Nepali Prime Minister K.P. Sharma Oli (L) with Indian Home Minister Rajnath Singh after his arrival at Indira Gandhi international airport in New Delhi on Friday. Photo: AFP/MONEY SHARMA
Nepalese Prime Minister K P Sharma Oli (left) with Rajnath Singh, now Indian defense minister, in 2018. Photo: AFP / Money Sharma

Amid a bewildering global health crisis, a tiny northwestern corner of South Asia has hogged the limelight recently. The attention is due to a rare collaboration between two Asian powerhouses – China and India. Construction of a road by India through the sparsely populated mountainous Lipulekh area has stoked a major dispute between Nepal and its two neighbors. 

On May 8, Indian Defense Minister Rajnath Singh announced the inauguration of the road built by the Indian Army via his personal Twitter account. He expressed his pleasure to be able to connect India to the Mansarovar area in China. The tweet also included pictures of him seated alongside various senior military officials and bureaucrats in his office and the pictures of the recently built road. 

For the last several years, there had been a dispute between Nepal and India over the ownership of Lipulekh. Nepal has maintained that the area is its territory.

In the midst of this debate, Indian Prime Minister Narendra Modi visited China in May 2015. Although there were several agreements between the two countries during that visit, the one that grabbed headlines was the agreement to link India and China through roadways via Lipulekh.

Immediately after the agreement, Nepal protested to both India and China, claiming that the area that was being used to link the two countries fell under its territory. Kathmandu also claimed that their bilateral agreement could not be fulfilled without the knowledge and consent of Nepal. 

India’s and China’s snub

The South Asian Association for Regional Cooperation (SAARC) has been stagnant for number of years because of the acrimonious rivalry between India and Pakistan. Nepal currently happens to occupy the rotational presidency of SAARC. For almost four years, India and China completely ignored the written objections submitted by a country that held the SAARC presidency.

Four years on, when Nepal realized the completion of the road joining the India and China, it was alarmed. After the recent inauguration of the road, Nepal immediately summoned the Indian ambassador to the Ministry of Foreign affairs and handed him a démarche on May 11.

After realizing that the two major competing Asian countries that wield great influence in Nepal had snubbed its concerns and complaints, the co-president of the ruling Nepal Communist Party (NCP) of Nepal (also former prime minister), Pushpa Kamal Dahal, issued a bold statement aimed at both neighbors. Nepal’s prime minister and the other party president, however, have remained astoundingly reticent. 

Calamitous convergence

Although India and China are connected through various borders, most of them have festering disputes. Most of India’s northern states of Ladakh, Himachal, Uttarakhand, Sikkim and Arunachal border China. A majority of these borders are disputed and have heavy military deployments on both sides.

Aside from this, there is still a major dispute between them over the road built by China to reach Pakistan under the China-Pakistan Economic Corridor (CPEC) project. In 2017, China also made an audacious attempt to sideline India and make ingress into Bhutan. India was rudely awoken in the Doklam area by this Chinese attempt. India was compelled to deter the Chinese attempt to make inroads into Bhutan by making its military presence strongly felt. 

The Lipulekh region that Nepal claims as its territory is the only border region where there are no disputes between the two Asian giants. China has no deployment there, but India does. For that reason, this area became a convenient area for the two countries to connect via road. Additionally, a relative lack of geographical barriers makes this pathway less circuitous than alternative routes.

This connection also greatly reduces the distance from Delhi to the India-China border. From the Indian town of Pithoragarh through Lipulekh up to China, the road is about 170 kilometers long.

For India to connect with China through a direct roadway is propitious both for strategic and economic reasons. This connection allows India to import Chinese goods at a cheaper rate and export its products to China easily. Last year, India’s trade deficit with China was about US$54 billion. With the newly built linkage, however, India aspires to utilize it to export its products to China to reduce the trade deficit.

Since this is trilateral junction among Nepal, India and China, this holds great strategic significance for India in particular. The Indian strategic outlook seems to be motivated by the desire to retain that area because in case things turn sour with China, it plans to use its military deployment there to their advantage. 

For China, however, it is the economic incentive that impels it to link with India. China salivates at the market opportunity in India.

For multiple reasons, China has not managed to get the foothold it seeks in the Indian market. The historical enmity that lingers from the 1962 war coupled with the geographical barriers has served to limit China’s access to the Indian market.

When India proposed the opening of the Lipulekh Pass roadway, it had a natural appeal for China. Therefore, even at the risk of antagonizing Nepal, with which it has managed to cultivate deeper political ties in the last several years, China gravitated toward the Indian proposition mainly to fulfill its economic imperatives. The Chinese aspiration has always been to reign supreme in the India market. 

For the last several years, countries like Nepal, Maldives, Sri Lanka, Bangladesh and Afghanistan have in effect become playgrounds for great-power competition between these two countries. Whether it is the internal political dynamics, investment or cultural influence, the two countries have vigorously jockeyed to expand their influence while negating or diminishing each other’s influence across the South Asian region.

China has, however, emerged more successful in challenging and even dislodging India from its influential pedestal in the South Asia. Deterred, disgruntled and disillusioned by India’s hegemonic hubris and its imperialist machinations, the countries in the region have gravitated toward China’s umbrella, primarily to balance India. 

The other interest China has in this case is its flagship Belt and Road Initiative (BRI). Aside from Bhutan and India, the only two countries that have rejected the BRI, all other countries in South Asia have agreed and have jumped aboard the BRI bandwagon. In South Asia, Pakistan, Bangladesh, Maldives and Sri Lanka have already begun to reap the economic benefits of BRI through the increase in economic investments, economic assistance, cheap loans and signature projects. 

While most of these countries are in the pursuit of balancing Indian and Chinese economic, political and strategic interests, Nepal, devoid of uniformity in national interest, has had difficulty stabilizing these external influences. Rather, it has unceremoniously succumbed to these external influences and vacillated between these two poles, resulting in acute insecurity and instability over the last several years. 

In this cutthroat competition between these two powers, however, the issue of Lipulekh appears incongruous. For Nepal, which has been afflicted by the great-power rivalry between these two countries, their sinister and surreptitious alignment in the Lipulekh case certainly comes as a major strategic surprise. The two countries seem to have come to terms in exploiting Nepal’s remote and rugged terrain to their strategic and economic advantage.

After the uproar in Nepal over this issue, countries across South Asia are now keenly observing how Nepal will manage to resolve this prickly issue with its two giant neighbors. Nepal’s case will be pivotal in assisting them to formulate a befitting balancing strategy for their respective countries.

Choodamani Bhattarai

Choodamani Bhattarai is an MS student of homeland security at the University of the District of Columbia and the editor of Dcnepal Digital Media.