Kathmandu: Nepal is watching mounting tensions between India and China in the Himalayas with great concern as it struggles to balance its relationship with its two giant neighbors. Reportedly, both India and China are amassing troops and weapons along the Galwan Valley in Ladakh—and preparing for the worst. Indian Prime Minister Narendra Modi has already given his armed forces a free hand to “take necessary steps to protect Indian territory.”

Nepal is also keenly watching growing tensions between China and the US. Over the past few years, Nepal had been witnessing heightened US-China rivalry, largely owing to developments around the American Millennium Challenge Corporation (MCC) and China’s Belt and Road Initiatives (BRI).

In a June 20 statement on Ladakh, Nepal’s Ministry of Foreign Affairs urged both sides to resolve the dispute through dialogue: “… In the context of recent developments in the Galwan valley area between our friendly neighbors India and China, Nepal is confident that both the neighboring countries will resolve, in the spirit of good neighborliness, their mutual differences through peaceful means in favor of bilateral, regional and world peace and stability.”

In an earlier India-China faceoff in 2017, this time in Doklam valley on the Bhutan-China border, Nepal had also maintained its neutrality and urged the two countries to resolve differences through dialogue. At the time, although India did not publicly say so, many Indian intellectuals had asked Nepal to support India on the basis of the 1950 Peace and Friendship Treaty. Similarly, during the 1962 India-China war, Nepal was able to maintain its strict neutrality by resisting competing pressures.

But if India-China tensions continue to grow, Nepal could once again be asked to take sides. “Nepal has to take a clear position on whether to stay neutral or take a side,” says Nihar R Nayak, a Delhi-based expert on Nepal-India ties. “On this issue the ruling Nepal Communist Party will be divided. So will the opposition parties.” He says that as per the 1950 treaty, India could inform Nepal about its tensions with China and may seek its support.

Nepali geopolitical analyst Tika Dhakal differs. “Nepal has historically taken a neutral, non-aligned position between the two neighbors. One aspect of Nepal’s unique positioning in the South Asian region is its role as a buffer between India and China,” he says. “Continuation of this policy is important to ensure perpetual peace in Nepal as well as in the region.” Nonetheless, Dhakal too does not rule out added pressure on Nepal to take sides.

As with India, so with China

Just like India, China is also likely to seek Nepal’s support if tensions rise. In an email interview, Lin Minwang, Professor at the Institute of International Studies at Fudan University, and deputy director of the university’s Institute of South Asia Studies, says “India’s violation of the territorial sovereignty of China and Nepal has given China and Nepal a common strategic interest on this issue.” Therefore, China and Nepal should support each other in this process, whether this support is “direct or indirect, public or private.”

If China and India go to war, the issue of Nepali nationals working in the Gurkha regiments of the Indian Army will again come to the fore. In that case, says Nayak, political parties and people from various walks of life could protest the deployment of Nepali nationals against China: The prospect of your fellow citizens coming back in body bags while fighting for another country is rather unsettling. 

The employment of Nepalis in the Indian Army “will affect Nepal’s interests if there is a conflict between China and India,” says Professor Lin. “China and Nepal should consider this issue that could adversely impact China-Nepal relations.”

Separately, experts say growing India-China tensions could push India closer to the United States and the European Union. In this scenario, India and the US may choose to work together to curtail growing Chinese influence in the region. Both India and the US oppose China’s BRI in Nepal. If India’s rivalry with China continues to grow, there is also a likelihood of an informal alliance among the four Quad members—India, Australia, America, and Japan—under the Indo-Pacific Strategy.

“The Quad has always been a part of the ‘Great Game’ imagination in the Pacific Ocean. On paper, such an alliance appears grand. But history informs us that attempts to isolate a particular country seldom yield peace. Isolating a powerful rising power like China can have even more dangerous consequences,” Dhakal says.

Domestic ructions

Amid such a fragile international climate, the future of the KP Sharma Oli government is in doubt after five of the nine NCP Secretariat members asked for his resignation, both as the head of the government as well as the party chairman. PM Oli is also in a pickle over the MCC compact, which he backs but is opposed by the majority Secretariat members. If Oli is removed at this juncture, the compact’s future will be in limbo.

Professor Lin says that China expects the NCP unity to remain intact, especially at a time “external forces are trying to influence unity within Nepal.”

For his part, Dhakal expects the new geopolitical competition in Nepal to be first evident in the form of growing competition between the BRI and the MCC, and the SAARC and the BIMSTEC, for instance. In the medium term, “this may reflect in the development aid that will come with more strings attached, and in sharp division among big powers even in our domestic issues.”

Additionally, escalating India-China border tensions could have a wider socio-economic impact on Nepal in the form of “blocked trade routes and scarcity of supplies.”