Why in News

• Nepal is facing a political crisis after the resignation of PM K.P. Sharma Oli, violent protests, and the swearing-in of former Chief Justice Sushila Karki as interim PM.

• This churn presents a strategic test for India’s Neighbourhood First Policy, as India must safeguard its interests while avoiding perceptions of interference, even as China deepens influence in Nepal.

Nepal’s Political Turmoil: A Test Case for India’s Neighbourhood First Policy

1. India–Nepal Relations

• Geostrategic Importance

• • India shares a 1,770–2,000 km open border with Nepal.

  • Free movement of goods and people means political instability directly impacts Indian security.

• Cultural and Civilisational Ties

• • Shared Hindu–Buddhist heritage.

  • Strong people-to-people links, especially with Madhesi population.

  • Gorkha regiments serve in the Indian Army.

• Economic Interdependence

• • India is Nepal’s largest trade partner and investor, accounting for about 60% of Nepal’s trade.

  • Supplies fuel, medicines, and electricity.

  • Major source of FDI.

• Hydropower Diplomacy

• • Cross-border power trade agreements in place.

  • India invests in projects like Upper Karnali and Arun-III.

• Security Stakes

• • Political vacuum may lead to:

    • Cross-border smuggling

    • Fake currency networks

    • Growing Chinese presence under the Belt and Road Initiative (BRI)

2. China’s Growing Footprint in Nepal

• BRI Investments

• • Infrastructure projects like highways, airports, and Tibet–Kathmandu railway.

• Political Leverage

• • Beijing maintains ties with all major Nepali political parties.

  • Has mediated intra-party disputes, for example in the CPN.

• Soft Power Expansion

• • Promotion of Chinese language.

  • Confucius Institutes, scholarships, and media outreach.

• Security Concerns for India

• • Chinese presence near the Siliguri Corridor (Chicken’s Neck) raises alarms.

3. Concerns for India

• Political Instability

• • Nepal has had 14 governments in 17 years.

  • Frequent coalition collapses disrupt bilateral cooperation.

• Anti-India Sentiment

• • Rooted in events like the 2015 blockade.

  • Perceptions of Indian interference fuel mistrust, especially among youth.

• China Factor

• • Beijing gaining strategic depth in Himalayan geopolitics.

• Border Management Issues

• • Open border facilitates:

    • Illegal migration

    • Arms smuggling

    • Possible terror infiltration

• Economic Fallout

• • Crisis threatens India-funded projects like:

    • Rail links

    • Integrated Check Posts (ICPs)

    • Energy corridors

4. Challenges for India

• Balancing Engagement

• • Over-engagement creates “big brother” image.

  • Under-engagement leaves space for China.

• Youth Disconnect

• • Post-monarchy generation (Gen Z) influenced by anti-India narratives.

• Federal Politics

• • Need to engage beyond Kathmandu with provinces, Madhes leaders, and new political actors.

• Economic Vulnerabilities

• • Political instability affects:

    • Border trade

    • Cross-border hydropower projects

    • Remittance flows

• Security and Refugee Risks

• • Refugee influx likely if crisis escalates.

  • Growing space for Chinese intelligence activities.

5. Way Forward for India

• Diplomatic Engagement

• • Strengthen ties with emerging leaders and provinces.

  • Use Track 1.5 and Track 2 dialogues.

• Economic Diplomacy

• • Speed up border infrastructure and ICPs.

  • Rail connectivity projects: Jaynagar–Bardibas, Raxaul–Kathmandu.

• Energy Cooperation

• • Expand hydropower projects.

  • Push for trilateral power trade between India, Nepal, and Bangladesh.

• People-to-People Initiatives

• • Scholarships, cultural circuits like the Ramayana Circuit, and tourism links.

  • Counter anti-India narratives among youth.

• Strategic Patience

• • Avoid overtly backing political personalities.

  • Focus on institutions, long-term partnerships, and resilience building.

Conclusion

• Nepal’s turmoil is both a challenge and an opportunity for India’s Neighbourhood First Policy.

• India must pursue a calibrated, multi-dimensional strategy that secures its interests without fuelling anti-India sentiment.

• Building economic interdependence, youth-oriented outreach, and energy partnerships will be key.

• A stable, democratic, and prosperous Nepal is ultimately in India’s best interest to maintain balance against China in the Himalayas.