The Indian establishment is of the view that in approaching China for oil in the wake of protests by the Madhesis that have disrupted essential supplies, Nepal had only tried to prove a point that it has other options available to meet its requirements.
However, transporting fuel through the difficult Tibet region will push up costs of fuel 15-20 times, rendering the move economically unviable, Indian government sources said.
Moreover, Beijing would not want too many interactions between authorities in Tibet, with a history of tensions with the Chinese establishment, and Nepal.
Sources said China has been telling Nepal to have good relations with India.
More From This Section
A group of leaders from the Madhesi community on a visit here were told by External Affairs Minister Sushma Swaraj on Sunday that India was for "broadbased ownership" of the new Nepalese Constitution and favoured a "speedy" political solution to the crisis.
The Indian establishment feels, if the issue is not addressed effectively, it may snowball into a "huge problem" in future with the agitation assuming "separatist" dimensions.
Demarcation of boundaries, distribution of political powers and ambiguity in grant of citizenship to Indian women marrying Nepalese men in Terai region were among major issues raised by the Madhesi community.
The view here is that Madhesi community may be willing to take a middle path but the ruling establishment has to show seriousness in addressing the problem and it may be a "tough nut to crack".
They say there are differences in the rights enjoyed by Nepalese born people and naturalised citizens.
The agitation by Madhesis, who have blocked the trading points along the Indo-Nepal border for the last nearly four months, has often turned violent and crippled supplies to the land locked country, triggering acute shortage of essential commodities including fuel and medicines.