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On May 8, an 80 km-long road in the Himalayas was virtually inaugurated by India's Defence Minister Rajnath Singh at the Lipulekh pass. The Nepali government challenged instantly, reasoning that the road crosses areas it claims as its own and blaming India of changing the status quo without conciliatory meetings.
On June 15, violent clashes broke out between Indian and Chinese soldiers along the border in the Galwan Valley of the Ladakh region, claimed by both India and China. Dozens of Indian soldiers were killed and Chinese casualties were unknown. India and China have been steadily increasing the number of their troops on either side of the line of actual control (LAC). There were reports of Chinese troops now retreating 1 km from where skirmish took place between the armies.
Since that conflict, India has systematically stationed military troops in the Kalapani area further to the west where the borders of Nepal, China and India meet. But Nepal argues that the Kalapani region lies within its territory. Amid the latest tensions between India and China, Nepal is furious that its own border dispute with India could be sidelined.
Nepal's tough posturing against India, in recent times, may also have to do with Prime Minister KP Sharma Oli, and the Communist Party of Nepal (CPN) co-chair, Pushpa Kamal Dahal Prachanda's tussle for power in the Himalayan state.
Even before the boundary row with India, Prachanda had demanded Oli's resignation, citing the inability to deal with the COVID pandemic, and governance failure. The dispute over Kalapani, Lipulekh and Limpiyadhura – which was adopted in Nepal's new map – presented the Oli government the unique opportunity to divert the internal party feud to a nationalistic agenda, and unite the entire country over it. But it could not save him from facing the imminent threat and challenge from within his own party.
Both Oli and Prachanda have resisted taking extreme steps. While a split in the NCP seemed inevitable just a few days back when Oli even met with NC President Sher Bahadur Deuba – possibly to seek the latter's support in case of a party split – the second generation leaders of the NCP have been active to stop it, and have urged Oli to seek agreement through some compromise with Prachanda.
On the other hand, Prachanda, who took a strong position and rebuked the PM for his remark that India and some leaders in Nepal were trying to 'dislodge' his government, now seems to be working on accommodation and rapprochement to generate a mid-way end to the impasse.
Meanwhile, the 'China factor' seems to be weighing heavily on Nepali politics yet again. The Chinese envoy to Nepal, Hou Yanki, was seen running through a series of meetings in the last few days with the Communist leaders.
Like earlier in April when China played a key role in saving the NCP from a virtual split, this time around too it has expressed concern regarding the political rift. The Chinese ambassador held a meeting with President Bidya Devi Bhandari on Sunday, 5 July, and immediately met former PM and senior leader Madhav Kumar Nepal, and inquired about the intra-party dispute.
Since the 2015 blockade from India in the wake of the Madhesh Movement that came immediately after the devastating April earthquake in Nepal, the Communist Party has maintained a stronghold in the country. PM Oli is perceived to be a nationalist leader as seen recently, when the entire country threw unprecedented support behind him to adopt a new map – including the three territories claimed by India. Prachanda, who is seen as a replacement for Oli, also does not enjoy very good relations with India.
Soon after becoming the PM after the end of the civil war, the Maoist party chief took anti-India posturing, and when he had to step down over the Katawal row, he had said that it was at the behest of a 'foreign master' implying India.
Prachanda has also stood against the American MCC (Millennium Challenge Corporation) grant to Nepal, which has been seen as his effort to please China, who views MCC as being opposed to its own BRI initiative with Nepal. Nepal signed the BRI in May 2017. The BRI commitments were made between August 2016 and May 2017 when Prachanda was PM for the second time.
Also, Prachanda untied his coalition with the NC before the last elections, a partnership that India was perceived to be behind then. Thus, the Maoist merger with the then CPN-UML itself was a step contrary to Indian advise.
Nepal's claim to the region and the Lipulekh pass stems from the 1816 Treaty of Sugauli it entered with the British colonial rulers that defined its western border with India at the end of a two-year-long war. Most recently, a Sino-Indian trade pact in 2015 mentioned the Lipulekh pass as the tri-junction between Nepal, India and China – without consulting Nepal. Because of this, what has been a historic bilateral issue between Nepal and India over the Kalapani region has been transformed into a trilateral one.
As a small but independent and sovereign country, Nepal has few options to resist the territorial ambitions of India and China. It must tread carefully and deploy all its political and diplomatic capital to start a dialogue with both Asian superpowers to reach a comprehensive and amicable agreement.
Unlike Nepal-India border tension, Nepal and China have long since settled their border. The Nepal-China Boundary Agreement and Boundary Treaty were signed on March 21, 1960 and October 5, 1961, respectively. The Nepal-China border demarcation would not have settled without China's lead. In a similar manner, India needs to be a leader in finding a perpetual and technical solution to all borders tension with its friendly neighbour Nepal.
Nepali nationalists may like to believe that passing a constitutional amendment, roping in the support of China or internationalizing the issue at the United Nations will force India to back down. But it is doubtful that any realist in Kathmandu, especially Prime Minister Oli, is under the illusion that New Delhi will cave in to any such demands or coercion. This is why despite all of its political rhetoric and pressure, the Nepali government has always continued to emphasize the importance of a diplomatic dialogue.
The sooner India settles this dispute with Nepal, the lesser the chances for China to get involved. Beijing has chosen to remain quiet this time, but its future calculation may change. The Kalapani dispute between India and Nepal is also an almost perfect mirror case of the 2017 Doklam crisis between China and Bhutan, where India stepped up and deployed its military forces to restore the status quo ante.