After the fall of the Panchayat regime in the 1990s, Nepal’s political landscape was dominated by competing aspirations of parties that had mobilised for decades to end the autocracy. However, the legacy of charismatic leader BP Koirala—who had been incarcerated by the Panchayat regime—established the Nepali Congress (NC) as the largest party in the first general elections. Despite their popularity, the communist parties were divided and had to contend themselves with the opposition role for much of the next decade. The relationship between leaders of the NC and the Indian National Congress, forged during the exiled life of NC leaders in cities of Bihar and Uttar Pradesh, became instrumental in Nepal securing international support for economic reforms.

The communist parties were ideologically opposed to the idea of economic liberalisation and the market reform that the NC had initiated. However, in the post-Soviet era, where even communist China had embraced capitalism, mere opposition to the government’s economic policies would not have proved tenable for long. With the feudal monarchy contained by the new constitution, the next revolution needed a new enemy. A nuclear neighbour, surrounding the country on three sides, flexing its foreign policy muscles in the region, was a more appealing foe. Add to it India’s growing soft power influence through aid, trade and cultural export, and it perfectly sums the genesis of what has come to be known as ‘anti-India’ sentiments in Nepal.

Friendly foe

As India became more ambitious globally over the past four decades, it consolidated its influence in South Asia. The rise of China and deteriorating relations with Pakistan pushed New Delhi to adopt a more hawkish posturing in its immediate neighbourhood. In Nepal, this has provided a nationalist juice that has sustained mobilisation by different communist factions.

In the early 1990s, the CPN-UML extensively mobilised against the NC-led government’s negotiation with India over the waters of the Mahakali River. The party even came to power for a few months between 1994-1995, riding on their opposition to the proposed treaty. However, when the Mahakali Treaty was eventually signed in February 1996, the UML voted in favour of its parliamentary ratification. A day after the treaty was signed, a more radical faction among the communists declared a decade-long ‘People’s War’, demanding, among other things, abrogation of the treaty and the 1950 Friendship Treaty with India. It is bizarre that the party threatened to fight a trench war with New Delhi, but its leaders were holed up across various Indian cities and eventually sought Indian mediation for their peaceful political transition in 2006.

After the 2015 blockade, the communist forces forged a coalition and contested elections by projecting themselves to be the only nationalist force capable of pushing back New Delhi, only for their leaders, Pushpa Kamal Dahal and KP Sharma Oli, taking turns while in power, to mend ties with New Delhi and seek bilateral co-operation gradually.

Dahal and Oli’s double-speak is not limited to their government’s policy vis-à-vis India. Both leaders have led the government that negotiated the US-funded MCC deal and voted for its ratification in February 2022, but conveniently disowned it during their election campaign in November of the same year.

Pointed problems

Nepal and India have numerous outstanding issues to address. There are genuine grounds to speculate that Nepal may have been underhanded in the past treaties with India. From the outstanding land compensation claims over the Tanakpur barrage to the unclaimed share of water under the Mahakali Treaty. Also, the Nepali economy has not benefitted as much from access to the Indian market as the Indian side has from exporting to the Nepali market, mainly due to non-tariff issues. There have also been instances when Kathmandu expressed displeasure at India’s micro-engagement with Nepali politics. However, it is New Delhi’s unwillingness to discuss the boundary disputes until recently which has fueled resentment among Nepal’s political class and bureaucracy. But is it entirely India’s fault?

As convenient as it is to blame India, there is seldom any introspection within Nepal about our own capacity and approach to engage diplomatically with a larger neighbour. The Nepali political class, bureaucracy and civil society may have painted an ideal picture of the international system for themselves, where countries aren’t pushing each other around. But the neorealist world today is not so forgiving, nor are thy good neighbours so conceding when it comes to their national interests. But who will tell Prime Minister Oli that his ego battle with New Delhi, resulting in a controversial Chuchhe Naksa, singularly threatens to unravel the deepening economic partnership Nepal has cultivated with the world’s fifth-largest economy?

Nepal may have unilaterally adopted the new map that incorporates territories under dispute, but India has physical control over the ground. And it does not help our case by trying to arm-twist a nuclear giant with high-pitched media-mongering. Instead, Kathmandu must revert to diplomatic basics, identifying trade-offs and incentives that it can use to engage constructively with New Delhi. Luckily, given its global ambitions and security sensitivities, India requires backing in its neighbourhood and on international forums to project its international stature as a rising power. That gives us some leverage in negotiations with New Delhi.

However, there is a tendency among Nepali intelligentsia to oversell any leverage that exists, material or imaginary. Their sure-footed commentaries in the mainstream, and increasingly on social media, have lately put unnecessary stress on the political class and diplomats, leaving them confused and indecisive. The MCC and BRI saga have sufficiently demonstrated this, and re-escalation of bilateral tensions during the prime minister’s scheduled visit to New Delhi could have a similar effect.

Let diplomacy be

Despite outstanding political differences, India and Nepal today have a thriving economic and development partnership. This is largely due to painstaking diplomatic efforts and back-channels on both sides. With New Delhi gradually overcoming its reluctance and relaxing its policies, Nepal has realised its goals of exporting energy in the Indian market and further across to Bangladesh. Unfortunately, the recent agreement between India and China to open trade through the disputed Lipulekh pass has once again forced Nepal to react, threatening the incremental gains made over the last few years.

Since becoming prime minister in July last year, Oli has waited for the opportunity to visit India and normalise personal and diplomatic ties. But his indiscreet attempt to draw Beijing into the bilateral territorial dispute shows he may not be making a serious attempt. Given his difficult position within the party and the next general election on the distant horizon, there is a reason to believe Oli is doing what he and his fellow communist leaders have done for so long. But surely, the outstanding disputes with a close neighbour and an important development partner cannot be allowed to become a holy grail for ailing leaders to draw from endlessly, prolonging their political careers.