Chinese Inroads into Nepal and its Effect on India’s Relations with Nepal

Maj Gen M Vinaya Chandran (Retd)
Sun, 13 Dec 2020
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Part II: India – Nepal Relations and the Future of India – Nepal – China Equation

(Link for Part 1 –

The people of India and Nepal have been close to each other from times immemorial. Ruling dispensations of both countries, however, have been having serious differences from 1804, when Nepal occupied large tracts of territory that belonged to Indian kings. It continues even today, even though, Nepal has become a democracy like India. India baiting has been the main election plank for all political parties in Nepal. However, a boundary dispute between the two is a recent phenomenon.

Nepal – India Boundary Issue

The Kalapani dispute came into being in the mid-1990s. King Gyanendra initially and the political parties subsequently raised considerable nationalistic fervour in Nepal against India, using this issue. Historical and geographical facts are inconclusive, as is the case in many international boundaries, that are colonial legacies. The only way out appears to be an adjudication by the ICJ and that can happen only if both India and Nepal agree to take the matter to the ICJ and also accept the verdict even if it doesn’t conform to their respective claims. An analysis of the legal standing of the issue puts the Indian claim on stronger ground.

Segauli Treaty of 1816, which made Nepal renounce any claim to the area West of Kali River has tacitly made Kali River as the boundary acceptable to both countries. The Treaty, however, does not specify the origin of the Kali River. All maps published by Nepal and India showed the origin of Kali River to be near Lipulekh and so did the map published jointly by Nepal and China in 1961, as part of their bilateral boundary agreement. There is no record existing of Nepalese claim against Lipulekh being the origin, till 1996, because of which the Nepalese claim is legally not sound.

Even if the origin of Kali River is accepted to be at Lipulekh, there are Indian security posts located to its West at Kalapani, which is technically an intrusion into the Nepalese territory. India considers the Kali River to originate from the point where Lipu Gad (a stream flowing down from Lipulekh) meets another stream originating from a spring at Kalapani. On the maps, India – Nepal boundary has been shown to deviate eastwards from a point on Kali River near Kalapani and follows a watershed up to Tinker Lipu, which is the India – Nepal – China Trijunction. Even though India can justify the alignment cartographically, it has not been bilaterally agreed upon between Nepal and India. Sugauli Treaty mentions only Kali River, which if originates at Kalapani, there is a need for an agreement on the alignment of boundary thereafter up to the Trijunction. This confirms the existence of a boundary dispute and the need for dialogue to resolve it.

In 2014 Indian Prime Minister visited Nepal, when the necessity for a dialogue to resolve the boundary dispute was established and a Border Working Group was set up to assist the respective foreign secretaries in resolving the dispute. Unfortunately, political relations between the two countries deteriorated from 2015 and the process of boundary dispute resolution got stalled. In 2020, Nepal published a map, unilaterally showing the disputed areas within Nepal. The dispute has now become political and emotional and a resolution delayed by the Corona Virus.

The dispute has to be resolved through bilateral dialogue, with experts from both sides considering historic, geographic and legal issues of the case. In case the political situation in the region does not improve, precluding an amicable bilateral solution, the case should be referred to the ICJ.

Nepal: A Zone of Peace

King Birendra of Nepal proposed Nepal to be a ‘Zone of Peace’ in 1975 and added it to the Nepalese constitution. The proposal had two main features, viz equal relationship status with neighbours and provision of support for the King of Nepal, against any possible internal uprising. China became the first country to endorse it in May 1976. For the next few years, many Chinese leaders kept reiterating firm support of China for the proposal, whereas India was not supportive of it (Hong-Wei 1985).

Nepal has only India and China as neighbours. Declaring Nepal as a ‘Zone of Peace’, with China’s support, points to an intent of the proposal being India centric. There was already a Treaty of Peace and Friendship in existence between Nepal and India at that time, which further put doubt in Indian minds about the Nepalese ulterior motive. The proposal was initiated not long after the ‘Sikkim Merger’, which would have cast a doubt in the mind of the King of Nepal. During the same period, Nepal’s opposition party activists were functioning from India and the Indian Government could not control them, further alienating India in the minds of the ruling elite in Nepal (Muni 1992).

India also doubted the complicity of China, Pakistan and the USA in pushing the King of Nepal to initiate the proposal. USA and China had come together with the help of Pakistan and they were not happy with India’s role in the liberation of Bangladesh. Peaceful Nuclear Explosion conducted by India at Pokhran in 1974, also did not help the Indian cause. The USA had also been nursing a grudge against India for proposing to declare the Indian Ocean region as a Zone of Peace (Muni 1992).

Current Trends

The 1980s and 90s saw India and China being more inward-looking and struggling to develop their economies. Their interactions in Nepal was minimal during this period. Initially, when the Maoist rebellion took roots in Nepal, China expressed unhappiness over Chairman Mao’s name being sullied and they increased engagement with the monarchy and security agencies. When India and USA refused military aid to the autocratic monarchy, China stepped in supplied weapons and equipment to be used against the King’s political opponents. As the monarch started losing popularity, China began engaging with all political parties, including the Maoist groups.

During the year leading to the 2008 Beijing Olympics, Kathmandu witnessed a spate of Tibetan protests against Chinese authorities. To curb these activities, China began investing heavily in the security system of Nepal and exerting political influence, which became a norm by the time Xi Jinping came to power in China. Indian economic blockade came as an opportunity for China to capitalise on anti-Indian sentiments and increase their political influence in Nepal. Chinese economic investments in Nepal increased substantially since 2015, design of infrastructure development and speeches by senior Chinese diplomats, suggest that they aspire to gain entry into the massive Indian market through Nepal.

China also values Nepal’s support in international forums on issues like the new Hong Kong laws and BRI. Chinese foreign minister meeting his counterparts of Afghanistan, Pakistan and Nepal and spreading the word that it is an Asian Quad, is a case in point. China has couched its real motives behind a façade of being a responsible world power that takes into account the interests of neighbours and allies (Mulmi 2020).

Indian demonetisation of 2016 saw countries like Nepal holding large volumes of demonetised currency. This affected the common Nepalese and the government and so far India could not find a solution satisfactory to Nepal. Such issues weaken India’s soft power considerably, even though this is an outcome of prolonged socio-economic integration between Nepal and India. China takes advantage of such issues to time their soft power diplomatic offensive, like making the Chinese language compulsory in Nepalese schools and offering lucrative scholarships to students and bureaucrats in Nepal. Training and scholarships offered by China to civil servants in Nepal increased from 20 in 2004 to 850 in 2020.

In 2016 India granted Nepal access to Visakhapatnam Port in addition to continued usage of Kolkata Port. Nepal and China signed a historic Transit Protocol in 2019 which came into effect in February 2020, providing Nepal with access to dry ports of Lhasa, Lanzhou and Xigatse and seaports of Shenzen, Tianjin, Zhanjiang and Lianyungang. The nearest of these, Tianjin is 3300 km from Nepal, whereas Kolkata is only 750 km, making the transit protocol economically unviable. Despite this, Chinese action was very popular in Nepal and dislike for India increased further (Jose 2020).

On 21 October 2020 Nepal’s Prime Minister met Secretary of India’s Research and Analysis Wing, which was criticised even by his party. Oli clarified that he met Goel as a special emissary of Indian PM and not as Secretary R & AW. Indian Army Chief visited Nepal within a month after Goel and a visit by Foreign Secretary Harsh Vardhan Shingla is scheduled soon. Whether such engagements will re-start a process of improving India – Nepal relations remains to be seen (Ghimire 2020).

Nepal is an economically weak country in need of financial support from abroad. China is in a position to provide considerable support without any qualm of propriety and India cannot match up to that. Hence, for the time being, China will retain more political clout than any other country, in Nepal. At the same time, China’s ulterior motive in investing in Nepal is to gain entry into the Indian market, which can be seen from the infrastructure being developed towards the Indian borders in Nepal. Sooner than later, China will encourage Nepal to improve relations with India so that the connectivity is extended into the rest of South Asia and the Indian Ocean. Apropos, Nepal – India relations are likely to improve in future.

Works Cited

Muni, SD. 1973. Foreign Policy of Nepal. Delhi: National Publishing House.

Upadhya, Sanjay. 2012. Nepal and the Strategic Rivalry Between China and India. Routledge.

Reeves, Jeffrey. 2012. “China’ Self-defeating Tactics in Nepal.” Contemporary South Asia 20 (No 4): 525.

Zhengduo, Huang, and Li Yan. 2010. “China and Nepal Economic and Trade Cooperation: Present Situation, Problems and Counter Measures.” South Asian Studies Quarterly 67.

Upadhya, Sanjay. 2012. Nepal and the Geostrategic Rivalry Between China and India. Routledge.

Lama, Jigme Yeshe. 2013. “Securing Nepal in South Asia.” Institute of Peace and Conflict Studies, Issue Brief # 232.

Muni, SD. 1973. Foreign Policy of Nepal. Delhi: National Publishing House.

Sharma, Buddhi Prasad. 2018. “China-Nepal Relations: A Cooperative Partnership in Slow Motion.” China Quarterly of International Strategic Studies 4 (3): 439-440.

China, Ministry of Foreign Affairs of the People’s Republic of. 2000. November 15. Accessed May 4, 2020.

Muni, SD. 1973. Foreign Policy of Nepal. Delhi: National Publishing House.

Khadka, Narayan. 1992. “Geopolitics and Development: A Nepalese Perspective.” Asian Affairs: An American Review, Vol 19, No 3 (Taylor & Francis) 139-140.

Muni, SD. 1973. Foreign Policy of Nepal. Delhi: National Publishing House.

Sharma, Buddhi Prasad. 2018. “China-Nepal Relations: A Cooperative Partnership in Slow Motion.” China Quarterly of International Strategic Studies (World Century Publishing Corporation and Shanghai Institutes for International Studies) 4 (3): 443.

Muni, SD. 1973. Foreign Policy of Nepal. Delhi: National Publishing House.

Nepal, Kingdom of, and the People’s Republic of China. 1961. “Boundary Treaty Between the Kingdom of Nepal and the People’s Republic of China.” Peking, October 5. 1.

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Cowan, Sam. 2015. “The Indian Checkposts, Lipulekh and Kalapani.” The Record, December 14: 14.

Muni, SD. 1973. Foreign Policy of Nepal. Delhi: National Publishing House.

Lama, Jigme Yeshe. 2013. “Securing Nepal in South Asia.” Institute of Peace and Conflict Studies Issue Brief #232.

Hong-Wei, Wang. 1985. “Sino-Nepal Relations in the 1980s.” Asian Survey (The Regents of the University of California) XXV (5): 514.

Muni, SD. 1992. India and Nepal: A Changing Relationship. Delhi: Konark Publishers Private Ltd.

—. 1992. India and Nepal: A Changing Relationship. Delhi: Konark Publishers Private Ltd.

Mulmi, Amish Raj. 2020. “What does China want from Nepal.” The Kathmandu Post, November 19.

Jose, Jelvin. 2020. Commentary 5387, Kathmandu: NIICE.

Ghimire, Yubraj. 2020. Nepal-India Relations: A View from Kathmandu. Neighbourhood first series, New Delhi: Institute of Peace and Conflict Studies.



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Vinod Kumar

Jan 08, 2021
General Chandran is an authority on matters concerning China. In this well researched article, he succinctly brings out the nuances of India's relationship with its neighbours- China and Nepal!

Ajay Ramdev

Dec 16, 2020
Sir. As always a thoroughly researched and well articulated facts on changing dynamics between Indo Nepal relations. Enjoyed reading it. All the best for future writings. Regards

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