,000 Tibetans left Tibet, the majority of them joining their leader in India, while others stayed in Nepal, Bhutan, and Sikkim. Until 1989, at least 20,000 Tibetan refugees were officially registered in Nepal. But, since 1993, the government hasn’t updated the record. Also, Nepal entered into a gentleman’s agreement with UNHCR and ensured to provide a safe passage to Tibetans crossing Himalayan passes to reach India and beyond. Although Nepal government recognized Tibetans arriving in Nepal before 1989, and their descendants as refugees, today, many Tibetans are undocumented, as no registration has been done since 1993. At present, neither the government of Nepal nor UNHCR has the updated and accurate data of the Tibetan refugees

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living in Nepal. It is said that 3 out of 4 Tibetans do not possess upto-date refugee cards. Without the refugee cards, which provide them with the right to reside and travel in Nepal, they officially become stateless (HRW, 2014). They can’t own property. Legally speaking, obtaining driving license, work permit, or travel visa becomes a herculean task for them. And, Nepal is not in a position to make their lives easy until it receives green signal from China. As China gets alarmed by the antiChinese activities of Tibetan diaspora in different parts of the world, a small country Nepal situated between two big powerful states, cannot afford to neglect the bilateral relations with the rising China. But, being committed to “One China Policy,” doesn’t mean Nepal has to sacrifice its foundational beliefs in world peace and regional harmony, which are officially enumerated in constitutional provisions on Nepal’s foreign policy objectives. Above all, Nepal’s recurrent failure in striking a clear and unequivocal balance between its bilateral relations with China, on the one hand, and addressing the human rights concerns of Tibetan refugees in Nepal, on the other hand, may raise more questions on Nepal’s claim to neutrality.

Insecure Borders: China’s Encroachment? Border issues with China have revealed Nepal’s immature foreign policy. Because, two different governments have come up with two different understanding regarding border issue with China. In the September of 2020, when reports came out that Chinese side had constructed about 11 buildings in a remote site of Humla district in Nepali territory, KP Oli government stated that there were no border problems with China and the construction had taken place in the Chinese territory (Sharma and Crossley, 2020). Although the border issue with China was further publicized by Nepali Congress provincial lawmaker Jeevan Bahadur Shahi after he reported about pillar no. 12 to Karnali Provincial Assembly demanding for a detailed inspection by a joint team, the press statement issued by Ministry of Foreign Affairs of Nepal on September 23, 2020, stated that, “the Department of Survey, Government of Nepal, based on the official records, reports of the joint field inspection and boundary maps, has verified and confirmed that the said buildings are not located within the Nepali territory.” The same press statement also announced that when the issue attached to building construction was disseminated by some media reports in 2016, an inter-ministerial team was formed and following

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the field inspection, it was concluded that the reported building was located almost one kilometer inside the Chinese territory from the SinoNepal borders, which have been delineated and demarcated based on the Boundary Treaty and Boundary Protocols signed between the two countries in different periods of time. In 1961, Nepal and China concluded the boundary talks and in 1963, two sides completed the demarcation by agreeing to install 79 core pillars and 20 sub-pillars. In 1970 and 1988, Nepal and China had renewed the boundary protocol (Fig. 7.4). As soon as Oli was replaced by Nepali Congress’s Sher Bahadur Deuba, he formed a five-member team to study the border problems with China. The study panel, from its field visit, came to identify the problems in Border Pillars from 4 to 13. The report claimed that Chinese side installed wires and fences and was attempting to build a permanent structure in the Nepali territory. According to the report submitted by the study panel, the 1963 Boundary Protocol was violated as the Chinese side constructed fences towards pillar no. 10 which is located 32 meters away from NepalChina joint pillar 9(2). The report also claimed how Chinese side was

Fig. 7.4 Horses grazing on Nepal-China borderlands in the Limi valley of Namkha Rural Municipality in Humla district of Karnali province. Limi, which geographically resembles Tibetan topography, is used by travelers to reach Kailash Mansarovar Lake—a pilgrimage destination to both Hindu and Buddhist (Photo Courtesy: Tenzin Norbu Lama)

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obstructing Nepali nationals from grazing their livestock in the Nepali territory. The six-member study panel which included representatives from the Armed Police Force, Nepal Police, National Investigation Department and the Department of Survey, suggested the government to resolve the existing issues by constituting a joint inspection group of experts. Because, no sides can repair the border pillars unilaterally. As per the boundary protocol, both the sides are supposed to conduct a joint inspection every ten years. But, since 2007, the joint inspection hasn’t been conducted. Before the joint announcement of the height of Mt. Everest in the December of 2020, Nepal had proposed for a joint inspection of the border. Therefore, instead of hastily deeming it only as an act of encroachment by the Chinese side (Pollock, 2022), its best to initiate a diplomatic channel for the joint inspection of the border. The major question is, why Nepal’s border problems with China are not much publicized in the same line as Nepal’s border dispute with India is. However, it must have developed a realization in the foreign policy circles of Nepal that policy divergence on the issue of territorial integrity is a grave challenge to a country’s national security and vital national interest. Particularly for the strategically located country, keeping its borders intact is certainly important. After all, it begins slowly with broken and missing pillars and takes the shape of border dispute with the claims and counter claims. Once the area is securitized, it results into a border conflict. Also, making sense of China’s border problems with many of its immediate neighbors, Nepal needs to practice a mature diplomacy.

Xi Jinping Thought: Sinicization of Nepali Political Parties China confided on Nepali monarchy for a long time. But, after Monarchy was overthrown in Nepal in 2008, China started looking for a reliable partner to fulfill its interest. But, Kathmandu’s political wrangling during the constitution drafting process, at least until 2015, largely frustrated Beijing. However, following the unification of two major communist parties in Nepal in 2018, Beijing remained hopeful that its strategic and economic interests in Nepal won’t be compromised. Beijing strategic interest in Nepal is attached with the issue of Tibet and One-China policy (Bhattacharya, 2013), while its economic interest lies in getting

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connected with the South Asian markets via Nepal after the successful materialization of trans-Himalayan railways (Boyle & Shneiderman, 2020) linking Tibet with Kathmandu and ultimately to Indian borders. Most of the high-level visits from China to Nepal, including that of President Xi Jinping in 2019 have reinforced the same. But, before the visit of Xi Jinping, his doctrine commonly known as Xi Jinping Thought was introduced in Nepal. For the first time in the history of Nepal-China relations, political leaders and cadres of the unified communist party were trained on Xi Jinping Thought. While Beijing was stretching its financial and technological clout across the world, China resorted to Xi Jinping Thought in exporting its ideology to Nepal. China’s two-day training on Xi Jinping Thought came at the time, when the unified communist party was looking for a political ideology to drive their party after merger. While CPN-UML had embraced “people’s multiparty democracy,” Maoist Center had faith in “21st-century people’s democracy” as its political ideology, before the unification. Thus, Beijing found an appropriate time to install Xi Jinping Thought among the leaders of the communist parties in Nepal. It not only invited a threat to Nepal’s free and independent decisionmaking political system, but also the exposed presence of uncertainities and inconsistencies in the foreign policy behavior of the political parties of Nepal. Although Xi Jinping Thought is considered as a new official political doctrine for China to consolidate and strengthen power at the national and international level (Buckley, 2018), Beijing’s desire to install the same value in Nepali political spectrum was impractical and coercive. Because Nepali societies differ fundamentally with Chinese societies. Political ideology exercised in a closed society cannot be applied in an open society. In the same manner, the Nepali constitution, its political orientation, system of governance, power sharing, and nature of political parties is discernibly different from what is politically practiced in China. Xi Jinping Thought promotes the supremacy of the communist party and reiterates that a powerful and unified China can be established only by consolidating the power of the Communist Party of China (CPC) (Buckley, 2018). But, the political system in Nepal is democratic, and elections are the key to come to power. After the 19th Convention of the Communist Party of China in 2017 accepted Xi Jinping Thought as its guiding principle, it was unanimously passed by the 2,287 delegates to the party congress. The Xi Jinping Thought states that:

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The Communist Party of China shall uphold its absolute leadership over the People’s Liberation Army and other people’s armed forces; implement Xi Jinping’s thinking on strengthening the military; strengthen the development of the People’s Liberation Army by enhancing its political loyalty, strengthening it through reform and technology, and running it in accordance with the law; build people’s forces that obey the Party’s command, can fight and win, and maintain excellent conduct; ensure that the People’s Liberation Army accomplishes its missions and tasks in the new era; foster a strong sense of community for the Chinese nation; uphold justice while pursuing shared interests; work to build a community with a shared future for mankind; follow the principle of achieving shared growth through discussion and collaboration; and pursue the Belt and Road Initiative.

Among ten clauses, the first five focus on the military, while the next four on society, and the last one on foreign policy (Babones, 2017). More precisely, it echoes the concerns of President Xi on Two Centennial Goals. Elucidating the importance of two centenary goals of the CPC during the 19th National Congress of the Communist Party of China (CPC), President Xi identified it as the foundation stone for achieving the “Chinese Dream”. Two centennial goals are: (a) to build “a moderately prosperous society in all respects by 2021, to celebrate the CPC’s centenary;” (b) To build “a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by 2049, to celebrate the centenary of the People’s Republic of China”. To achieve these goals, certain strategies and policies have been devised. One of the grand strategies is “Xi Jinping Thought,” which is aimed to develop China as a powerful, prosperous, and socially harmonious country, and to establish “Socialism with Chinese characteristics” in China. Since the beginning of communist movement in Nepal, the country has experimented with different kinds of communist ideologies. At times, the communist parties have merged, and there have also been the painful cases of their splits. While China had just introduced “Xi Jinping Thought,” Nepal also witnessed the merger of two powerful communist parties of Nepal—Maoist Centre and CPNUML. Interestingly, the new unified communist party was perceptively attracted to China’s political and development models (Bhattarai, 2019). Today, both the parties have already split, not because of the political differences, but more because of the conflicting interests. In such an unfavorable scenario, Xi Jinping Thought alone may not be able to bring all the communist parties together in Nepal.

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Those Nepali communist leaders, who wanted to learn from the Chinese experiences, also clearly understand that Xi Jinping Thought is the Chinese style of organizing and managing the party which better suits China, not Nepal. Because Nepal’s constitutional value and democratic spirit stands in stern opposition to Xi Jinping Thought, at the heart of which lies the ambition of Chinese President Xi and his party to increase their supremacy inside China by consolidating power. But the supremacy of a single party in Nepal is constitutionally unacceptable. It was the coping strategy of Nepali communist leaders. With India’s Modi, their foreign policy appears pro-BJP, while with China’s Xi, they easily accept to get trained in Xi Jinping Thought. While developing friendly relations with a country is laudable, entertaining an imposition of specific political doctrine or indoctrination of a particular ideology through training is a matter of grave concern, and thus, unacceptable, as it invites serious threats to democratic choices, political independence and sovereignty. In the two-day symposium, the Nepali communist leaders were taught about the ways to build a comfortable society and enforcing party discipline.

Responsible Rise? Today, the rise of India and China is discussed not only inside their countries and regions they represent, but also globally. Nevertheless, the small countries located in their vicinity have their own ways to appraising their rise. Nepal, located between them, sees their rise in two ways: as an opportunity to get benefitted from their rise, and also as a threat when their rise is not responsible, which however offers certain benefits of “balancing” to the power elites. Nepal considers Xi Jinping’s support in transforming landlocked Nepal into a land-linked country through connectivity projects a responsible act in the context of the plight of remoteness faced by landlocked countries. But China’s endeavors to impose its political doctrine in Nepal turn China’s rise irresponsible. In the same manner, China’s assistance in diversifying Nepal’s trade and transit may be considered as a responsible conduct if that could be of any help in ending Nepal’s asymmetric dependence on India and also to get tied to the global value chain. But, gauging the delays and deferrals in the proposed connectivity projects, China’s interest seems to be more strategic: to pull Nepal away from the Indian sphere of influence. The way Beijing dictates Nepal’s policy

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towards Tibetan refugees by doling out aids and assistance also doesn’t validate China’s rise with responsibility and accountability. Investing in Nepal’s hydropower by the Chinese companies is encouraging but abandoning the projects without completing them doesn’t suit the behavior of the rising power. Thus, rise should come with accountability and developing political relations with all the political parties in Nepal is healthier for the bilateral relations between Nepal and China, but the reports of Chinese diplomats lobbying against American investment in Nepal don’t give a good message. As China’s presence in Nepal is more confined to tampering Indian and American influence, it resonates China’s security dilemma, whose presence in the foreign policy priorities of the rising powers only encourages an act of securitization, not the spirit of accommodation and accountability. But, it would be erroneous to compare China’s rise with that of India, as China’s economic rise began quite earlier than that of India. Because of its open border with India, Nepal has always benefitted from Indian markets and investments. But, India’s rise, too, shouldn’t come at the cost of the small countries in its vicinity. Indian Prime Minister Narendra Modi’s reluctance to receive the report prepared by Eminent Persons’ Group (EPG), which was expected to resolve assorted problems riveting Nepal-India relations, traces New Delhi’s denial in being accountable to the concerns of its neighbors. Paying no heed to Nepal’s repeated calls in resolving the borders problems between the two countries with the diplomatic efforts, signals an absence of accommodative policy in New Delhi’s behavior. India’s rise without responsibility is largely visible in its securitization policy that New Delhi has revitalized to fulfill its interest. In 2015, when Nepal refused to incorporate India’s demands in its new constitution, New Delhi welcomed it with a blockade on the landlocked country. More than its institutional constraints, Nepal’s presence in the regional affairs and world politics has been restrained by its geopolitical confinement (Khatri, 1998). If India and China are really willing to be the drivers of the Asian century, they should take their immediate neighbors into confidence, particularly through their neighborhood policies. Consistency in their policies and predictability of their postures may help the public in India, China, and Nepal to understand where their relations are heading. In turn, it will help the decision-makers in Nepal to set a clear and achievable goals (instead of adopting the strategies of balancing, coping, and hedging) to fulfill the objective of peaceful and stable neighborhood.

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The pathetic state of border infrastructure has always generated a sense of despair among the Nepali people, while Nepali politicians are not tired of labeling Nepal as a bridge between India and China. With “Bridge” metaphor, Nepal aims to cope with the rise of China while Beijing finds the metaphor fitting in materializing its ambitious BRI connectivity projects. Weighing the status of Nepal’s land borders, Tatopani and Rasuwa with China’s TAR, it is understandable that development of border infrastructure is of an utmost need, which should be, however, planned taking into consideration the hostile nature of geography and geo-engineering challenges. The present condition of Sino-Nepal borderlands is not favorable to trade and connectivity. Although Nepal’s borderlands with India are comparatively favorable in terms of geography, traffic congestion, trade barriers, dilapidated roads are the frequent sight in the border towns. Thus, the rise of India and China should be more visible in their bordering areas with Nepal so that the value of cross-border connectivity projects won’t be limited to being exploited as political rhetoric. Today, China and India are not in a position to deal cooperatively against the external forces, as they fought against imperialism and colonialism in the past. Because, neither India can dismiss its strategic partnership with the U.S., nor China is in a position to compromise it’s “all-weather ties” with Pakistan. Saddest of all, they have not been able to invent sufficient organizations, which could have accommodated their strength, influence, and differences in an institutionalized form. Earlier, Bangladesh China India Myanmar (BCIM) economic corridor had generated some hopes when it was introduced in 2013. But, China’s desire to materialize the BCIM corridor as one of the corridors under BRI framework, over which India has certain reservations, made the cross-border connectivity project officially fade away from the list of 35 BRI projects introduced in the second BRI forum for international cooperation, which took place in Beijing in April 2019 (Lama, 2020). In such a context, any attempt made by Kathmandu to fulfill its search for connectivity-driven prosperity by exercising a “transit diplomacy” (KC and Bhattarai, 2018) would be futile. Suggesting the relevance of Panchasheel in resolving their differences would more be a mere fantasy, although both the countries have embraced the five principles of peaceful co-existence, at least in their foreign policy objectives. Because, regaining normalcy in SinoIndian relations depends on three important factors: firstly, their response to the territorial conflicts in the Himalayas; secondly, their response to the

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Sino-Pak engagement and U.S.-India strategic partnership respectively; thirdly, their interaction in the South Asian region. Until then, power elites in the secondary states of South Asia don’t miss any opportunity to maximize the benefits from the multidimensionality of the Sino-Indian conflict, which makes their claim to neutrality appear more ambiguous and, that in turn, exhorts the rise of India and China more irresponsible.

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Index

A Abolition of monarchy, 86 Absolute neutrality, 96 Absolute victory, 76 Abstention, 106 Accommodation, 51 Accountability, 59, 109, 250 Acharya, Tanka Prasad, 49 Act East Policy, 93, 220 Active participation, 8 Active politics, 10 Act of balancing, 17 Act of securitization, 250 Ad-hocism, 202 Adventurism, 51 Aeronautical, 152 Afghanistan, 151 Africa, xi African, 151 Age of prosperity, 120 Aggression, 51 Agha Mohammad Yahya Khan, 127 Aging populations, 185

Agreement on the Question of Boundary, 52 Agreement on Tibet, 80 Agriculture, 158 Agro goods, 163 Aid dependency, 121 Aid diplomacy, 138 Aid-driven state, 124 Aids, 22 Airbase, 81 Airdrops, 81 Airport, 166 Airways, 161 Aiyar, Mani Shankar, 228 Alexander, 188 Algeria, 46 Alignment, 82 Alliance, 81 Alliance formation, 193 Allies, 123 Allocated, 218 All-party meeting, 156 All-weather friendship, 238 All-weather route, 73

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. Bhattarai, Nepal Between China and India, https://doi.org/10.1007/978-3-030-99974-2

261

262

INDEX

Alpine passes, 9 Amban, 80 Ambiguous, 125 Ambivalent, 125 Amended Constitution, 56 Amendment, 156 American, 160 American project, 157 American standpoint, 57 Amity with all, 172 Ammunition, 58, 82 Analogies, xvii Anarchical, 136 Ancient humanities, 211 Anglo-Gurkha war, 17 Annexation of Tibet, xi Anniversary, 150 Antagonistic, 61, 150 Anti-aircraft guns, 38, 58 Anti-China activities, 84 Anti-China protests, 142 Anti-Chinese, 242, 244 Anti-Chinese protests, 81 Anti-corruption, 158 Anti-India demonstrations, 56 Anti-Indian, 20 Anti-Indian demonstration, 127 Anti-Indian sentiments, 5, 61 Anti-Monarchy, 127 Anti-nationals, 156 Anti-Panchayat activities, 56 Anti-Rana struggles, 41 Araniko highway, 73 Arbitration, 9 Arbitrator, 34 Archeologists, 216 Archipelago, 159, 232 Archrivals, 19 Armament, 10 Armed insurgency, 15 Armed neutrality, 10 Armed outfit, 55

Armed Police Force, 246 Armed raids, 47 Arms Assistance Agreement, 54 Arms purchases, 58 Artificial enlargement, 72 Artificial intelligence, 185 Artificial shortage, 110 Artillery, 97 Arun, 168 Arunachal ambush, 130 Arunachal Pradesh, 239 Asian century, 22 Asian countries, 14 Asian giants, 7, 239 Asian Infrastructure Investment Bank (AIIB), 118 Asian Paints, 169 Asian republics, 239 Asia Pacific region, 11 Assertive diplomacy, 114 Asymmetrical dependence, 99, 112 Asymmetrical relations, 42 Asymmetry, 98 Atomic bomb, 75 AUKUS, 133 Australia, 187 Austria, 8 Authoritarian regimes, 81 Autonomous foreign policy, 61 Autonomous identity, 108 Avalanches, 90 Aviation, 161 Azhar, Maulana Masood, 238

B Bahadur, Raj, 54 Bahamas, 194 Balance of payment, 123 Balance of power, 107 Balancing, 3, 250 Balancing strategy, 49

INDEX

Ballistic missiles, 91 Banaras, 60 Bandung conference, 14 Bandwagoning, 21 Bangalore, 218 Bangladesh, 169 Bangladesh-China-India-Myanmar (BCIM), 171 Bangladesh-China-Myanmar Economic Corridor, 92 Bangladeshi Liberation War, 128 Banks, 166 Banquet speech, 105 Barbarians, 35 Bargain, 164 Barricade, 240 Barrier, 119 Basic Exchange and Cooperation Agreement (BECA), 152 battalions, 16 Battle, 82 Bay of Bengal, 220 Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), 10 Beacon, 214 Behest of someone, 21 Beijing, 19 Beijing’s perception, xi Beijing Olympics, 84 Belligerents, 12 Belt and Road Initiative (BRI), 19 Betravati treaty, 32 Bhairahawa, 166 Bharatiya Janata Party (BJP), 228 Bhattarai, Baburam, 195 Bhattarai, Krishna Prasad, 184 Bhed, 76 Bhed, 231 Bhotekoshi, 168 Bhutan, 6, 218

263

Bhutanese refugees, 84 Biden administration, 150 Big Brother, 184 Bigger the better, 188 Big markets, xiv Bigness, 202 Big powers, 211 Bihar, 168 Bilateral, 161 Bilateral foreign aid agency, 158 Bilateral Investment Promotion and Protection Agreement (BIPPA), 206 Bilateral meeting, 141 Bilateral military agreement, 133 Bilateral trade, 73 Billion dollars, 213 Binding, 13 Bipolar, 142 Birendra, 38 Birgunj border, 112 Bista, Kriti Nidhi, 54 Blockade, 47 Bloc politics, 14 Boao Forum, 89 Board of Directors, 158 Bobbit, Philip, xii Border dispute, 74 Bordering towns, 107 Border patrol, 81 Border problems, 20, 134 Border security, 84 Border skirmishes, 20 Border towns, 251 Bouddhanath Stupa, 33 Boulders, 183 Boundary Protocols, 245 Boundary Treaty, 245 Boxing Uprising, 35 Branding, 139, 185 Bretton Wood institutions, 198 Brexit, 9, 214

264

INDEX

Bridge, 70 Bridge discourse, 93 Bridge metaphor, 251 Bridges, 90 BRI projects, 74 BRI railways, 87 Britain, 2 British army, 15 British Empire, 188 British expedition against Tibet, 35 British India, 17 Budi Gandaki, 167 Buffer, 93 Buffer state, 18 Build Back Better World (B3W), 151 Burden, 70 Bureaucratic institutions, xiv Bureaucratization, 198 Burma, 14 Bush, George W., 7 Business community, 116

C Caesar, Julius, 188 Calcutta, 60 Calcutta port, 38 Camaraderie, 224 Cambodia, ix Canada, 187 Capital, 166 Capitalism, 150 Carbon emissions, 237 Caribbean, xi Carpet industries, 84 Cartographical manipulation, 72 Cartographic assertion, 72 Caste-based violence, 99 Centennial Goals, 248 Central Intelligence Agency (CIA), 81 Centuries, 152 Ceylon, 14

Ch’ing Court, 32 Chairman Mao, 69, 182 Chakravartin, 220 Cheap goods, 174 Chengdu, 236 Chennai Connect, 152 Chen-Yi, Marshal, 53 Chess, 75 Chessboard, 217 Chiang Kai-Shek, 34 Child health, 158 China’s emperor, 97 China connection, 47 China Gezhouba Group Corporation (CGGC), 167 China International Development Cooperation Agency (CIDCA), 120 China-Mongolia-Russia, 171 China-Myanmar Economic Corridor (CMEC), 174 China-Pakistan Economic Corridor, 152 China scare, 44 Chinese activities, 12 Chinese aggression, 24 Chinese aid, 70 Chinese Ambassador, 154 Chinese army, 97 Chinese borders, 38 Chinese Communist Party (CCP), 24 Chinese Dream, 248 Chinese Embassy, 47 Chinese empire, 79 Chinese encroachment, 233 Chinese goods, 94, 118 Chinese grant, 87 Chinese investment, 70 Chinese lending, xi Chinese military, 81 Chinese mind, 70 Chinese motives, x

INDEX

Chinese people, 70 Chinese port, 162 Chinese power, 107 Chinese pressures, xii Chinese products, 118 Chinese provinces, 98 Chinese representative, 80 Chinese Revolution, 33 Chinese sea, 61 Chinese state, 70 Chinese takeover, 125 Chinese takeover of Tibet, 22 Chinese train, 118 Chiniya (Chinese)Lama, 33 Chittagong, 234 Chittagong port, 126 Citizenship, 84 Civilization, 239 Civilizational entities, 24 Civilizational philosophy, xvi, 211 Civilizational ties, 70 Civilizations, xiv Civil liberties, 158 Civil Service Hospital, 121 Claim to neutrality, xii Classical, 183 Climate change, 214 Climbers, 216 Coalition government, 165 Coalition partner, 156 Coercion, 114 Coercive, 247 Coercive actions, 59 Coercive approaches, 47 Coercive foreign policies, xvi Coercive tactics, 59 Co-existence, 133 Cold War, 5 Cold War bipolarity, 6 Cold war survival strategies, 105 Collective security, 6 Colombo, 215

265

Colonial armies, 15 Colonial construct, 19 Colonial doctrine, 41 Colonial hangover, 34 Colonial imprint, 46 Colonialism, 2, 251 Colonializing, 188 Colonial legacy, 37 Colonial narrative, 23 Colorado, 81 Colossal neighborhood, xiv Columbia University, 141 Commerce, 184 Commercial transactions, 123 Commodification, 92 Common defense, 44 Common Security and Defense Policy (CSDP), 10 Common security interest, 52 Communal violence, 99 Communication, 161 Communication skills, 119 Communism, 150 Communist China, 22, 88 Communist parties, 15 Communist Party of China, 21 Communist regimes, 81 Compact, 157 Composite Indicator of National Capability (CINC), 186 Conceptual clarity, 133 Conceptual dilemma, 135 Conceptual divergence, xiii CONCOR, 169 Conditionality, 123 Confidential, 241 Conflict, 10 Conflict-bound situations, 11 Conflicting interests, xiii Conflict-porn regions, ix Congress of Vienna, 132 Connectivity, 6

266

INDEX

Connectivity-driven development strategy, 116 Conquering, 188 Conquesting, 188 Consensus, 205 Conservatism, 10 Constitutionally, 249 Constitutional provisions, 110 Constitution of Nepal, 13 Consulate-General, 80 Consumer goods, 203 Containment program, 123 Contemporary, 183 Contemporary requirement, 142 Contending powers, 19, 198 Contentious issues, 22, 50 Contracting party, 45 Convention on Transit and Trade, 114 Conventions, 111 Coping, 250 Coping strategy, 5, 98 Coronation, 56 Correlation, 200 Corridor development, 69 Cost-benefit analysis, 118 Counterbalance, 49, 73 Countermeasures, 39, 107 Covert motives, 71 COVID-19 pandemic, 86 Cox’s Bazaar, 235 Creativity, 139 Critical infrastructure, 121 Cross-border, 162 Cross-border terrorism, 123 Cross-border trade, 119 Cultural contact, xvi Cultural lens, 211 Cultural Revolution, 212 Cumbersome bureaucracy, 230 Current annual exports, 139 Curzon, Viceroy Lord, 37

Customary international law, 84 Customs, 132 Cyber warfare, 91

D Daam, 76, 231 Dabur, 169 Dahal, Pushpa Kamal, 195 Dalai Lama, 81 Damauli, 159 Danda, 76, 231 David J Ranz, 157 Deb Mukherjee, 228 Debris, 90 Debt-ridden, 69 Debt trap, 159 Debt trap diplomacy, 239 Debt-trap diplomacy, 77 Decolonization, 200 Defacto borders, 236 De facto permanent neutrality, 132 De facto ruler, 18 Defense capabilities, 38 Defense frontier, 46 Defense officials, 61 Defense supplies, 54 Defense ties, 58 Demands, 139 Democracy Summit, 159 Democratic, 60 Democratic India, 22 Democratic movement, 39 Democratization of diplomacy, 49 Demographic, 186 Demonetization, 163 Denmark, 8 Department of Defense (DoD), 154 Department of Survey, 246 Departure, 106 Dependence, 85, 165 Dependency, 38, 111

INDEX

Dependent economy, 110, 130 Detailed Project Report (DPR), 87 Deteriorating, 236 Deterrent, 97 Deuba, Sher Bahadur, 155 Devaluation of neutrality, 10 Devalued, 140 Developmental aid, 123 Development partners, 141 Development planners, 116 Development strategy, 183 Devighat, 168 Dhaka, 215 Dhaka Summit, 193 Dharamshala, 242 Dharma port, 202 Diaspora, 242 Dibhya Upadesh, 17 Dichotomy, 198 Dictators, 238 Dilapidated, 251 Dipayal, 173 Diplomacy, 136, 160 Diplomatic accomplishment, 137 Diplomatic dialogue, 72 Diplomatic invention, 191 Diplomatic note, 20 Diplomatic relations, 36, 158 Diplomatic tightrope, 17 Direct rule, 81 Discourse, 181 Disintegration of Pakistan, 54 Disputed territory, 12, 130 Disputed trijunction, 12 Disputing parties, 13 Dissolution of the parliament, 88 Diversification, 38, 105, 215 Divine council, 17 Dokhlam Crisis, 128 Doklam, 6 Doklam plateau, 240 Domestic laws, 157

267

Domestic sources, xv Dominance, 59 Domination, 96 Driverless cars, 185 Dubai, 240 Duties, 133 Duty-free, 115 Duty-free markets, 139 Dwarfed, 148 Dynamic neutralism, 14

E Earthquake-prone, 90 East Asia, xi Eastern European countries, 92 East Pakistan, 81 East-west highway, 159 Economic aid, 123 Economic ambition, 140 Economic assistance, 142 Economic Assistance Agreement, 49 Economic behavior, 110 Economic blockade, 38 Economic concerns, 88 Economic dependence, 202 Economic dependency, 114 Economic diplomacy, 115 Economic failure, 203 Economic goals, 138 Economic implications, xv Economic institutions, 111 Economic interest, 148 Economic investment, 91 Economic miracle, 93 Economic nationalism, 94 Economic power, 91 Economic powerhouse, 105, 125 Economic prosperity, 21 Economic rise, 62 Economic size, 195 Economic wellbeing, 125

268

INDEX

Ecosystem, 137 Effective communication, 137 Effective mechanism, 136 Effective neutrality, 127 Effective policies, xv Egalitarian, 185 Egypt, 151 Elections, 156 Electricity grids, 173 Elitist responsibility, 48 Emergence of Bangladesh, 54 Emerging economies, 24 Eminent Persons’ Group (EPG), 17 Emperor of China, 17 Enactment, 134 Encroachment, 246 Energy, 158 Energy Exchange Limited (IEX), 168 Enlai, Zhou, 46 Enmity with none, 201 Entrepreneurial state, 111 Environmental challenges, 90 Environmental concerns, 160 Equal friendship with all, 53 Equality, 185 Equal relationship, 79 Equal relations with all the countries, 5 Equi-distance, 20 Equidistance policy, 205 Equilibrium, 9 Ertini Wang, 32 Ethnicity, 165 Eurasia, 171 Eurasian plate, 90 Europe, xi European, 160 European conflict, 7 European integration, 131 European neutrals, 132 European regionalism, 10, 214 European Union (EU), 10

Excessive dependence, 138 Exchange of letters, 39 Expansionism, 152 Expansionist, 233 Expansionist policy, 199 Expansionist state, 106 Exportable goods, 111 Export destination, 139 Exports, 111 External Affairs, 76 External policies, 46 Extractive state, 116 Extra-regional actors, 93

F Failed attempts, 135 Fatema Z Sumar, 155 Feasibility study, 87 Federalism, 165 Fernandes, George, 237 Feudal laws, 34 Fighter jets, 91 Finance Ministry, 158 Finance secretary, 172 Financial aid, 97 Financial assistance, 120 Financial institutions, 85, 166 Finland, 8, 186 First batch, 60 First World war, 7 Fiscal policy, 158 Fiscal year, 120, 218 Five fingers, 37 Five principles of peaceful co-existence, 53 Five-yearly missions, 35 Fixed size, 194 Focal point, 192 Foreign Affairs, ix Foreign aggressor, 39 Foreign direct investment, 164

INDEX

Foreign Direct Investment (FDI), 118 Foreign Employment Board, 204 Foreign interference, 42, 89 Foreign intervation, 48 Foreign policy, 2, 149 Foreign Policy Analysis, xiii Foreign policy approach, 134 Foreign policy behavior, 92, 132 Foreign policy divergence, 135 Foreign policy diversification, 48 Foreign policy experts, xvii, 12, 116 Foreign policy formulation, 134 Foreign policy goals, 141 Foreign policy institutions, xii, 21, 125 Foreign policy objectives, 142 Foreign policy priorities, 10 Foreign policy securitization, 22 Foreign policy think tanks, 134 Foreign secretary, 172 Forum of Small States (FOSS), 194 Founding member, 89 France, 7, 92 Fraternal relations, 185 Freedom, 158 Free-market economy, 109, 132 Free Tibet, 242 Free trade, 109 Freight trains, 162 French Revolution, 11 French Revolutionary wars, 7 Fretful, 237 Friendly relations, 127 Frontier defense arrangement, 97 Fukuyama, Francis, 185 Functional manner, xvi Functional state, 109 Funding, 162 Funding modality, 87 Future of reciprocity, 214 Future of the international relations, 214

269

G Gabriel, Jurg Martin, 132 Galchhi, 159 Galchhi-Rasuwagadhi-Kerung, 173 Galwan valley, 72 Game-changer project, 119 Gandak Treaty, 168 Gandhi, Indira, 47, 224 Gandhi, Rajiv, 47, 224 Ganesh Man Pun, 114 Gansu Province, 119 Garment, 139 Gender, 158 General Administration Customs (GAC), 148 General Agreement on Trade and Services, 114 Generalized System of Preference, 140 General perception, 79 General public, 109 Geo-civilizational paradigm, 211 Geo-economic, 85 Geo-engineering, 219 Geo-engineering challenges, 90, 251 Geographical impediments, 99, 116 Geographical location, 91 Geographical space, 91 Geography, 148 Geography hypothesis, 98 Geological fault line, 90 Geological problems, 90 Geopolitical ambition, 59, 136 Geopolitical archrivals, 22 Geopolitical benefits, 20 Geopolitical chessboard, 123 Geopolitical clutches, 217 Geopolitical competition, 40, 91 Geopolitical competitor, 90 Geopolitical complexities, 99 Geopolitical confinement, 250 Geopolitical contestation, xvii, 94 Geopolitical dilemma, 162

270

INDEX

Geopolitical disputes, 92 Geopolitical dominance, 91 Geopolitical impediments, 70 Geopolitical move, 139 Geopolitical opportunities, 5 Geopolitical reality, 92 Geopolitical relevance, 91 Geopolitical rivalry, 11 Geopolitical scrutiny, 94 Geopolitical setting, 46 Geopolitical tensions, 92 Geopolitical threats, 92 Geopolitical traps, 40 Geopolitical value, 121 Geopolitical vulnerabilities, 91 Geopolitical weapon, 118 Geopolitical worldview, 141 Geopolitics, 91 George, V., 188 Geospatial Intelligence, 152 Geostrategic location, 20 Geostrategic milieu, 141 Germany, 92 Gigantic neighborhood, 20, 109, 185 Giri, Tulsi, 57 Global affairs, 9 Global changes, 131 Global concerns, xi Globalism, 22, 105 Globalist approach, 108 Globalist attitude, 22 Globalization, 109 Globalized world, 14, 106 Global peace, 186 Global politics, 9 Global power ambitions, 93 Global Times , 165 Global value chain, 115 GMR India, 169 Goodwill, 124 Gorkha, 189 Gorkhali, 189

Governing Law, 157 Government of India, 44 Government of Nepal, 44 Government-to-government interaction, 48 Grant, 158 Grassroots level, 121 Great Britain, 7 Great Game, 18 Great power ambitions, xvi Great power competition, 23 Great power rivalry, 130 Great powers, 7, 106, 160 Green vegetables, 118 Gross Domestic Product (GDP), 186 Group of Seven(G7), 157 Growth, 124 Growth-driven development, 74 Guangzhou, 218 Guerrilla warfare, 81 Gujal, 224 Gujarat, 202 Gujral Doctrine, 31, 47 Gujral, Inder Kumar, 47 Gulliverian, 183 Gulliverian neighborhood, 6, 108 Gurkha, 189 Gurkha pensioners, 17 Gurkha recruitment, 15 Gurkha regiments, 16 Gurkha soldiers, 15 Gyawali, Pradeep, 87

H Hague Conventions of 1907, 8, 131 Haiti, 185 Haldia port, 202 Hambantota, 234 Hambantota port, 77, 224 Hamiltonian worldview, 7 Hans-Adam II, 185

INDEX

Hastings, Lord, 97 Hawkish strategy, 107 Health, 158 Hedging, 3, 96, 250 Hegemonic posture, 59 Hegemonistic posture, 50 Hegemony, 59, 222 Hiding, 11 High crime rate, 99 High-level visits, 6 High risk, 109 High-speed rails, 173 Hijack, 55 Himalayan belt, 70 Himalayan borders, 19 Himalayan country, 74 Himalayan frontiers, 37 Himalayan frontier theory, 31 Himalayan geography, 119 Himalayan geopolitics, 42, 86 Himalayan passages, 70 Himalayan roads, 62 Himalayan state, ix Hindustan Unilever, 169 Historical affinity, 85 Historical consciousness, 97 Historical experience, 55 Historical palace, 122 Hitler, Adolf, 188 Hobbesian, 231 Holy destinations, 216 Homogeneity, 237 Hong Kong, 140 Hostile neighbors, 53 Hostilities, 79 Hotspot, 235 Household, 203 Hou Yanqi, 89 Human development index, 99, 182 Human happiness, 109 Human insecurity, 204 Humanitarian aid, 123

271

Humanitarian crisis, 114 Humanitarianism, 11 Humanitarian support, 170 Human mobility, 109 Human rights activists, 84 Human rights regimes, 85 Human security, 99, 204 Humla, 244 Hungarian issue, 49 Hyderabad, 41 Hydrology, 90 Hydropower, 166

I Idealism, 49 Idealistic prescription, xiv Idealistic standpoint, 48 Ideological mooring, 220 Ideology, 249 Illegal immigrants, 84 Image, xiii IMF, 159 Imperial Dynastic Chronicles, 35 Imperialism, 251 Imperialists, 81 Import of weapons, 44 Imports, 111 Impractical, 247 Impressive economy, xiv Improving trade competitiveness, 115 Inclusive institutions, xv Increased imports, 140 Independent foreign policy, ix, 48 Independent India, 106 Inderjeet Singh, Dr. Kunwar, 50 India’s backyard, 59, 118 India’s foreign policy, 46 India’s Nepal policy", 47 India’s periphery, 240 India’s rivals, 57 India’s wars, 17

272

INDEX

India-China border war, 20 India-China friendship, 50 Indian aid, 123 Indian blockade, 89 Indian borders, 61 Indian bureaucracy, 227 Indian Cooperation Mission, 56 Indian counterpart, 141 Indian Culture Mission, 56 Indian External Affairs Minister, 74 Indian firms, 169 Indian freedom fighters, 60 Indian hegemony, 222 Indian independence movement, 62 Indian influence, 5 Indian influence in Nepal, 20 Indian interest, 48 Indian military mission, 5 Indian mission, 80 Indian Ocean, 92 Indian parliament, 31 Indian people, 70 Indian pilgrims, 74 Indian ports, 110 Indian security interest, 51 Indian security umbrella, 70 Indian soldiers, 24 Indian sphere of influence, 85 Indian states, 70, 98 Indian Union, 47, 50 India-Pakistan war, 39 Individual abstention, 8 Indo-centric approach, 22 Indoctrination, 249 Indonesia, 14 Indo-Pacific Strategy (IPS), 151 Indo-Pakistan war, 126 Indo-Pak rapprochement, 192 Industrial capacity, 91 Indus Waters Treaty, 236 Infant Republic, 88 Infant state, 97

Inflation, 158 Influence, xiv Information technology, 109 Infrastructural development, 99 Infrastructure, 155 Infrastructure deficiency, 122 Infrastructure grant, 98 Infrastructure-impelled prosperity, 74 Ingenious, 185 Inheritance, 201 Innovation, 136, 139 Institute of Foreign Affairs, 134 Institute of Nepal and Asian Studies, 134 Institute of Nepal Studies, 134 Institutional capabilities, 116 Institutional constraint, 112 Institutional deficiency, 112, 115 Integrated foreign policy, 136 Integration, 240 Integration of Sikkim, 47 Integrity, 116 Interdependence, 91, 225 Interests, 165 Internal issues, 141 Internal make-up, xiv Internal politics, 89 Internal sources, xiv International communism, 81 International community, 13, 15 International conflicts, 11 International Covenants on Civil and Political Rights (ICCPR), 84 Internationalism, 11 Internationalize, 114 International law, 11, 157 International market, 111 International responsibility, 50 International system, 9, 186 International trade, 184 Interventionist, 233 Interventionist policies, 59, 222

INDEX

Intraparty rift, 88, 164 Inundation, 202 Invasion, 97 Investment, 22, 161 Inviolability, 106, 131 Iran, 14 Iraq, 151 Ireland, 8 Irresponsible, 249 Irrigation, 158 Islamabad, 213, 235 Isolation, 108 Isolationism, 10 Isolationist policy, 22, 199 Israel, 151, 190 J Jaishankar, S., 191 Jakarta, 195 Jamaica, 194 Jammu and Kashmir, 92 Janata Samajbadi Party, 156 Japan, 187 J.B. Rana, Mohan Shumshere, 39 JeM, 238 Jerusalem, 13 Jiabao, Wen, 74, 226 Johnson, Lyndon B., 60 Joint Communique, 52 Joint security interests, 52 K Kailash Mansarovar, 130 Kalapani, 12 Karachi, 235 Kargil war, 129 Karki, Gyanendra, 127, 165 Karnaphuli River, 235 Kashmir, 152 Kashmir issue, 50 Kathmandu, 12

273

Kathmandu-Kerung railways, 87 Kathmandu-Kodari road, 53 Kathmandu-Lhasa road, 47 Kathmandu-Rasuwagadhi railway, 94 Kathmandu Ring Road, 121 Kautilya, 47, 76 Kennedy administration, 82 Keohane, R., 187 Kerung, 32 Khampa, 216 Khampa fighters, 23 Khanal, Jhalanath, 175 Khan, Ayub, 82 Kimathanka-Hile, 173 King George III, 33 King Tribhuvan, 3 Kinship ties, 99 Kipling, Rudyard, 216 Kissinger, Henry, 75 Knowledge-based approach, 115 Kocha River, 235 Kodari, 171 Kodari Highway, 38 Koirala, B.P., 5 Kolkota port, 119 Koshi, 159 Kung, 32 K. V. Rajan, 228

L Labor demand, 203 Labor destination, 203 Labor diplomacy, 136 Labor migrants, 204 Labor migration, 204 Lack of policy continuity, 137 Ladakh, 37 Land connectivity, 112 Land-linked, 86 Landlocked, 21 Landlocked Nepal, 53

274

INDEX

Land ports, 162 Landslides, 90 Langtang, 90 Lanzhou, 114, 119, 162 Lapsiphedi, 159 Large population, xiv Largest democracy, 88 Latin America, xi Leaderships, 160 League of Nations, 8 Least Developed Countries (LDCs), 139, 194 Lebanon, 185 Leftist parties, 205 Legalism, 10 Legal neutrality, 3 Legislation, 158 Lesotho, 194 Lethal clash, 130 Levy, 187 Lhasa, 162 Lianyungang, 114, 162 Liberal democracies, 98 Liberal institutionalism, 109 Liberal values, 132 Liechtenstein, 185 Light arms, 58 Li Jiming, 236 Li Keqiang, 173 Lilliputian confidence, 13 Lilliputian dilemma, 13, 114, 192 Limited engagement, 58 Limpiyadhura, 61 Line of Actual Control (LAC), 130 Lines of credit, 121 Linguistic barrier, 70 Linguistic freedom, 242 Linguistic ties, 99 Lipulekh, 226 Lipulekh pass, 12 List of goods, 120 Literature, x

Livestock, 246 Loans, 123 Lobbying, 165 Lobbyists, 108 Logistics, 240 Long-term strategy, 75 Lord Macarteny’s mission, 33 Lord Montgomery, 36 Low-income, 158 Lu, Donald, 176 Luxembourg, 194

M Macedonia, 120 Machiavelli, 231 Machiavellian leaderships, 214 Madan Bhandari Technical Institute, 173 Madan Bhandari University, 173 Madhav Nepal, 155 Madhesh-based, 60, 99 Madhesi agitation, 99 Madhesi communities, 99 Mahabharat , 216 Mahara, Krishna Bahadur, 155 Mahendra’s direct rule, 15 Maithripala, 234 Maithripala Sirisena, 221 Majithia, Surjit Singh, 3 Major power contestation, 11 Major powers, 153 Major wars, 9 Malaysia, 203 Maldives, 87, 194 Mamuli Saugat, 35 Managerial market state, 111 Managerial state, 111 Manjeev Singh Puri, 228 Manjushree, 77 Mansarovar, 226 Mansarovar route, 36

INDEX

Manufactured goods, 114 Manufacturing, 139 Maoist rebels, 15 Mao Tse-Tung, 35, 46 Maritime border, 228 Maritime security, 191 Maritime Silk Road (MSR), 234 Maritime South Asia, 94 Marketing, 139 Market state, 105 Mass-based, 116 Maurice East, 198 May, Theresa, 16 Mechi, 159 Media persons, 61 Mediation, 9 Mediation efforts, 9 Medical supplies, 82 Mega infrastructure, 59 Memorandum of Understanding (MoU), 163 Mercantile state, 110, 111 Mercenary, xi Merchantable, xiv Merchant community, 80 Merger, 237 Micromanagement, 59 Middle East, 203 Middle-income, 138 Middle kingdom, 70 Middle powers, 186 Militant posture, 53 Militaristic, 183 Military, 152 Military aid, 38, 123 Military alliance, 39 Military bases, 132 Military capability, xvi Military expeditions, 39 Military gear, 82 Military information, 45 Military liability, 107

275

Military Liaison group, 54 Military missions, 12 Military neutrality, 8 Military non-alignment, 8 Military operations, 82 Military pacts, 14 Military preparations, 72 Military standoff, 12 Military support, 131 Millennium Challenge Corporation (MCC), 23 Ministerial meeting, 129 Ministry of Foreign Affairs, 172 Miscellaneous strategies, 130 Missionaries, 216 M. K. Rasgotra, 228 MNCs, 108 Modern, 183 Modern weapons, 44 Modern worldview, 91 Modi administration, 23 Modi, Narendra, 59 Mohan, C. Raja, 191 Monarchy, 47 Mongolia, 197 Monitoring, 172 Monopoly, 166 Moragahakanda, 239 Morgenthau, Han, xii, 135 Mt. Everest, 52, 206 Multidimensional connectivity, 88 Multilateral entities, 85 Multilateral investment bank, 118 Multilateralism, 11 Multilateral military alliance, 133 Multilateral trade negotiations, 214 Multiparty democracy, 218 Multiple challenges, 116 Multipolar world, 7, 124 Multi-Sectoral Technical and Economic Cooperation, 220 Mundra port, 202

276

INDEX

Mustang, 82 Mustang Samaj Monastery, 84 Mutual consultation, 107 Mutual interest, 221 Mutual neutralization, 96 Mutual security, 107 Mutual understanding, 53 Myanmar-Bangladesh corridor, 171 Myrdal, Karl Gunnar, 212, 219

N Nairobi, 114 Namibia, 194 NAM summit, 55 Napoleon, 188 Napoleonic wars, 7, 11 Naravane, M.M., 61 Nathu La, 71 National behavior, 8 National interest, 81 National Investigation Department, 246 Nationalism, 91, 188 Nationalist, 60 Nationalist forces, 156 Nationalist Government of China, 34 National power capabilities, xv, 55 National Railway Authority of China, 87 National security, 16, 204, 222 National security exercise, 18 National security policy, 136 National Security Strategic Guidance, 150 National Security Strategy Report, 150 Nation branding, xiii Natural disasters, 123 Natural resources, 158 Nehru, Jawaharlal, 4, 224 Neighborhood, 149

Neighborhood first, 220 Neighborhood policies, 22 Neighbors, 47 Neighbourhood First Policy, 31 Neither of two, 131 Neo-Kautilayan approach, 59 Neo-Kautiliyan, 76, 224 Neo-liberal, 218 Neoliberalism, 111 Neo-Realism, 231 Nepal, 233 Nepal’s national interest, xii Nepal’s claim to neutrality, 5 Nepal’s diversification policy, 50 Nepal’s foreign policy, xv Nepal’s geographical location, 19 Nepal’s image, 134 Nepal’s India policy, 55 Nepal’s neutrality conundrum, xii Nepal Communist Party, 156 Nepal Council of World Affairs, 134 Nepal Electricity Authority (NEA), 168 Nepalese Army, 44 Nepali Congress, 45 Nepali folks, 71 Nepali geopolitics, 95 Nepali mountains, xi Nepal-India ties, 70 Nepal Investment Summit, 169 Nepali politics, 204 Nepali psyche, 79 Nepali society, 79 Nepal policies, 47 Nepal Rastra Bank, 163 Nepal State Bank, 55 Nepal-Tibet war of 1788, 32 Netherlands, the, 8, 187 Net-zero emission, 90 Neuter, 131 Neutrality, 1, 207 Neutrality strategy, xiii

INDEX

Neutralization, 2, 8, 38, 45 Neutralization policy, 107 Neutral position, 7 Neutral rights, 133 Neutral separator, 9 Neutral stance, 7 Neutral state, 8 Neutral status, 106 New channels, 161 New China scare, 61 New constitution, 88 New Delhi, 5, 12 New grand strategy, 118 New map, 12 New map row, 20 New vistas, 135 Next-door neighbor, 125 1949 security pact, 12 1950 treaty, 4 1962 Sino-Indian war, 19 Nixon, 127 Non-aligned status, 133 Non-alignment, 8 Non-alignment Movement (NAM), 6 Non-allied, 8 Non-belligerency, 8 Non-competitive, 111 Non-conventional security threats, 109 Non-governmental institutions, 134 Non-interference, 89 Non-intervention, 55 Non-involvement, 131 Non-neutral history, 2 Non-neutral state, ix Non-participation in conflict, 11 Non-refoulement, 84, 242 Non-state actors, 108 Non-tariff barriers, 163 Nordic balance, 9 Norocholai Power Station, 239 North Asia, 161

277

North Atlantic Treaty Organization (NATO), 10 North-East Frontier Agency(NEFA), 37 Northern borders, 38, 45, 120 Northern frontiers, 12, 125 Northern neighbor, 139 Northern security system, 40 Norway, 8 Nuclear explosion, 55 Nuclear powers, 12, 74, 212 O Oath-taking ceremony, 59 Obligation, 133 Odisha, 202 Official Development Assistance (ODA), 169 Oli administration, 138 Oli, K.P., 16 One China, 74 One-party rule, 224 Open borders, 148 Opening up program, 69 Openness, 200 Opposition, 156 Optical fibers, 161 Outside interference, 55 Overt behavior, 70, 71 P Pakistan, 14 Pakistan-like relationship, 58 Pakistan-Nepali Collaboration Treaty, 126 Palace, 81 Panchayat regime, 55 Panchayat system, 56 Panchsheel , 52 Pandemic, 148, 212 Panikkar, K.M., 46

278

INDEX

Paradigm shift, 62 Parliament, 154 Party links, 156 Patel, Sardar Vallabhbhai, 18 Payra Power Plant, 235 Peaceful international system, 14 Peaceful neighborhood, 47 Peaceful resolution of conflicts, 8 Peaceful settlement of disputes, 126 Peace Keeping, 184 Peacekeeping missions, ix Peace process, 81 Peacetime alliance, 132 Peace treaty of 1792, 34 Pegged currency, 203 Peking Court, 34 Peninsula, 171 Penpa Tsering, 242 People’s Republic of China, 46 People-driven, 116 People-to-people relations, 148 Per capita expense, 188 Perception, xi Perceptual size, 195 Perennially stick, 227 Periphery, 233 Permanent neutrality, 132 Perpetual tensions, 216 Personal ties, 62 Petroleum pipelines, 161 Philippines, the, 14 Phukot Karnali, 173 Physical infrastructure, 165 Pilgrimage, 216 Pilgrimage route, 71 Pillars, 245 Pithoragarh, 37, 226 Pivot to Asia Policy, 151 Plateau, 78 Pokhara, 166 Pokhara International Regional Airport, 121

Pokharel, Ishwor, 155 Pokhran, 56 Policies of engagement, 96 Policy and practice, 11 Policy choices, xv Policy coordination, 89 Policy failure, xiii Policy indicators, 158 Policymakers, 38, 59 Policy of appeasement, 18, 22, 57 Policy of diversification, 6 Policy option, 45 Policy orientations, 49 Policy priorities, 105 Policy research, 134 Political affairs, 164 Political calculation, 220 Political challenge, 88 Political change, 86 Political climate, 164 Political clout, 140 Political community, 52 Political corruption, 122 Political crisis, 127 Political debacle, 88 Political demeanors, 110 Political development, 89 Political dimension, 132 Political doctrine, 247 Political fiasco, xiii, 87 Political independence, 9 Political influence, 99 Political insights, 116 Political interests, 110 Political motive, 84 Political neutrality, 3 Political parties, 162 Political proximity, 89 Political realism, 49, 225 Political realities, 46 Political regime, 23 Political rhetoric, 100

INDEX

Political rights, 158 Political ritual, 60 Political size, 195 Political socialization, 60 Political spectrum, 59, 78 Political stability, 107 Political transition, 88 Political uncertainties, 88 Political uncertainty, 86 Political vacuum, 4 Political will, 115 Political willpower, 112 Politicization, 156 Polysemantic, 126 Popular myths, 127 Populism, 91 Populous countries, 111 Porous borderlands, 94 Ports, 61 Post-Cold war period, 10 Post-colonial, 37 Post-earthquake reconstruction, 71 Posture and policies, 14 Potential enemy, 237 Potential threat, 79 Poverty, 99 Poverty Alleviation, 197 Poverty gap, 122 Powell, Colin, 123 Power, 111, 158 Power elites, 12, 22 Powerful leaders, 156 Power of geography, 36 Power relations, 157 Power struggle, 156 Power vacuum, 165 Prachanda, 155 Practitioners, xvii Pragmatic, 135 Prasad, Rajendra, 49 Preeminence, 127 Pre-feasibility report, 90

279

Preference size, 195 Press statement, 149 Primary education system, 137 Primary supplier of arms, 54 Prime ministers, 99 Princely states, 18 Prince Sihanouk, 106 Principal barrier, 31 Principle of abstention, 131 Prisoner of geography, 36 Prisoners of War (PoW), 15 Proactive foreign policy, 221 Pro-BJP, 249 Pro-Chinese, 20 Procrastinations, 142 Pro Indian government, 19 Promulgated constitution, 228 Prosperity, 74 Protest Note, 56 Protocol, 41 Protracted contestation, 124 Protracted transitional period, 88 Pro-western, 156 Proximity, 108 Public orientation, 183 Punjab National Bank, 169

Q Qamdo, 236 Qiangla, 71 Qing Empire, 96 Qinghai-Tibet railways, 72 Quadrilateral Dialogue (QUAD), 72, 214 Quality healthcare, 137 Quid-pro-quo, 212 Quid-pro-quo conditions, 22 Quid-pro-quo situation, 71 Quinquennial missions, 32

280

INDEX

R Rahman, Sheik Mujibur, 106 Rahman, Ziaur, 237 Rail-and-road, 119 Railway projects, 20 Railways, 161 Rajapaksa, 221 Raj Mandala, 232 Rakesh Sood, 228 Rana, Jung Bahadur, 18, 32 Rana regime, 42 Ranas, 3 Ranjit Rae, 228 Rapprochement, 89, 239 Rasuwa, 251 Raxaul, 171 Realpolitik worldview, 48 Reciprocity, 48 Reconceptualization, 185 Reconstruction projects, 121 Reconstruction site, 122 Recruitment, 129 Redistributor, 109 Refugee convention, 84 Refugee problem, 127 Refugees, 84 Regime, 165 Regional balance, 107 Regional balance of power, 53 Regional Comprehensive Economic Partnership, 151 Regional economic affairs, 111 Regional entity, 129 Regional harmony, 85, 244 Regional integration, 9 Regional order, xv Regional organizations, 113 Regional peace, 49 Regional port, 119 Regional powers, 7, 114 Regional security dynamics, 55 Regional security environment, 8, 13

Reiterates, 247 Rejuvenation of SAARC, 59 Reliability, xv Remittance, 111, 203 Renegotiation, 136 Republican Nepal, 97 Republic of China, 46 Research and publication, 134 Research centers, 134 Research institutions, x Responsibility, 59 Result-oriented strategies, xv Resurgence, 108 Revenge of geography, 22 Revenue, 111 Revisionist power, 150 Revitalizing SAARC, 129 Rio+20 Conference, 78 Rise, 249 Rise of China, 6 Rise with responsibility, 250 Rival countries, 19 Rival powers, 124 Road to Mansarovar, 20 Road transport, 119 Roadways, 161 Rockfall, 90 Roof of the world, 80 Rothstein, R.L., 187 Roti-Beti, 148 Royal banquet, 50 Royal Nepal Airlines plane, 55 Royal Nepal Army, 54 Royal regime, 165 Rule-based world order, 11 Rule of law, 200 Ruling coalition, 156 Ruling communist party, 88 Rural roads, 121 Russia, 237

INDEX

S Saaam, 231 Saam, 76 Safe passage, 115 Sagarmatha, 159 Salability, 181 Sanitation, 158 Santiniketan, 211 Sapkota, Agni Prasad, 155 Saudi Arabia, 151 Scientific institutions, xii Sea, 116 Seaports, 162 Second-highest, 218 Secret Arms Assistance Agreement, 44 Securitization, 3, 225 Securitization of India’s foreign policy, 31 Security analysts, 12, 61 Security and growth for the entire region’ (SAGAR), 93 Security competition, x Security concerns, 37, 54 Security dilemmas, 136 Security needs, 97 Security partnerships, 157 Security perceptions, 57 Security threat, 23 Self-destructive, 78 Self-determination, 126 Self-help, 12 Self-reliant, 138 Semi-skilled, 203 Senate, 150 Sepoy Mutiny, 18 Seti Hydro Project, 168 Seychelles, 194 Shah, Bahadur, 97 Shahi, Jeevan Bahadur, 244 Shah, Mahendra Bikram, 5 Shah, Prithivi Narayan, 17, 96 Shah, Rana Bahadur, 32

Shamsher, Bhim, 34 Shamsher, Bir, 32 Shamsher, Chandra, 32 Shanghai, 218 Shanghai Expo, 206 Shared prosperity, 225 Sharif, Nawaz, 192 Shenzhen, 114, 162 Sherpa autonomous province, 206 Shigatse, 162, 236 Shijie Datong, xvii, 212 Shipka La, 71 Shipment cost, 119 Shipping, 240 Shivapuri, 90 Short-term gains, 75 Shyam Sharan, 228 Sichuan, 236 Siddhartha Highway, 171 Sikkim, 37, 216 Sikkim’s merger, 55 Sikkim episode, 127 Silicon Valley, 137 Silk Road, 92 Singapore, 137, 186 Singh, Chandreshwar Prasad, 3 Singh, Jaswant, 74 Singh, Rajnath, 227 Singh, Ranaudip, 32 Sinicization, 79 Sino-Indian competition, 107 Sino-Indian interactions, 69, 214 Sino-Indian rivalry, 5 Sino-India standoffs, 3 Sino-India war, 39 Sino-Pak, 252 Size, 135 Skilled, 203 Skirmishes, 3 Slope stability, 90 Small countries, 1, 9

281

282

INDEX

Small Development Projects (SDPs), 121 Small economy, xvi Small market, 174 Small neighboring countries, 51 Smallness, 183 Small power capabilities, xv Small powers, xiii, 186 Small size, 130 Small states, 7 Small state syndrome, 12 Soaltee, 105 Soap operas, 241 Socialism, 111 Socialist country, 248 Socialization, 153, 183 Social systems, 133 Socio-cultural ties, 99 Socio-economic progress, 99 Soft loans, 172 Soft power, 120 Sonadia port, 232 Sources of small power, xiv South Asia, xi, 2, 19 South Asian ambition, 87 South Asian Association for Regional Cooperation (SAARC), 10 South Asian countries, 59 South Asian market, xvi Southern plains of Nepal, 99 Southern region, 120 South Korea, 203 Sovereign equality, xiv Sovereignty, 9 Sovereignty erosion, 89 Sovereignty size, 195 Soviet Union, 187 Special relations, 19 Special treatment, 139 Specific policies, 137 Spectacular rise, 96 Speeches, 134

Sphere of influence, 58, 206, 235 Spillover effects, 21, 98 Spirit of neutrality, xvi Spiritual sympathy, 211 Sri Lanka, 159 Stagnation, 212 Stakeholders, 172 Standing Committee, 239 State Bank of India, 169 Statecraft, 17 State sovereignty, 87 Stockholm International Peace Research Institute (SIPRI), 213 Strategic advantage., 53 Strategic alliances, 157 Strategically placed country, 106 Strategic ambitions, 73 Strategic autonomy, 1, 35, 56, 108 Strategic choices, 124 Strategic competition, 109 Strategic concern, 43 Strategic decisiveness, 49 Strategic encirclement, 75 Strategic environment, 109 Strategic flexibility, 79 Strategic fronts, 125 Strategic gateway, 19, 58 Strategic geography, 97 Strategic hedging, 96 Strategic implications, 91 Strategic interests, 88 Strategic space, 24, 96 Strategic value, 124 Strategies, 135 Strategist thinker, 47 Strategy of sustenance, 108 String of pearls, 174 Strings, 123 Strong economy, 110 Structural constraints, 96 Structural deficiencies, xv Structural engineering, 90

INDEX

Subcontinent, 55, 127 Subedi, Ram Krishna, 243 Submarines, 91 Sub-regional forums, xii Sub-Saharan, 152 Subsidies, 184 Sub-systemic anarchy, 19 Successful, 135 Sugauli Treaty, 18 Summer Olympic, 206 Sunauli, 171 Sunawal, 159 Superpowers, 86 Supplies, 114 Supremacy, 249 Survival, 105 Survival strategy, 1, 5, 105 Surya Nepal, 169 Sustenance, 105 Sustenance strategy, 105, 116 Suzerain power, 32 Swaraj, 184 Sweden, 8, 175 Swiss, 243 Swiss Doctrine, 10 Swiss lines, 133 Swiss-type neutrality, 106 Switzerland, 8 Switzerland of Asia, 106 Syaprubensi- Rasuwagadhi, 121 Syndrome, 194 Systemic buffer system, 108 Systemic imperative, xii

T Tagore, Rabindranath, 211 Taifo Zhing, 33 Taiwan, 120 Tamakoshi, 168 Tamor hydroelectricity project, 173 Tariffs, 114

283

Tatopani, 251 Technical assistance, 115 Technical support, 172 Tectonics, 90 Telecom, 169 Tensions, 10 Terminals, 239 Terrain, 90, 162 Territorial conflict, xiii, 19 Territorial integrity, 48 Territory, 194 Territory of India, 44 Terrorism, 123 Terrorist groups, 205 Thailand, 14 Thimphu, 19, 70 Thinley, Jigme, 226 Third countries, 140 Thong-Lin-Pimma-Kokang-WangSyan, 32 Thorhallsson, B., 194 Threat perceptions, 214 Threshold program, 156 Thucydides Trap, 187 Tianjin, 114, 162 Tibet, 2 Tibetan Autonomous Region (TAR), 70 Tibetan cities, 110 Tibetan Community, 82 Tibetan Government in Exile, 142 Tibetan insurgents, 82 Tibetan Policy and Support Act, 82 Tibetan questions, 52 Tibetan reactionaries, 81 Tibetan Refugee Welfare Office, 84 Tibetan resistance, 81 Tista, 189 Tit-for-tat, 214 Tokha-Bidur, 173 Topographic difficulties, 90

284

INDEX

Topography, 90 Total export, 120 Total imports, 138 Total victory, 75 Tourism, 161 Tourist arrivals, 118 Track II diplomacy, 136 Trade and Transit Agreement, 162 Trade and transit treaty, 47 Trade barriers, 251 Trade corridors, 108 Trade deficit, 111 Trade diversification, 20 Trade Facilitation Agreement (TFA), 115 Trade infrastructure, 115 Trade regimes, 114 Trade relations, 49 Trade routes, 174 Trading partner, 148 Trading points, 71 Traditional customary line, 52 Traffic congestion, 251 Train service, 162 Transformational, 226 Transforming economies, 115 Trans-Himalayan Multidimensional Connectivity Network, 94 Trans-Himalayan railways, 47, 75 Trans-Himalayan trade, 32, 126 Transit and Transportation Agreement, 165 Transit diplomacy, 137, 251 Transit diversification, 115 Transit treaty, 114 Transmission lines, 159 Trans-Pacific Partnership, 151 Transportation, 158 Treaties, 22 Treaty of 1923, 4 Treaty of Peace and Friendship, 4, 47

Treaty of Trade and Transit of 1950, 49 Treaty provisions, 43 Tribhuvan Rajpath, 159 Tri-boundary, 129 Tribute missions, 81 Tributory, 32 Trijunction., 72 Trilateral partnership, 161 Tripartite agreement, 4 Tripartite agreement of 1947, 16 Trishuli, 168 Trisuli valley, 32 Truman, Harry, 123 Trump administration, 13 Trust, 106 Tug-of-war, 164 Tunnels, 90 Turkey, 14 Tuvalu, 194 21st century, 187 Twin objectives, 241 Twin Pillar, 205, 224 2+2 dialogue, 95 2015 earthquakes, 71 Twofold appeasement, 141 Two Plus One, 94 Two-thirds, 141

U UAE, 151 Ulaanbaatar, 197 UN Charter, 11 UN Convention on the Law of the Seas, 114 Underdevelopment, 105 Unequal treaties, 80 Unification, 2 Unification campaign, 96 Unified Socialist, 155 Unilateral, 130

INDEX

Unilateral action, 71 Unilateral commitment, 132 United Arab Republic, 14 United communist party, 89 United Nations, 2, 182 United Nations Conference on Trade and Development (UNCTAD), 115 Unlearning, 181 Unofficial’ blockade, 59 Unofficial blockade, 22 Unremitting patronage, 224 UN Security Council, 198 Unskilled, 203 Unusual delays, xiii Upper Marsyangdi, 168 Upper Trishuli, 121 Uprising, 81 US, 2 US Congress, 158 US dollar, 140 US Embassy, 154 Use of force, 8 U.S.-India strategic partnership, 252 US-Nepal ties, 14 USSR, 150

V Values, 135 Vassal state, 35 Vassal-Suzerainty relationship, 35 Vasudhaiva Kutumbakam, xvii, 212 Vedas , 216 Viaduct, 98 Vibrant bridge, 206 Vicinity, 211 Victorian Britain, 188 Vienna Convention, 158 Violent clash, 61 Virtual meeting, 21 Vishakhapatnam, 61, 119

285

Vishakhapatnam port, 202 Volatility, 165 Vote banks, 156 Vulnerabilities, 115

W Wang Yang, 129 Wang Yi, 87 Warm handshake, 192 War on Terror, 7 War on Terror Campaign, 205 Warring parties, 8 Warsaw Pact, 150 Warships, 91 Washington, 147 Washington, George, 7 Water supply, 158 Waterways, 161 Weak state, 96 Weather, 90 Welfare states, 8 Wenli, Wang, 12 Western countries, 120 Western doners, 54 Western industrialized countries, 89 Western press, 84 Westphalian model, 22 Westphalian states, 109 Whelpton, John, 99 Wikileaks, 241 Wilson, Woodrow, 1, 7 World Bank, 159 World Leaders Forum, 141 World peace, 7, 11 World Trade Organization (WTO), 159 Worldview, 93 World War II, 150, 187 Wuhan Spirit, 152 Wuhan to Chennai, 214

286

INDEX

X Xi’s aggressive strategy, xii Xi Jinping, 38, 140 Xi Jinping thought, 89 Xinjing, 140 Y Yadav, Lalu Prasad, 99 Yam, 17 Yang Tingliang mission, 32

Yanqi, Hou, 155 Yat-Sen, Dr. Sun, 34 Young state, 97 Z Zhanjiang, 114, 162 Zhou, Chen, 155 Zimbabwe, 185 Zone of Peace, 9 Zone of Peace proposal, 1