Over the past one decade, Nepal has striven to transform itself from a traditional buffer state into a new economic corridor—a vibrant bridge—between its two immediate neighbors. Being landlocked is no more a curse. The idea of bridging India and China is logical, given the increasing volume of India-China trade. Both the countries are striving for rapid economic growth even as there are serious differences, including border disputes, between them.
India-China trade is increasing but the mode of transport is lengthy and cumbersome, especially marine transport from the east coast of China to Indian ports. No alternative land trade route has been identified beside the Nathu-La Pass, which too is inconvenient due to its high altitude and recent India-China border disputes. In comparison, the route from the northern Indian state of Bihar to the proposed Kerung dry port at Nepal-China border of TAR is only 265 km. Its use could save a lot of time and transport costs for India and China.
Nepal and China are in agreement on this. Moreover, the Trade and Transit and BRI agreement with China has boosted Nepal’s transit aspirations. The transit agreement with China allows Nepal use of seven Chinese transit points—four seaports and three land-ports—for third-country trade. Also, during Prime Minister KP Oli’s state visit to China in June 2018, Nepal agreed to intensify the implementation of the Memorandum of Understanding on Cooperation under the Belt and Road Initiative to enhance connectivity through ports, roads, railways, aviation and communications—all within the overarching framework of the Trans-Himalayan Multi-Dimensional Connectivity Network.
The MoU has been described as the most significant initiative in the history of bilateral cooperation. During President Xi Jinping’s Nepal visit in October 2019, the two sides agreed to implement the MoU. “The two sides agreed to intensify implementation of MoU on cooperation under the BRI within the overarching framework of Trans-Himalayan Multi-Dimensional Connectivity Network with a view to significantly contributing to Nepal’s development agenda,” said the joint communique issued at the end of the visit. Back then the two sides had also agreed to conduct a feasibility study for the cross-border railway, reiterating the commitment to extend cooperation on Kathmandu-Pokhara-Lumbini Railway Project.
India has also agreed to Nepal’s request for an east-west railway line, parallel to the east-west highway, which is now in its preliminary phase of survey and Environmental Impact Assessment (EIA). Besides this, the Indian government has been surveying other railway lines from Raxaul, Jogbani and Jayanagar in Bihar to Birgunj, Biratnagar and Bardibas in Nepal. The railway will link Nautanwa (UP) and Nepalgunj Road, as well as New Jalpaiguri (West Bengal) and Kakarbhitta.
But there is also a strong security component in how India views Nepal; it sees the Himalayas and the ocean as India’s ultimate security perimeters. In this view, Nepal’s Tarai-Madhes is India’s soft belly, which, if penetrated, would expose the whole Indian heartland from Kolkata to Delhi. India sees Nepal as a ‘strategic Himalayan frontier’ against Chinese threat and thinks that the Chinese want to encircle India by developing a rail link from Lhasa to Kathmandu, which in turn is supposedly a part of China’s ‘string of pearls’ strategy.
India’s security concerns with Nepal intensified following China’s occupation of Tibet in October 1950, resulting in Nepal having contiguous borders with China. With a possible danger to Nepal’s territorial integrity impinging on its own security, stability in Nepal became a top Indian priority. To meet India’s (and to an extent, also Nepal’s) security concerns, India and Nepal signed the 1950 Treaty of Peace and Friendship, which has since been the bedrock of Indo-Nepal relations. In 1951, the two countries decided to establish check-posts along Nepal’s border with Tibet, to be jointly manned by Nepali Army personnel and Indian wireless operators. This enabled India to receive intelligence reports on military activities in the north.
Later, the Kathmandu-Kodari road, completed in 1965, connected China and Nepal via a difficult Tibetan route. Indians believed that the Chinese could use the road to breach the Indian heartland. Then came the 1962 India-China border war, multiplying Indian mistrust. Besides that, India is yet to join the BRI initiative, reportedly as the ‘China-Pakistan Economic Corridor’ (CPEC), a BRI centerpiece, passes through the POK (Pakistan Occupied Kashmir), which India claims as its own.
In Nepal, the MCC is seen as a counter to the BRI and as a part of the US Indo-Pacific Strategy. The MCC was plunged into controversy in Nepal when senior American officials began saying that it is a part of the IPS. Nepali perceptions that the IPS is in direct opposition to China’s BRI have only intensified. On the other hand, China sees friendship with Nepal as vital to its entry into South Asia. China’s strategic move into South Asia and India’s strategic alliance with the US add to these complexities. It is obvious that these new challenges have direct geopolitical, strategic and security impact on Nepal, as India, China and the US fight to increase their leverage, potentially undermining Nepal’s national interests. No wonder the buffer state mentality prevails in Nepal’s relations with India and China, undermining its role as a bridge between the two countries.
The Cold War’s end witnessed greater regional and global economic integration, highlighting that economic cooperation among neighbors fosters political stability, enhancing collective security and easing mistrust. Further, many small countries have found creative ways to capitalize on the large economies of their neighbors, for example Switzerland with Germany and France, Paraguay with Brazil, Canada and Mexico with the US, Laos with Thailand, and Mongolia with China and Russia.
Nepal lies between a shining India and a rising China, with their advanced technologies, big populations, amazing infrastructures, and high-growth markets. Thus the revival of Nepal’s historical entrepôt would be vital in transforming it from land-locked country to a vibrant bridge offering transit facilities to both the economic giants. What we now need is a comprehensive security approach that ties together security and development.
The author is affiliated with the Institute of Foreign Affairs, a government think tank under the Ministry of Foreign Affairs