Recently after an alleged wrong move of India over border trade issue of Nepal, apparently Nepal is developing a fresh friendship with China, who is promising new trading facilities to Nepal.

The Indo-Nepal relationship was formally initiated in the 1950s with ‘Indo-Nepal Treaty of Peace and Friendship’, but after 2005 when king Gyanendra came to power, the age old bilateral trade and the economic relationship started to go sour.

Border blockade imposed by India on Nepal
Border blockade imposed by India on Nepal

Recently in 2015, this sourness takes another tough turn at the time of Madhesi crisis when Nepalese government accuses India of purposefully worsening the trade barrier by not allowing vehicles to pass through checkpoints where no protests were held, which India government denied. Some foreign media assumes that border blockade imposed by India on Nepal at the time of Madhesi crisis would be an irreversible shift of Nepal away from India.

Nepalese PM KP Sharma Oli paid his maiden overseas visit to India, two sides signed nine agreements and including one on the utilization of Indian grant of USD 250 Million for post-earthquake reconstruction.

Nepalese Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi
Nepalese Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi

After one month he visited China. While his stay in Beijing, Oli signed a number of bilateral agreements, most important one is on transit facilities through china, thereby a clear indication of the end of India’s monopoly over Nepal’s third country trade. But because of Nepal’s likely to collapse geopolitical position it had no other option but to rely on India, anyhow.

When asked about this new trade relation between Nepal and china, And if Nepal would prefer supply of goods from China to supply of goods from India, Nepal’s Ambassador to India Deep Upadhyay dismissed the comparison and said that India is a far cheaper option than China. There can’t be any comparison between two of them.

India’s Ministry of External Affairs spoke person also has ruled out Nepal choosing China over India, what he said was two third of Nepal’s global trade is with India and 90% of their export/import go through India. And he significantly said that Nepal is “free to explore any practical option it wants in its foreign relation.”

Nepalese PM Oli and President Xi Jinping
Nepalese PM Oli and President Xi Jinping

Although the rocky terrain of Tibet will cost Nepali importers 2-3 times what it would cost them to import via Indian ports. It can be easily assumed that in future Nepal can play the China card to negotiate trade facilities with India.

When asked about the possible negotiation from Nepal, Upadhyay said that that agreement signed between China and Nepal is only due to the acute crisis of cooking gas and petroleum in Nepal. China helped to mitigate the crisis and promised to do so in future. Due to this cooperative gesture of China-Nepal explored other opportunities to strengthen its economic relationship with China. There is no such intention of Nepal to choose China over India.

So, where is the practicality of the agreement between China and Nepal on transit facility? Is that merely to mock India? Or there is more to it than meet the eyes? Nepal will choose China over India or will play the card game at the right time? Should India take this new friendship between its two neighbors seriously?

Only Time will tell.

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