Bharat is watching carefully every movement of Nepalese leaders. It can’t afford to allow Nepal to take the major benefits from Bharat and sing Chinese songs.
Recent agreement between China and Nepal on petroleum is going to bring new wave of politics in the Himalayan regions. Nepal’s decision to import petroleum is not merely using its sovereign power to trade but a triangular shift on the policy of equi-distance. It is not merely carving for new way to get energy but to annoy its southern neighbour which has been trouble shooter for Nepal all along its journey. Nepal recently reached a Memorandum of Understanding (MoU) with China, the northern neighbour, to import fuel, particularly petroleum products – petrol, diesel and cooking gas. The fuel pact signed between Nepal Oil Corporation (NOC) and Petro China on October 28. In two separate agreements, China has promised to give a one-off 1000 metric tonnes of petroleum products as grant.
There are two major symptoms emerging which could be seen from this agreement. First Nepal is once again playing a role of ‘yam between Bharat and China’ as it has been put by king Mahendra in 1950s. It was he who coined the term of equi-distance policy between Bharat and China. The new configuration of Nepal politics is trying to move away from Bharat and open up to a large extent to China. This looks very obvious especially after KP Sharma Oli becoming the new Prime Minister of Nepal. The second indication is visible from Chinese side. The last few years China has focussed more on its southern neighbours that is Nepal-Tibet border area and looked very lenient in providing economic support to Nepal. Looking these two symptoms, concerns of Bharat become quite legitimate. Bharat does not want to burn its finger in the internal dynamic of Nepalese politics. It has a bitter experience of Sri-Lanka in 1980s and still heats up the water in Tamil Nadu. More than 1800 km. porous boundary runs with Nepal which touches the four most populous states? The fire in Nepal sends smokes in these states. Therefore, Nepal is more complex than Sri Lanka.
Can Nepal-China Petroleum Trade be Sustainable?
Is it possible for Nepal to get the petroleum and energy quest from China? Is it merely a politicking to tease and pressurise Bharat for more accommodative and lenient in its supplying of energy to Nepal? It has been known to world that Bharateeya Prime Minister announced creating a 41 kilometre gas pipeline between Bharat and Nepal in 2014. Prime Minister Narendra Modi, during his first official visit to Nepal in an address to the Constituent Assembly on August 4, 2014, had announced the building of the pipeline that is to serve to improve regional connectivity among the South Asian Association for Regional Cooperation (SAARC) nations. The Union cabinet had recently approved the project.
Though, there was a technical hitch which Indian Oil Corporation (IOC) has put before Nepal. A 41-kilometer long pipeline from Raxaul in Bihar, Bharat, to Amlekhjung in Nepal has been planned with the investment of Rs 200 crore; and an extension of the pipeline to Kathmandu in the second phase.
Problems emerged in this much-awaited venture when the IOC proposed that Nepal should commit to buying petroleum for 15 years from the IOC and the NOC insisted on continuing with the provision of the currently existing five-year renewable pact. Since 1974, Nepal has imported fuel from the IOC under a broad five-year supply pact that is renewed on the basis of mutual understanding.
Nepalese leaders found it Bharat dominance and started using Chinese card. Nepal-China agreement has come out to challenge it. The Nepali political elite sees it as a way of diversifying economic links, and reducing dependence on Bharat. Chinese connections with Nepal are on very high altitude of Himalaya. Nepal’s trade with China is largely through the route of Tibet and Hong Kong. The six points along the Nepal-China border have been opened for overland trade, which are Kodari-Nyalam; Rasua-Kerung; Yari (Humla)-Purang; Olangchunggola-Riyo, Kimathanka-Riwo and Nechung (Mustang)-Legze.
These routes are very high and problematic. Especially after the major tremors which damaged these areas extensively. The average height of nearly 6,100 metres, making natural and normal interactions difficult. Over 90 per cent of Nepal’s border with China runs through snow and glacier. That is how Nepal is scaling the anger and reactions of Bharat. Now the Petroleum Minister of Nepal is saying that Chinese supply is merely a drop in a bucket. “The grant is about 100 tankers of fuel which barely meets our needs for a day or two. Roads are difficult to navigate, especially post earthquake. And in a few months, it would be under snow. Nepal can’t change its geography and neighbours. Therefore, Bharat-Nepal Route is the only way to fulfil the needs of Nepal.
China’s Nepal Policy
After the loss of Tibet as a buffer State in 1950 when China took control over it, Nepal has become strategically important for both the countries. Nepal is the gateway to the sensitive Tibet Autonomous Region (TAR), which plays an important role in China’s South Asia Policy. Tibet issue, which is China’s major security concern, has become a major determinant of Chinese foreign policy towards Nepal. China is concerned about Nepal being used by other external powers to challenge its strategic interests. During the 1960s, there were several demonstrations in Kathmandu as well as in Tibet by Tibetan separatists who had bases in Nepal. This led China to be skeptical on external engagement in Nepal. Nepal has the most accessible entry point to Tibet and it has the second largest Tibetan refugee community in the world. China has traditionally alleged that international forces are operating against China, through Tibetans based in Nepal. That is how China looks into Nepal. It does everything to convince Nepal that there is no need to remain dependent on Bharat. Your northern neighbour is capable enough to cater all your needs. That is how China is reconfiguring its focus on its southern border with Nepal. In the recent years, there has been a gradual shift in China’s focus from the eastern seaboard to the South West China such as Tibet, Quinhai, Gansu, Sichuan, Kunming and Xinjiang, which are immediate neighbourhood of Nepal.
Bharat-Nepal Trade
Bharat has emphasised that the Bharat-Nepal economic and trade relationship stands ‘on its own merit’ and has a ‘natural logic’. Bharat-Nepal economic and trade relation is ‘multi-faceted, diverse, deep, stands on its own merit and has a certain natural logic’. Almost 70 per cent of Nepal’s trade is with Bharat and almost half the foreign investment in Nepal is from Bharat.
The politics of Nepal is polarised. Bharat is watching carefully every movement and action of Nepalese leaders. Bharat can’t afford to allow Nepal to take the major benefits from Bharat and sing Chinese songs. It has to be seen how this new Nepal-China bonhomie will last, will it be sustainable in meeting the demands of energy from the alternative route?
Dr Satish Kumar (The writer is Head International Relations Central University of Jharkhand, Ranchi)
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