Nepal joins China's Belt and Road Initiative. Why this should concern India
Nepal joins China's Belt and Road Initiative. Why this should concern India
Nepal has agreed to join the Belt and Road Initiative, a pet project of President Xi Jinping, during Prime Minister KP Sharma Oli’s visit to China. The two countries had in 2017 signed a memorandum of understanding (MoU) for Kathmandu to join the BRI, but the process remained at a standstill until now. But why is New Delhi worried about this development?
 "Nepal joins China's Belt and Road Initiative. Why this should concern India")
Nepal has joined China’s Belt and Road Initiative.
Nepal and China signed an agreement for Kathmandu to join Xi Jinping’s pet project during Prime Minister KP Sharma Oli’s visit.
Oli met Xi in Beijing when the two leaders discussed connectivity, industrial development, infrastructural development and trade and tourism among other issues.
Oli, who is on a four-day official visit to China that ends today (December 5) , earlier held a bilateral meeting with his counterpart Li Qiang in Beijing.
“Today, we signed the Framework for Belt & Roads Cooperation. As my official visit to China concludes, I am honoured to reflect on the bilateral talks with Premier Li Qiang, discussions with NPC Chairman Zhang Leji, and the highly fruitful meeting with President Xi Jinping,” Prime Minister Oli posted on X.
The Nepal-China economic cooperation will further strengthen under the Belt and Road Framework Cooperation, he added.
The BRI is a mega connectivity project that connects China with Southeast Asia, Central Asia, Russia and Europe.
But what happened? And why is this a concern for India?
Let’s take a closer look:
What happened?
China and Bangladesh had in 2017 signed a memorandum of understanding (MoU) for Kathmandu to join the BRI.
However, the process has been at a standstill – until now.
The BRI framework agreement was inked by Foreign Secretary Amrit Bahadur Rai and Liu Sushe of the National Development and Reform Commission of China, according to the Prime Minister’s secretariat.
The agreement is expected to pave the way for the implementation of BRI projects, sources said.
According to News 9, the pact outlines a framework under which projects can be finished.
Sources told the outlet the agreement outlines how Nepal and China can plan and coordinate each project. It also states how exactly each project can be financed.
Specific details of the MoU remain under wraps.
Nepal’s foreign ministry wrote on X, “The Government of Nepal and the Government of the People’s Republic of China signed the Framework for Belt and Road Cooperation today.”
Krishna Prasad Dhakal, spokesperson for the Ministry of Foreign Affairs, said in Kathmandu that a nine-point agreement was also signed during the visit, including several memorandums of understanding (MoUs).
Agreements that were signed include an exchange of letters regarding the construction of the Tokha-Chhahari tunnel road near Kathmandu; an MoU on Nepal-China trade promotion, and an exchange of certificates of completion of the renovation of the historic nine-storey palace situated in Basantapur in Kathmandu.
Also, MoUs on protocol relating to the export of thermally processed buffalo meat to China; on development and construction works; on economic and technical assistance; on Chinese language education, and on cooperation in communication technology between Nepal Television and China Media Group were signed.
There was also an exchange of letters relating to aid in cash, he added.
A joint statement issued by both sides on Tuesday said that “the two sides expressed their readiness to sign the MoU on building the Trans-Himalayan Multi-Dimensional Connectivity Network (THMDCN) and the framework for Belt and Road Cooperation between the two governments as soon as possible,” without specifying a distinct deadline.
Both sides expressed their commitment to strengthening connectivity between the two countries in such areas as ports, roads, railways, aviation, power grids and telecommunication, to help Nepal transform from a land-locked country to a land-linked country, said the joint statement.
According to The Kathmandu Post newspaper, the Chinese side had removed the word grant proposed by the Nepali side and suggested replacing it with investment for projects under the BRI.
After reviewing the new terms and conditions, officials found a compromise and decided to include the phrasing aid and technical assistance in relation to project execution in Nepal, the paper said.
The word aid adds ambiguity and marks a step back from the Nepali Congress’ position of clearly specifying grants. Some countries also term line of credit as aid but which are essentially loans, the paper said.
The Chinese side, after going through the document proposed by the Nepali side, removed the word grant’ from the text and added investment’, the paper quoted another Nepali official as saying.
The Nepali side requested and insisted on having the phrasing aid and technical assistance, and the Chinese side responded positively, the delegation member was quoted as saying by the paper.
The BRI had been the subject of much debate and consternation in Nepal ahead of Oli’s trip.
While Oli’s Communist Party of Nepal- Unified Marxist Leninist (CPN-UML) party wanted to go ahead with a loan from China under the terms of the BRI, the Nepali Congress led by Sher Bahadur Deuba was adamantly against it.
“How much loan do we take? If grant, take it now. Let’s not add further burden,” Deuba told Oli during their meeting ahead of the trip, as per Rising Nepal Daily.
Beijing, it seemed, had little interest in giving Kathmandu anything other than a loan.
But Oli, ahead of the China visit, had struck an upbeat note.
“I am embarking on a visit to China on December 2 and it will not just be a tour to a foreign country,” Oli said. “You will know by yourself how the visit became successful after I return home.”
Then, on Sunday, the Nepal government announced that it accepted projects worth $20 million as grant assistance from China ahead of Oli’s first official visit to that country after assuming office for the fourth time.
The Nepali Cabinet also decided to accept $4.13 million of worth projects proposed by the government of China, the government spokesperson said.
It seems like Beijing has solved Oli’s problem back home for him.
Speaking at a programme held at Peking University, Oli later said that Nepal would reap benefits from the Belt and Road Initiative.
He expressed the belief that China has strongly supported Nepal’s development and that the BRI project initiated under the visionary leadership of President Xi Jinping would further deepen bilateral relations between the two countries, the Himalayan Times newspaper reported.
Prime Minister Oli also called Chinese investors to invest in Nepal.
“We will facilitate the investments for realising the national aspiration ‘Prosperous Nepal, Happy Nepali’. We are committed to providing investment security,” Oli said while addressing a programme jointly organised by the Federation of Nepalese Chamber of Commerce and Industries (FNCCI) and China Council for Promotion of International Trade in Beijing on Wednesday.
He also invited Chinese investors to visit Nepal gifted by its natural beauty and seek investment opportunities.
The atmosphere is favourable for investment in Nepal which has made its way towards an era of political stability and prosperity, Oli said.
Why should India worry?
Firstly because Oli broke from the tradition of Nepalese prime ministers visiting India immediately after taking power.Oli himself is thought to be a pro-China leader.
He previously visited China in March 2016 after taking power in 2015.
For India, Nepal’s entry into the BRI is a national security concern.
Already India’s neighbours such as Sri Lanka and Pakistan, who have entered into the BRI, are facing a debt trap.
China has invested in several infrastructure projects in both countries and has racked up credit with both the leaders of Sri Lanka and Pakistan.
And when the project ultimately fails, Beijing simply takes over it over – acquiring yet another asset in a foreign nation.
As Malcolm Davis, senior analyst at the Australian Strategic Policy Institute in Sydney, explained to CNN in the aftermath of acquiring a license on the Hambantota port in Sri Lanka, “There’s a bigger picture here, that the more you invest in the Belt and Road initiative, the more the Chinese are in a position to force your country to align politically in terms of policy.”
“So you become dependent on their investment and their largesse, and you’re less likely to be critical of them and you’re more likely to accommodate their interests strategically.”
India worries that Kathmandu, which has historically been a close ally, would similarly be ensnared by Beijing.
This is all part of what China calls its “string of pearls” strategy to engulf India.
News9, for example, cited the example of an airport in Pokhra – which is around 15 to 20 minutes away from the border via commercial flight – funded by China to the tune of $200 million.
India was forced to shutter its airspace because the airport posed a national security threat.
However, Nepal has brushed aside New Delhi’s worry that China may deploy its military aircraft and helicopters from that airport.
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