Prime Minister KP Sharma Oli and his Cabinet claim that his recent state visits to India and China were a ‘success’. What is of importance is what Nepal has benefited, if at all, from these visits. I think these visits will reduce our over-dependence on India and regularise our trade access to and through China, which will expand our global trade.     

I am not making a point-by-point comparison between these two visits, but from a blanket review, it appears that China accepts Nepal as an equal sovereign nation, while India still regards Nepal as subordinate. Why else would India refuse to issue a joint communiqué during Oli’s visit? 

India still has reservations about Nepal’s constitution with regard to the treatment of the Madhesi people, and had imposed a prolonged trade embargo causing unprecedented hardships to the Nepali people. On the other hand, China welcomed the new constitution and also agreed to issue a joint communiqué after Oli’s visit.

Southern neighbour 

Throughout history, Nepal has remained dependent on India for trade. Besides some trade with Tibet in the past, Nepal has had to import almost all essential goods and services from India as industrial growth did not take place in Nepal until very recent times. Apart from the geographical limitation of being virtually ‘India-locked’, Nepal never took the initiative to develop its capacity of import substitution by enhancing its industrial infrastructure and diversifying its trade and transit. India took advantage of our psychology of being content with underdevelopment and we did not try to challenge it. That is why all the treaties and ties between Nepal and India are tilted in favour of India. In the guise of special relations, India has been treating Nepal as subordinate in almost all respects of mutual ties. 

Although India partially relaxed its embargo before Oli’s visit, the flow of petroleum products from India has still not normalised. Oil pumps are lined with vehicles and cooking gas is still scarce. India has agreed to open the Vishakhapatnam port for Nepal but it is problematic for reasons of distance and transport facilities. If India really intends to facilitate efficient and sufficient transit to Nepali imports from and through India, special rail services should be provided connecting Vishakhapatnam to the Nepal-India border. 

That Nepal’s relations with India have not been normalised by Oli’s visit is clearly demonstrated by the recent joint communiqué released by the European Union (EU) and the Indian Embassy in Brussels. It asks Nepal to find a satisfactory solution to the claims of various segments of the Nepali society, ignoring the fact that the Constitution of Nepal 2015 was approved by over 90 percent of the Constituent Assembly members. The EU had earlier welcomed the constitution. The fact that it signed the communiqué suggests that it did so at India’s behest. However, contrary to the submissive practice of the past, Nepali government and political leaders, except the Madhesis, have shown anguish about, and condemned, 

the communiqué. 

Moving north 

China is showing greater interest in developing mutual economic relations with Nepal and has expressed its willingness to widen opportunities by offering unrestricted transit facilities. This is the brightest aspect of Oli’s visit to China. But the darkest aspect of the visit was China’s refusal to regularise the supply of petroleum products. India had shown willingness to meet only 70 percent of Nepal’s petroleum needs and the remaining 30 percent was expected to be met by China. However, on the whole, Chinese commitment for cooperation is the most welcome feature of the visit.

There are still many inherent difficulties in expanding the scope of economic cooperation with China. The biggest hurdle is the difficult terrain of the Himalayas and the lack of transport infrastructure. Of the nine potential routes between Nepal and China, the one most in use was Tatopani, through which the largest share of trade took place until now. But unfortunately, China has decided to close this channel for unknown reasons. (One reason given is that the Khasa region across Tatopani is no good for human habitation). If Chinese intentions are not mala fide, the regularisation of other routes should be expedited. The proposed railway route should also be implemented without delay.

Another difficulty, however, is the unfamiliarity with the Chinese bureaucracy, compounded with the lack of knowledge of the Chinese language and culture. Although China has made great strides in economic development, its political process is still restrictive and the Nepali side will have to gain a fair amount of knowledge of cultural nuances and diplomatic norms. Apart from culture, bureaucratic requirements have to be learned through practice and training. It is obviously a time-consuming process.

Thus, the prolonged Indian embargo was a blessing in disguise as it has aroused the consciousness and willingness of the Nepal government to diversify the country’s trade and transit. But Nepali leaders are known for their complacency once the emergency situation is over. It is necessary to fight this complacency and remain steady in the face of Indian bullying, most recently demonstrated by the embargo. Our trade with China has to be expanded on a sustainable basis at any cost. That should not, however, lead us to strain our trade relations with India. We should acknowledge that for geographic and economic reasons, our trade with India is going to remain higher than with the rest of the world put together. But we should start stabilising our trade with China and looking for new frontiers. The current requirement is to start implementing what has been agreed between Nepal and China.

Sharma is a political analyst. He can be reached at [email protected]