Foreign Secretary Shanker Das Bairagi and Chinese Ambassador Yu Hong on Friday signed a Memorandum of Understanding on the framework agreement on China’s One Belt One Road Initiative (OBOR), marking Nepal’s official move to become part of Beijing’s ambitious plan to revive ancient Silk Road trade routes.

Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara and Foreign Minister Prakash Sharan Mahat were present at the event.

The agreement signing took place in Kathmandu just two days ahead of a summit on the Belt and Road Forum for International Cooperation in Beijing.

DPM and Finance Minister Mahara is leading a Nepali delegation to the two-day summit at Yanqi Lake located in a Beijing suburb near the Great Wall.

Hailing the agreement as a major development, Foreign Minister Mahat said the move is a major step forward in strengthening Nepal-China relations. “Road and railway connectivity is very important for us and we want investment for the same,” he said, adding that Nepal now requires a significant boost in foreign investment and that Nepal is optimistic about reaping benefits after becoming part of the Chinese initiative.

Ambassador Yu said the signing of the agreement will bring new opportunities for China-Nepal cooperation and South Asia development.

Initiated by Chinese President Xi Jinping in 2013, OBOR is a massive infrastructure project spanning some 65 countries and has so far garnered support from more than 100 countries and international organisations.

Chinese experts, who have welcomed the framework agreement between Nepal and China, stressed the need to focus on enhancing policy coordination, connectivity, unimpeded trade, financial integration and people-to-people contact for realising the goal of better connectivity. 

According to Professor Li Tao, executive director at the Institute of South Asian Studies in Sichuan University, the deal carries vital importance not only for China, but also for Nepal.

Nepal is touted as a transit bridge for the second biggest economy in the world to reach the South Asia for the fact that Chinese borders with Pakistan and Afghanistan are restricted by extreme natural conditions, India has great historical burden with China and Bhutan does not have diplomatic relations with China.

“Joining the Belt and Road Initiative will bring Nepal with investment and experience from China,” Li said.

On India’s reluctance to join the Chinese initiative, Li pointed at its core interests related with security and sovereignty. “By promoting Trans-Himalayan cooperation and attracting India in the China-Nepal cooperation, we can build a China-Nepal-India economical corridor, which will benefit the whole region,” Li said.

India’s unwillingness to become part of the Chinese initiative has been closely followed in Nepal, while some unease is palpable in New Delhi just as Beijing gears up to host leaders of 28 nations, including Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan, and senior delegates from other countries on May 14-15.

India, however, is likely to skip the meeting.

No decision has been taken on whether an Indian government delegation would attend the meeting, Reuters quoted Gopal Baglay, spokesperson for India’s Ministry of External Affairs, as saying. While New Delhi is closely watching the developments, which it sees as China’s growing influence over Southeast Asian countries, western powers do not appear too enthusiastic about China’s bankrolled infrastructure project through the initiative. Beijing is trying to take its ambitious plan forward at a time when Washington under US President Donald Trump is making a pitch for “America First” stance.

China’s ambitious initiative has also met with criticism from some analysts, who have cautioned that some countries with struggling economy could be burdened with Chinese loans under the project. The AFP news agency quoted New York-based Fitch Ratings as saying that political motivations might trump genuine infrastructure needs and commercial logic, leading to a heightened risk of projects proving unprofitable. 

Chinese Ambassador Yu said after the signing of the framework agreement that the initiative is not going to be China’s “solo show”, in an apparent indication that Beijing is aware of the criticism, as she described the project as a symphony performed by an orchestra.

“The Initiative is not going to be China’s solo show. A better analogy would be that of a symphony performed by an orchestra composed of all participating countries,” Yu said. “This initiative as a major international public goods provided by China will explore ways to address problems facing global and regional economy and create fresh energy for pursuing interconnected development.”