Nepal’s Foreign Policy Priorities and Challenges in China-India Competition

Yuba Nath Lamsal: -- Abstract: Nepal’s geographical position has limited its foreign policy choices right from the emergence as a modern, independent and sovereign state back in the latter half of 18th century. Situated between two asymmetric neighbours, Nepal’s foreign policy has been guided by its quest for survival. As the existing world order seems to be in the cusp of change with steady rise of China, Asia has emerged as the major theatre of international geopolitical rivalry. Big powers and their regional allies as well as other emerging powers are, accordingly, realigning their strategies and foreign policy priorities to suit their interests in the changing global order. As the geopolitical rivalry has shifted to Asian theatre and more particularly in its neighbourhood, Nepal faces even bigger challenge to cope with the new geopolitical push and pull among big powers and more particularly between China and India. In the case of Nepal, the geopolitical rivalry is triangular as, besides its two neighbours—India and China, the United States, too, is a key player in the region and is desperately seeking to have its strong foothold in Nepal apparently in the pursuit of containing China. In the triangular geopolitical contestation, Nepal has to reorient its foreign policy and strategic outlook that demand greater acumen in balancing relations with big powers and more particularly with China and India. The present geopolitical push and pull in the region could be both opportunity and challenge for Nepal. From which it can reap benefits while slight miscalculation may land in trouble. As a small landlocked country between the two rival powers, Nepal has always faced difficulty to preserve its independence but it has managed to do so even during the most difficult times. Nepal has no luxury of choosing one neighbour against the other and right from the beginning Nepal has been maintaining perfect and meaningful balance between China and India that helped preserve its independence even when the rest of South Asia was under British colonial rule. As the present scenario is even more challenging, the article will, thus, try to analyse all trends and historical developments of Nepal’s relations with India and China along with the challenges and difficulties it has faced in balancing relations with these two neighbours in different interval of history in the pursuit of maintaining sovereignty. -- Introduction A great Sanskrit poet Kalidasa says in the epic poem ‘Kumārasambhavam’: “Far in the north, lies the king of mountains named the Himalayas, whose soul is the Deity. With both its arms immersed in the oceans in the east and the west, it stands proud as a measuring scale of the earth" (Shastri 1941). The 21st century is the Asian century. Europe was the center of international power in the 19th century as Europe virtually controlled the entire world. The 20th century remained American century as the United States of America was the dominant power or Super power. The Soviet Union, too, briefly emerged as a superpower challenging the America’s dominant role in the global politics especially after the World War II. Moscow could not sustain its might and collapsed in 1991, which, in the words of Vladimir Putin, was the greatest geopolitical catastrophe of the 20th century (Sorge 2022). In the aftermath of the Soviet Union’s disintegration, the world witnessed the kind of situation where the United States dictated and the rest of the world took notes. The Asian century signifies the fact that Asia would be the decisive factor in the global architecture of power. With global geopolitics shifting to Asia, the Hindukush-Himalayas region is emerging as the epicentre of global power politics. The Himalayas-Hindukush region encompasses a larger landmass of Asia including Nepal, China, Pakistan, India, Bangladesh, Bhutan, Afghanistan, and Myanmar. The Hindukush-Himalayan region covers landmass of 4.2 million square kilometres, which is less than 4 per cent of world’s land area but has 3.4 billion people or over 42 per cent of the global population. In the newer geopolitical reality, countries of the Hindukush/Himalayan region have a greater role to play for the international balance of power. South Asia is an integral part of broader Hindukush-Himalaya region, which occupies more prominence in the geopolitical landscape of the 21st century. South Asia is currently a global hub of trade as the Indian Ocean is the main trade and supply route between Asia and the Middle East and Europe (Samaranayake 2024). Being critical hub for maritime trade, the Indian Ocean is a contested geopolitical space posing maritime security challenges, and climate risks (Sinha 2024). Peace and stability in the Indian Ocean region is critical to the global trade and economy. Major global powers are, therefore, scrambling to have their foothold and control over Indian Ocean region seeking to have greater domination in the global politics (Samaranayake 2024). The international power shift has also altered the global strategic landscape. In the new architecture of power, Asia has emerged as the heart of the world whereas South Asia is the heartbeat of Asia. With the rise of China as a global power, the United States views Beijing as the principal threat to its global hegemony and has come up with newer Asia-focussed strategies and alliance systems in order to contain China, while India joins anti-China bandwagon of any kind and with any power. India too views China as security threat which, despite claiming to be non-aligned, ‘repeatedly sought alignments against China’ (Bajpai 2021), be it with the Soviet Union during the Cold War era or presently with the United States. India and the United States have entered into several security and military agreements including the Basic Exchange and Cooperation Agreement (BECA) (Bajpai, India Versus China 2021). The US Indo-Pacific Strategy, Quadrilateral Security Dialogue of the United States, India, Australia and Japan as well as the Australia-United Kingdom-United States trilateral defence alliance (AUKUS) are newer US-led security strategies and alliance systems in Asia apart from already existing US-led security arrangements seeking to contain and encircle China. Beijing, already a global power, too, may come up with its own counter-strategy in the region to protect its interests. China so far has economic and connectivity related schemes under the Belt and Road Initiative (BRI), which India and the West dub as Beijing’s strategic grand design. There are already several BRI projects in Pakistan, Sri Lanka, Bangladesh and Maldives, which are of economic and developmental nature. Nepal too has signed the broader BRI framework agreement but its progress has faced headwind owing to internal and geopolitical factors. China, unlike India and the United States, does not have any projects and arrangements of strategic, security and military nature in South Asian. If India and the west intensify their security alliances and partnership and intend by any means to hurt the interest of China, Beijing may not remain a silent spectator but retaliate with all force and capabilities in its disposal. Asia is already a broad theatre of rivalry between global powers. Given the geopolitical and strategic significance, South Asia, too, is emerging as a new conflict zone in which external forces play one against the other. In this larger geopolitical rivalry, the smaller South Asian countries are likely to be caught in the crossfire, of which Nepal is well cognizant and has accordingly devised foreign policy strategies. Evolution of Nepal’s International Relations Nepal is an ancient Himalayan country in South Asia with a long history of its continued existence as an independent country, which stands as the crossroad of Chinese and South Asian civilizations. Different archaeological excavations and other evidence have pointed to the fact that Nepali civilization existed right from 300 BC (Sangroula 2015). The history of Nepal’s international contacts and relations with neighbouring countries of what is now called India (there used to be several principalities which were unified by British and named the unified country as India), Tibet and China has a long history that dates back to even earlier than 300 BC. Hindu mythology and scripts point Nepal’s existence and its foreign relations to Ramayana period. Legend has it that there used to exist a powerful kingdom in Nepal's southern plain called Janakpur or Mithila even earlier and its king was Janak, who was famous throughout South Asia for his scholarly acumen and astute governance (Jain 1959). Around the same time, there used to be a powerful kingdom in northern India of Aayodhya, whose king was Dasharath. These two kingdoms promoted friendly relations through matrimonial connection as Ayodhya's crown prince Rama married to Janakpur's princess Sita around 7th century BC (Shaha 1992). This is, perhaps, the first incident involving international relations in South Asia. It is believed that Nepal's Kirat Kings had relations with the Hastinapur Kingdom of India during the Mahabharat period around 1500 BC. One Kirat King Jitedasti, participated in Mahabharat war, in which, Jitedasti helped Pandavas and fought the war against Kauravas, from which he never returned (B. C. Sharma, Nepalko Aitihasik Ruprekha 2008 BS). Perhaps he might have died in the war but it is nowhere mentioned in the accounts of Mahabharat war and its authenticity has not been established. Buddha and Buddhism are other factor that connected Nepal with Indian states in the south and China. Siddartha Gautama or Buddha was born in Lumbini as a prince of Shakya kingdom of Kapilvastu, southern Nepal, and later attained enlightenment and became Buddha in Bodhagya of India in the middle of the sixth century BC (Oldfield 1880). According to genealogy, emperor Asoka of Magadha, one of powerful states of ancient India, visited Lumbini, Buddha’s birthplace, on his pilgrimage, and had a stone pillar installed in Lumbini as a symbol of his respect to Buddhism, which still stands as Ashoka Pillar. Emperor Ashoka later visited Kathmandu, where he had his daughter Charumati married with a prince Devpal, a prince of Kathmandu (B. C. Sharma, Nepalko Aitihasik Ruprekha 2008 BS). This historic incident is evident of Nepal's long diplomatic history which existed as early as 250 BC. Kautilya's Arthasashtra (Economic Theory) mentions Nepal and Nepal’s trade of the Magadh state with Nepal. Pataliputra (present Patna of India) was the hub of trade between Nepal and the rest of Magadh and other states of South Asia. Woollen materials, kasturi (an aromatic gland of musk deer), copper utensils and iron were the key trade items between Nepal and Magadh state during the Maurya period in ancient India. Kautilya’s Arthashatra, too, mentions about bustling trade between Nepal and Magadh, a dominant kingdom of the sub-continent (B. C. Sharma 2008 BS). The Kathmandu Valley, (the Kathmandu Valley was known as Nepal in the past) at one point of history was ‘intellectual and commercial entrepot’ between South Asia and East Asia through Tibet (Rose, NEPAL Strategy for Survival 1971). Nepal is situated on the southern slope of the Himalayas connecting the Gangetic plain with China. A land-locked country, Nepal shares border with India in the East, west and south and with China in the north. Nepal shares 1751 kilometres border with India and 1389 kilometre with China. Nepal is a part of larger landmass of South Asia, which has multiple connectivity with India. Although Nepal is technically landlocked but practically India-locked out of which India has time and again tried to demand a pound of flesh from Nepal often seeking to undermine Nepal’s sovereignty. The high Himalayan peaks, harsh climate and difficult topography in the north along the border with China often posed problem for transportation and communication. These conditions, however, didn’t deter people from travelling across the high Himalayan Mountains using some passes in between for trade and pilgrimage connecting people of China and Nepal. The Himalayas sometimes served as barriers but they more often played crucial role as deterrent between China and India as these two countries often tried to checkmate in history. According to Hiranya Lal Shrestha, ‘the mountains and the rivers have linked Nepal and China together and the towering Mount Everest (Jhomolongma) serves as a symbol of Sino-Nepalese friendship’ (Shrestha 2000). Modern technology has helped people to overcome the geographical barriers but it is yet to be fully translated for practically facilitating smooth trade, transportation, movement of goods, services and people between Nepal and China. Nepal’s connectivity with China is still poor compared to India and Nepal largely depends on India for transit facilities and trade with the third countries. Nepal and China have agreed for using Chinese ports for trade with the third countries but Nepal has not reaped benefit primarily because of distance and poor connectivity that makes goods costlier and consume longer time. The nearest Chinese sea port is four times far from Kathmandu compared to the distance with India’s Kolkota port. Geography is destiny of people, society and the country. Geography and its surroundings shape everything including politics, development and foreign policy of a state (Marshal 2015). Nepal’s geography has accordingly shaped its foreign policy and strategic perspective. The geography in which Nepal is located and its position between the two big powers has conditioned Nepal’s strategic and foreign policy choices right from the time when Nepal emerged as a modern nation-state and it has been seeking for survival as an independent country protecting its sovereignty. Moreover, in the present realist world, where interests determine relations between countries. National interest is the determinant factor in shaping and prioritizing foreign policy conduct. Nepal’s foreign policy viz-a-viz its two immediate neighbours has been shaped and characterized by its geographical compulsion followed by economic reality. Rise of Nepal as Modern State and Its Foreign Relations Nepal was ruled by different dynasties like Kirant, Lichchhivis, Mallas and Shahs succeeding one after another witheach dynasty producing a system of government, society and culture typical of its own (Y. N. Khanal 1996). Kirants established their kingdom in as early as 1000 BC (Thapa 1973) on the southern foothills of the Himalayas stretching as far as Kathmandu Valley. Kirats were Mongoloid in race and are believed to have come from Tibet and China and Mongolia. Kirat rulers had closer relations with Tibet and China. Malla period is known in Nepal as renaissance period for the development of art, culture, economy and trade. Trade between Nepal and Tibet was full of life and Nepal’s relations with China and different states in the south was also lively and finally Shah dynasty ruled since 1768 till Nepal was declared a republic in 2008. The size and boundaries of Nepal fluctuated with the change of rulers and dynasties. Nepal is the oldest independent and sovereign country in South Asia (Ripert 2014). Nepal, Bhutan and Sikkim were independent countries even when the rest of South Asia was British colony, out of which India was born as country. Sikkim lost its independence as India annexed sovereign Sikkim and made it a part of Indian union in 1975. Events and developments in the neighbourhood, be it the annexation of Sikkim or creation of Bangladesh by splitting Pakistan in 1971, caused unease to Kathmandu’s elites and ‘triggered serious re-thinking of Nepal’s national security option’ (Josse 2004). Nepal’s ‘Zone of Peace’ proposal that came immediately after Sikkim incident was Kathmandu’s strategic re-thinking which India refused to support despite 116 countries had endorsed it. Nepal always watched the events in the neighbourhood more cautiously and accordingly adopted its strategy to maintain its independence, which Leo E Rose calls as the ‘Strategy for Survival’ (Rose, NEPAL Strategy for Survival 1971). However, Nepal managed to safeguard its independence throughout history despite many ups and downs. The occasional comments and statements of some Indian politicians about the status of Nepal made Kathmandu’s decision makers more nervous. Nepal's history is chequered so is its international relations and diplomacy. Nepal's size and influence always fluctuated which also had impact on its diplomacy and international relations. When Nepal's territory was expanded, it used to have greater diplomatic influence far and wide both in the south and north, while its diplomatic influence and relations contracted when Nepal’s size shrank and fragmented. The modern history of Nepal begins with the creation of a unified Nepal in 1768. Prithivi Narayan Shah, king of a tiny mountainous kingdom of Gorkha, laid the foundation of what is now called Nepal in the latter half of the 18th century bringing together several small and splintered principalities. While British colonial rulers were enlarging their colony taking control over (Wikipedia n.d.)different principalities of South Asia either through the use of force or tricks, Nepal was aware of the danger of falling into the trap of colonial design unless the small and scattered kingdoms were brought into one bigger and stronger umbrella. Motivated by this larger goal, the Nepalese, whose soldiers are famously known as ‘Gurkhas’, continued their territorial expansion. “We shall wash the blood from our Khukuris in the Ganges” (Rose, Nepal Strategy for Survival 1971) was Nepal’s popular slogan of that time which amplifies its ambition of territorial expansion and creating a larger nation. At one point of time, Nepal’s boundary expanded to Tista River in the east, Sutlej River and Kangara Fort in the West and Yamuna River in the south and also close to Xigatse of Tibet in the north (B. Sharma 2008 BS). British colonial rulers took Nepal’s continued territorial expansion as a threat and declared war against Nepal in 1814. Nepal and British came face to face in their bid for expansion of territory and fought ugly war for two consecutive years in 1814-16 in which Nepal not only lost almost one-third of its territory but also brought Nepal’s drive for territorial expansion to a complete halt. The war between British colonial rulers and Nepal ended with the signing of the Sugauli Treaty in 1816, which served a blow to Nepal’s national pride and sentiment. Nepal took back a small size of the territory lost during the war as a prize for helping the British to crush the ‘Sepoy’ mutiny in 1857. The rest of the territory that British captured from Nepal in the Anglo-Nepal war are now in the possession of India. The present Nepal’s boundary with India was demarcated by Sugauli Treaty but India has time and again encroached Nepal’s territories along the border, which has been the key bone of contention in the relations between the two countries. Nepal’s foreign policy has always been conditioned by its geopolitical reality. The founder of modern Nepal King Prithivi Naryan Shah described Nepal’s position as being the ‘yam between the two boulders’ clearly amplifying the position between the two giants—British India in the south and China in the north. Towards the end of his life, he recorded his wise counsels called as ‘ dibyopadesh’ on foreign policy perspective suggesting to maintain friendly relations with the northern empire while remain alert with the south, which is more clever (Acharya, Prithivi Narayan Shah's Dibyaupadesh 2024). His interpretation of Nepal's strategic position was on the basis of regional situation followed by strength and attitude of the two powerful neighbours both in the north and the south. Prithivi Narayan Shah likened China in the north and British in the south (India) as the two boulders and tiny Nepal which was just struggling for survival as a fragile yam (Lamsal, Nepal lacks Strategic Thinking in Foreign Policy 2016). The concept of ‘yam between two boulders’ still continues to be the basis of Nepal’s foreign policy which is equated with non-alignment policy Nepal has perused in the conduct foreign policy more particularly with its two giant neighbours. The Sugauli Treaty signed between Nepal and British India in the aftermath of the Anglo-Nepal war, to a large extent, limited Nepal’s foreign and security policy after which Nepal turned inward-looking in its security and foreign policy seeking only to preserve its sovereignty and independence instead of projecting power beyond its border and enlarging its territories. The analogy of ‘yam and boulders’ might have been valid at a time when Nepal’s contacts and relations were limited to its northern and southern neighbours that were inimical to one another. Nepal had come into confrontation with both these empires, although confrontation with the south was more pronounced. Nepal faced challenge to defend its territories from the British colonial power in the south and China in the north. Nepal perceived more threat from the south as British were in the continued mission of expanding territories and trade in South Asia. The threat from the north was relatively less dangerous given the topographic and climatic adversity along the Himalayan border and China’s lesser interest south of the Himalayas. Nepal was on the unification campaign and had to act cautiously so that its military campaign would not end up in confrontation with both empires. The sole strategy of Nepal was to protect the newly conquered territories and maintain Nepal's sovereign status intact. Now Nepal has diplomatic relations with 182 countries in the world and has adopted the policy of ‘friendship with all and enmity to none’ (MOFA, Nepal's Foreign Policy 2024). In the present context of interconnected and globalized world, ‘yam and boulder’ analogy might have lost relevance as it tends to limit Nepal’s foreign policy only with its two immediate neighbours with which Nepal shares border (Lamsal, Nepal in the Face of Geopolitical Rivalry of Great Powers 2022). However, Prithivi Narayan Shah’s ‘Dibyopadesh’ (wise counsels advice to his successors are to maintain friendly relations with the emperor of the north (China) and remain watchful with the rulers of the south (British) more as it is very clever and has kept Hindustan under its control. He however suggested not to resort to attack first but not to hesitate for counterattack if the adversaries attack (Acharya 2024 BS ). Britain was the first country with which Nepal established its diplomatic relations in 1816. Nepal’s relations was British centric as long as British maintained their colonial presence in South Asia. It was perhaps Nepal’s survival strategy to maintain independence from colonial power as the principal threat to its sovereignty and independence was from the South. The high Himalayan topography and harsh climate in the north served as a natural barrier and deterrent with China and Nepal perceived a little threat from the north due to which its engagement and connectivity were minimum. The infamous September 14, 1832 incident, which is known in Nepal’s history as the ‘Kot Parva’ (political massacre in which several political figures and military officials were killed in royal court) changed the course of Nepal’s politics as well as international relations. Jung Bahadur Rana carefully orchestrated this plot with the help his brothers and aides of which British resident (ambassador) in Kathmandu was pre-informed. Jang Bahadur then declared himself as prime minister by which he captured all state powers confining the king as a powerless titular head. This arrangement is known as Rana oligarchical system in which the eldest member of the Jung Bahadur Rana’s clan would be the executive chief while the entire military and bureaucracy were captured and tightly controlled by members of Rana clans. Since the family oligarchy established conspiracy, the rulers were always fearful of similar conspiracy against them and adopted the policy of appeasing the British for the sustenance of their regime with British support. According to Leo E Rose, ‘the Ranas from Jang Bahadur to Mohan Sumsher adjusted their foreign policy to a framework designed in its essentials by the government of India” for which Ranas were derided as ‘lackeys of the British imperialists’ (Rose, NEPAL Strategy for Survival 1971). When British were preparing to withdraw from South Asia, Nepal hastened to establish diplomatic relations with the United States in April 1947, a month earlier than establishing diplomatic relations with independent India. This was strategically important in the wake of Indian leaders’ views on their neighbourhood policy. Some hardliner leaders including then Deputy Prime Minister Sardar Vallabbhai Patel were of the view that small countries of South Asia should have been annexed with India (Rose, NEPAL Strategy for Survival 1971). Despite hesitation from hardliner leaders the prime minister of provisional government of India Jawaharlal Nehru established diplomatic relations with Nepal in 1947 to alley Kathmandu’s fear on the one hand and forced the beleaguered Rana regime to sign 1950 Treaty of Peace and Friendship, which many in Nepal call it unequal and have been demanding its abrogation and signing a new treaty on the basis of sovereign equality on the other. Rana rule was almost on the verge of collapse in the wake of popular movement following India’s independence and accepted India’s conditions with the hope of continuing its power with support of independent India in the same manner they did with the British. However, the wave of change swept across Nepal and brought about political change in 1951 heralding the dawn of democratic era. Even now the basis of Nepal-India relations continues to be the 1950 ‘unequal’ treaty that has characterized asymmetric relations between Nepal and India. Nepal’s relations and engagements with northern neighbour, China, are, however, marked by friendship and cooperation with some exceptions of conflicts. Nepal-China relations are historical and civilizational. ‘The epigraphic evidences refer to the contact between Nepal and China from fifth century but political relations date back to seventh century (Manandhar 2004). Usually, Nepal’s contacts and engagement with China were through Tibet till the first half of the 20th century with which it had more trade and economic interest than political and security interest. Except some occasional confrontations, the relations with China remained peaceful and friendly. The confrontation with China was due to Beijing coming to rescue of Tibet in the conflict with Nepal. Otherwise, the relations with China have been friendly characterized by civilizational bonds. Nepal generally perceived India as the principal threat to its sovereignty and territorial integrity and other interests, while China was considered as too distant- both in physical and cultural terms- to threaten its independence but close enough to serve as potential source of support’ (Rose, NEPAL Strategy For Survival 1971). Modern Era Relations The 1951 political change not only marked the dawn of democratic era in Nepal but also heralded a new chapter in the international relations. This marks the beginning of foreign policy diversification. Until then Nepal had diplomatic relations only with four countries— United Kingdom, the United States, India and France. After 1951 political change, Nepal has continued to diversify its relations beyond its neighbourhood. Nepal’s international relations entered a new era with it having membership of the United Nations and entering into formal diplomatic relations with People’s Republic of China in 1955.. The basis of international relations and diplomacy have always been the safeguard of boundaries and territories for a country anywhere in the world. Economic interests and trade have been the secondary guide for diplomacy and international relations. In the similar vein, the fundamental goal of Nepal’s foreign policy has been to safeguard its national interests. The national interests are determined by geography, history, and other geopolitical considerations. The Constitution of Nepal 2015 has clearly defined Nepal’s national interests and foreign policy goals and priorities. The Constitution, in its Article 5 (1), has defined national interests as: “Safeguarding the freedom, sovereignty, territorial integrity, nationality, independence and dignity of Nepal, the rights of the Nepalese people, border security, economic wellbeing and prosperity” (Nepal 2015). The core objectives and goals of Nepal’s foreign policy are, thus, protection of these constitutionally defined core national interests. According to the Ministry of Foreign Affairs (MOFA), the fundamental objective of Nepal’s foreign policy is to enhance dignity of the nation by safeguarding sovereignty, territorial integrity, independence, and promoting economic wellbeing and prosperity’ and contributing to global peace, harmony and security’ (Ministry of Foreign Affairs 2024). Similarly the MOFA states that Nepal’s foreign policy is guided by some basic principles that include ‘mutual respect for each other’s territorial integrity and sovereignty, non-interference in each other’s internal affairs, respect for mutual equality, non-aggression and the peaceful settlement of disputes, cooperation for mutual benefit, abiding faith in the Charter of the United Nations, and the value of world peace (MOFA 2024). Nepal is destined to live and co-exist with India and China, which are both ancient civilization and modern powers (Y. N. Khanal, Nepal Foreign Policy Continuity and Change 1996). Nepal’s geo-strategic position demands it to be more careful in navigating its foreign policy and strategic issues in a perfect balance with the two immediate neighbours and other powers. ‘Friendship with all and enmity to none’, remains to be the soul of Nepal’s foreign policy which is based on the principles of non-alignment, sovereign equality and five principles of peaceful co-existence (Khanal 2019). Nepal’s world view and vision have been based on these principles and priorities set forth in the constitution and policy documents. Even during the height of the Cold War, Nepal perfectly maintained balanced relations with both the power blocs based on non-aligned policy and was successful in getting goodwill from the countries of both the power blocs. However, the antagonistic relations between India and China always posed problem for Nepal in maintaining delicate balance. Nepal has no luxury to side with one against the other nor does it wish so. However, Nepal often came under disparagement from India occasionally accusing Nepal of playing China card against New Delhi. This was mere accusation aimed at maligning Nepal’s independent foreign policy and decision-making. Nepal suffered three economic blockades and other similar punitive actions imposed by India in the past for not accepting some India’s wish lists viz-a-viz Nepal-India relations. Indian diplomats and leaders often cite the India-Bhutan arrangement as the best model for Nepal-India relations prescribing New Delhi‘s heavy handedness or control over Nepal’s foreign policy and security affairs. India has on different occasions proposed, in most cases informally and sometimes formally, its wish lists that appear to be in line with India-Bhutan model. In 1990, India formally and in writing proposed with Nepal a proposal in which New Delhi’s evil will was apparent. The proposed draft document (agreement) in the wake of India’s economic blockade in 1990, sought Nepal to: ‘consult with India beforehand in case of purchasing arms from other countries and training of armed personnel and raising additional military units in Nepal; “accept India’s first policy in Nepal’s economic development and industrial projects whenever Nepal decides to seek foreign assistance for such purpose; and an understanding in the water resources cooperation over the ‘commonly shared rivers’ with exclusive Indian involvement” (Kumar 1992). But Nepal refused to cave in to India’s demands. The recent ‘Akhanda Bharat’ (greater India) bandwagon of Narendra Modi’s government also comes as a reflection of its hegemonic attitude in South Asia particularly with its weaker neighbours including Nepal. In fact, there had never been ‘Akhanda Bharat’ in history. ‘Bharat’ symbolizes a greater landmass like South Asia but not a country. After Narendra Modi came to power, India’s hegemonic attitude has been more pronounced as Nepal’s territory in Kalapani areas was included on a new map of India, which Nepal not only objected but also published its own map making it a part of the constitution. Nepali leaders are aware of India’s hegemonic policy in South Asia but only a few are vocal while more are reticent and avoid open confrontation with New Delhi for reason of multiple connectivity, open border, and economic, social and cultural commonalities. Nepal has multiple issues with India but has no alternative other than managing and working with it. However Nepal views China as a key balancer in its relations with India and accordingly values relations with Beijing. Greater connectivity and cooperation with China can definitely deter India’s highhandedness in Nepal, to a larger extent but Kathmandu is wary of the unease it may cause to India and tries to avoid overt engagement with Beijing. India and China have fundamental difference in the perception about Nepal and South Asia. While India views Nepal and South Asia its sphere of influence akin to Washington’s ‘Monroe Doctrine’ in Americas and wants Nepal to be economically dependent. China, on the contrary, sees South Asia as its neighbourhood and Nepal as a gateway for trade to India and South Asia. Contrary to Indian hyper sensitivity over Nepal-China relations, China’s perception in Nepal is pragmatist and wants Nepal to be a stable, economically prosperous and politically independent country. China understands Nepal’s compulsions and often suggests to be pragmatic in foreign policy handling with its neighbours in view of its geo-strategic position. South Asia is a dynamic region where different powers are at play. With China rising in lips and bound, Beijing’s footprints are visible in South Asia more apparently than ever as different projects are underway in Pakistan, Maldives, Sri Lanka and Bangladesh. China seeks to build greater connectivity in South Asia, for which it is already building China-Pakistan Economic Corridor (CPEC) and several infrastructure related projects in Sri Lanka, Bangladesh and Maldives. The proposed Bangladesh-China-India-Myanmar (BCIM) road connectivity project under BRI is in limbo as India has refused to participate. If constructed this road would create greater connectivity and facilitate trade and human movement not only between China and South Asia but also between East Asia and South Asia. Nepal has signed China’s flagship connectivity project, the Belt and Road Initiative, but is still hesitant to go into its practical execution for geo-political reason. Nepal as a least developed country needs support and assistance from friends abroad for its social and economic development. China’s BRI can be a good source of financing given that Nepal has been taking bilateral and multilateral assistance from other countries and multilateral institutions. Nepal’s interests are best served in maintaining equally cooperative relations with northern and southern powers, which is also the primary principle of its foreign policy. Nepal in fact is walking tight rope diplomacy in dealing with India and China but has often paid the price as New Delhi is over sensitive for any kind of deal with Beijing. As Nepal has often felt geopolitical pressure, its strategy could be multiple to withstand such pulls and pushes. One of such strategies could be revitalizing ‘South Asian Association for Regional Cooperation’ (SAARC), which, if revived, is expected to be an effective regional forum to build a cooperative relations based on sovereign equality among all South Asian countries. This makes it apparent for Nepal to build relations with China and other big powers for deterrence against India’s hegemony and ensure that nothing would impair its independent decision-making on foreign policy, economic and developmental projects. Nepal’s world view and regional perspectives are thus guided by this notion. Nepal’s proposition for China’s entry into the SAARC as an observer came against this background. In the thirteenth SAARC summit in Dhaka of Bangladesh in 2005, when India put forth the proposal to grant membership to Afghanistan, Nepal stuck to its demand for bringing China into the SAARC as an observer and even indicated to veto if its proposal was not accepted (Kharel 2005). Nepal’s move came out of the strategy of balancing powers in the region and making the SAARC, resourceful, balanced and more assertive as a regional body to ensure peace, stability and meaningful cooperation in the region. However, SAARC has gone into coma owing to India’s lacklustre attitude as New Delhi viewed SAARC as an attempt of South Asian countries to gang up against India (Chopra 1986). Singapore’s former Prime Minister Lee Kuan Yew once said ‘when two elephants fight, the grass suffers, but when they make love, the grass suffers too’. In Nepal’s contest, elephant is already in the room and dragon, too, is watching closely. Elephant and dragon do not generally make love but may fight. In both the scenarios, Nepal’s fate remains to be at stake. In the midst of China-India strategic rivalry and great power game, Nepal faces multitude of challenges in navigating complex geopolitical issues and delicately handling its foreign policy. Nepal is expected to play true role of a bridge between South Asia and East Asia for the greater benefit of South Asia and Hindukush-Himalaya region winning goodwill and trust from both the neighbours. The world at large and Hindukush-Himalaya region in particular ( South Asia and China combined) is facing newer challenges including the climate change that has impacted severely in the countries of this region posing threat to the life of more than three billion people. The snow of the Himalayas is melting faster and if the present trend of snow melting continues, rivers originating in the Himalayas including Tibetan plateau may dry up pushing human life in the region into the brink of extinction. In the present globalized and interconnected world, no country can survive and prosper in isolation. The problems are common and their solution can be found only in collective initiative. This requires all countries in the region to work collectively for the larger interest of humanity rising above sectarian interests. Nepal once mooted the idea of Nepal-China-India trilateral partnership for peace, stability, development and prosperity in the region (Lamsal, Three's a Crowd 2017). 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