Trilateral Cooperation between Nepal-India-China: Prospects and Perplexities (Dining Park, Kathmandu, Nepal )

14 Aug 2017

The Conference was hosted jointly by the Centre for China Analysis and Strategy (CCAS), New Delhi and the Asian Institute of Diplomacy and International Affairs- AIDIA, Kathmandu. It was held on August 14, 2017. Speakers from the Nepalese side called SAARC a failure and described the ‘One Belt, One Road’ (OBOR) an opportunity for economic development for Nepal. While supporting BIMSTEC and investments in railway construction in Nepal, the speakers urged Nepal to reap the maximum benefit from both the Asian giants. India was blamed for the economic blockade of 2015, and one could sense a noticeable shift in the Nepalese perception of PM Modi after the blockade. Bishnu Hari, formerly Nepal’s Ambassador to Japan, said that Nepal should attempt to reap the maximum benefit from China by increasing trade, and cooperation in technology, transport and other sectors. Kathmandu should focus on deepening ties with India by optimising its cultural and social ties with the country. He added that if India does not join the BRI, China will take an alternate route. Stating that India is not joining the BRI because of sovereignty issues related to Pakistan occupied Kashmir (PoK), he said this is a bilateral issue and Nepal has no desire to intervene. But if India really wishes that South Asian countries join it and not join the BRI, then it must take a lead in South Asian affairs, especially BIMSTEC. He said trilateral projects between India-China-Nepal could benefit the region. Tourism should be emphasized and tourists from India and China should be encouraged to visit Nepal. Nepal wants a regional water law, which should include all three parties. India alone cannot invest in Nepal’s railway construction, but he proposed that both India and China should collaborate on this project. Former Finance Minister Madhukar Shumsher Rana, was rather critical of India’s policies and asserted that Nepal should act as an economic corridor for China and India. He opined that Nepal should engage in the BRI to reap maximum benefits from the connectivity it would offer. He supported China’s candidature to SAARC and criticised India’s defence expansion by suggesting that India lacked funds for social development. He appreciated China’s support for building a railway line under Mt. Everest which will go up to Pokhara and then on to Lumbini. Gyanedra Lal Pradhan, treasurer at FNCCI, and Chairman of the Energy Promotion Committee, said that investment from China is easily accessible in Nepal. He said that Nepal must, however, seek to build a closer relationship with India in trade, technology and hydropower. Nepal’s southern neighbor must be urged to expedite infrastructure development. He said that the best deal Nepal signed with India was the Kosi project, which has benefitted Nepal a lot. Nepal stands to benefit only if India and China collaborate, instead of competing with one another. India should think about why Nepal is shifting towards China. He said this is occurring only because Nepal was forced to look for other viable alternatives after the power agreement with India failed, and after the economic blockade of 2015.

From India’s side, President of CCAS, Jayadeva Ranade pointed out that Beijing is not giving such large sums of money without getting something in return. It is for the recipient nations and Nepal to examine whether they are willing to have hundreds of thousands Chinese settle down in their country – there were 740,000 Chinese ‘illegallly’ settled in Africa by 2015 – and whether they would like Chinese-run enclaves to be established or enter into ‘debt for equity’ arrangements which entail surrendering land on long 50 year or more leases to China like Sri Lanka has been compelled to do. Regarding sharing of river water, Mr Ranade said China had not kept its part of the agreement of sharing data on river water flows with India. China appears set on diverting the Brahmaputra River to the north in disregard of India’s concerns and requirements. In the same vein, he agreed that while there could be a lot of economic potential in event of China, India, Pakistan and Nepal cooperating, but asked whether any of them could shed their suspicions. He ruled out any suggestion of such cooperation and did not foresee the possibility of China-India-Nepal cooperation. India is a huge domestic market and possibly today the largest market in Asia where investors could hope for returns.

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