The Indian foreign policy establishment may view with complacency the fact that another new Nepalese prime minister has chosen India rather than China for his first official visit. But that could be a mistake. It's an encouraging sign that Pushpa Kamal Dahal, popularly known as Prachanda, chose to travel to India first, in contrast to the China-first orientation during his first term in 2008. It takes place, however, against the background of China's unhappiness with Nepal over the latter's perceived lack of commitment to the former's ambitious One Belt One Road project along Central Asia. As a result, there is uncertainty over a scheduled visit in October to Kathmandu by Chinese President Xi Jinping.
In New Delhi, though both Indian and Nepalese prime ministers expressed a renewed desire to strengthen centuries-old ties and an open border - some six million Nepalis live and work in India - the tilt towards China has been unmistakable for some years. The blockade on the Indo-Nepal border over a constitutional crisis involving the Madhesis last November did much to sour relations. Nepal suspected that the blockade, which had a damaging impact on a country barely recovering from one of its worst earthquakes in recent times, had unofficial sanction from the Indian government.
Three agreements were signed, one to strengthen road infrastructure in the Terai and two others to facilitate fund flows for post-earthquake reconstruction in Nepal. But these deals address only some of the pending issues. For instance, issues concerning a 1996 hydropower and irrigation project and power-trading agreements, critical to electricity-starved Nepalese, are yet to be sorted out. This needs to be seen in the context of the transit treaty Mr Dahal's predecessor signed with China in March, plus agreements to strengthen road and railway networks that would connect Tibet with Kathmandu. More significantly, Nepal and China also signed a long-term commercial oil supply agreement that ended India's long-standing monopoly. In the immediate future, this is unlikely to affect Indian oil supplies since the cost of trade over the relatively undeveloped Sino-Nepalese border is two to three times that of the Indo-Nepal route. But given China's record of infrastructure construction, in contrast to India's, this barrier may not last for long.
Perhaps the greatest concern is the unresolved issue over the representation of Madhesis, who inhabit the Terai belt in southern Nepal and have strong familial links with Indians in northern Bihar and Uttar Pradesh. Under Nepal's new constitution announced last year, their rights as an ethnic group were deemed to have been weakened, a development that caught Indian intelligence agencies unawares even as violence broke out in Kathmandu. Part of the problem is that the Madhesis are only one of the myriad ethnic groups unhappy with the new constitution and the issue is linked to more complex negotiations within the Nepali political establishment. But that crisis underlined the fact that India can no longer take for granted its big brotherly relations with the Himalayan nation. India needs to take advantage of the opportunity for a reset presented by the recent turn of events.
