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Nepal and Neighbourhood Perspectives

Nepal’s strategic location between India, China, and engagement with the US makes balanced neighbourhood diplomacy essential to safeguard sovereignty, stability, and development amid intensifying geopolitical competition.
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By Dr Dinesh Bhattarai

With the evolution of the global power shift from the Atlantic to the Asia Pacific, Eurasia has gained geopolitical importance. “Eastern region of Eurasia- Asia- has lately become a vital center of economic growth and its rising political influence,” wrote Zbigniew Brzezinski in 1997. He described Eurasia as a “chessboard on which the struggle for global primacy continues to be played and that struggle involves geostrategy-the strategic management of geopolitical interests.”



This shift is mainly based on the economic transformation of Nepal’s immediate neighbours, India and China. With 2.5 billion people constituting about 40% of the world’s population, which is as much as the population of the next 20 largest countries combined, Asia has emerged as the most important geopolitical region for the 21st century. As the century-old saying goes, “Where you stand depends on where you sit,” Nepal, seated between two major and emerging global powers with nuclear weapons, facing the growing strategic interests of the world's superpower, the United States, finds its relations with them to be of paramount importance. This reality makes the conduct of its foreign policy extra sensitive and serious. 


Nepal’s neighborhood policy


Nepal has been living with its immediate neighbors- India to the South and China to the North for centuries. Throughout its history, Nepal has seen its rise and transformation.  In the past, the Mughals and British ruled India as well as successive Chinese dynasties and governments in the north. They have always been large and influential actors. Nepal’s future cannot be divorced from its geographical position. “Geography is as it is,” wrote Nicholas John Spykman, “it does not make any argument.” Geography imprisons leaders, giving them fewer choices and less room to maneuver.


In the context of rapidly shifting global strategic scenarios, India and China have emerged as major global powers, ranking among the world’s second and fourth largest economies with the largest and second largest populations respectively.  Their growing economic weight, strategic influence and global reach have increased the geopolitical importance of Nepal’s location, attracting heightened attention from both of these neighbours and from countries beyond the region.


Neighbours constituted the most important component of Nepal’s foreign policy.  On May 9, 2014, addressing the Diplomatic Corps in Kathmandu, the then Prime Minister Sushil Koirala categorically underlined the priorities of Nepal’s foreign policy. He said Nepal's “foreign policy priority begins with neighboring countries. We remain firmly committed to strengthening relations and widening areas of cooperation for mutual benefit. It has been our consistent policy not to allow Nepali territory to be used to the detriment of the security interests of our neighbors.” He added, “Nepal's proximity to two powerful ancient civilizations, fastest growing economies and rising global powers gives it a great future ahead and vast opportunities to translate the rich potential of hydropower, agriculture, tourism and biodiversity in the trans-Himalayan  region into concrete advantages for common benefit.” 


Underlining broader foreign policy goals, the then Prime Minister said that Nepal “will remain focused and constructively engaged with our friends and development partners and all other friendly countries to enhance cooperation in mutually beneficial areas.”


India’s neighborhood policy


Prime Minister Narendra Modi’s “neighborhood first policy” became a top priority as reflected in his invitation to the heads of state/government of the member countries of the South Asian Association for Regional Cooperation (SAARC) to attend his swearing-in ceremony in May 2014. This gesture reaffirms the importance of neighboring countries in India’s foreign policy and their role in contributing to the establishment of a stable foundation for peace, cooperation and regional integration in South Asia and beyond. Right in his first term, PM Modi said, sab kasaath, sab kabikas (together with all, development for all). He formulated his foreign policy doctrine based on what is called Panchamrit, consisting of five pillars: dignity, dialogue, shared prosperity, regional and global security, cultural and civilizational linkages aimed at promoting India’s position as a rising power in the world. During his visit to Nepal from August 3-4, 2014 –the first by an Indian Prime Minister in 17 years- he introduced the acronym “HIT” in his address to the Constituent Assembly - meaning Highways, Information ways (information technology and digital connectivity) and Transways (transmission lines and railways)aimed at enhancing connectivity in Nepal.


Civilizational ties between Nepal and India were formalized with the establishment of diplomatic relations on June 13, 1947. Ever since its independence in 1947, the principles of the Panchsheel have constituted the bases of India’s foreign policy.  India’s first Prime Minister Jawaharlal Nehru placed greater emphasis on international cooperation and Asian leadership. Prioritizing integrated neighborhoods to advance economic and security interests was considered essential for India’s national security and economic development, and facilitating its rise as a global power.


The construction and inauguration of the Motihari-Amlekhgunj pipeline, the first cross-border oil pipeline in South Asia, in 2019, was a part of this policy. Integrated Check Posts (ICPs)are being constructed along the Nepal-India border. The Modi government showed its commitment to supporting neighboring countries through vaccine diplomacy during COVID-19. Several development projects in the neighborhood are also considered a part of the neighborhood policy.


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Earlier, the Gujral doctrine –named after India’s Prime Minister Inder Kumar Gujral who sought friendship, was based on sovereign equality and non-interference, with “non-reciprocal magnanimity” towards smaller countries such as Bangladesh, Nepal, and Sri Lanka. PM Atal Bihari Vajpayee said, “Friends can be changed but not neighbors.” PM Dr. Manmohan Singh wrote, “A politically unstable and economically deprived periphery will always keep India preoccupied and constrain its regional and global role.” He was of the view that “The real test of foreign policy is in the handling of neighbors.”  This amply demonstrates the necessity of peace, stability and tranquility in the neighborhood for economic development.


Nepal-India relations are multidimensional, deep and extensive, though they are not without complexities. People- to -people ties are among the most dynamic aspects of this relationship. No aspect of national life on either side of the open border is left untouched by bilateral relations. These relations are precious and must be nurtured with great care and a strong sense of history.  Yet several irritants have accumulated due to growing mistrust, misunderstandings, confusion and dogmatism over the years. There is a fear that accumulated seeds of dissatisfaction are extinguishing the ray of hope and overshadowing the potential of Nepal-India relations.


India remains sensitive about developments South of the Himalayas. It tends to view any foreign presence in Nepal with suspicion. India’s approach towards Nepal is often perceived as patronizing, treating it as its backyard and sphere of influence. This has generated considerable resentment in Nepal. Leaders in Nepal often tend to attribute domestic problems to India and perceive it as a source of many of Nepal’s challenges. These perceptions need to be understood from a broader and more balanced perspective by both sides to make necessary corrections. 


While India is a significant factor in Nepal’s international relations, Nepal is no less important for India’s foreign policy, as it is listed as a “priority partner” in India’s neighbourhood first policy.  Immediate tasks for both countries include restoring trust and nurturing it. Agreed projects remain unimplemented for years and even decades, creating a crisis of confidence. Nepal has faced several coercive measures including economic blockades, the most recent in 2015 following the promulgation of an inclusive and democratic constitution through an elected Constituent Assembly in line with international norms and practices.  Nepal and India agreed to set up an Eminent Person Group (EPG), which worked for two years and submitted its joint report. Its status, however, remains unknown for years. Such developments generate mistrust and disconnect and disorient the future generation.


The open border between Nepal and India allows people from either side to enter the other’s territory without formalities. India fears that Pakistani intelligence agents are misusing the porous border to create trouble in India. In view of the proliferating “problems without passports”, some form of regulation and monitoring at the border is necessary for both countries. This should be carefully designed so as not to cause inconveniences to the people living in border areas.


Sustained diplomatic engagements, exchange of visits at various levels focused on building trust and mutual confidence, operationalization of all mechanisms put in place to boost neighborliness will be critical to the success of the “neighborhood first policy”. Additionally, regional connectivity initiatives, such as infrastructure cooperation and the promotion of economic linkages, should emphasize the establishment of common interests.


China’s neighborhood diplomacy


China considers a neighbor is better than a distant relative. A friendly, peaceful and stable periphery is essential. Early on, addressing the Geneva Conference on April 28, 1954, Chinese Premier Chou En-lai made a highly significant plea for solidarity, urging the countries of Asia to “consult among themselves with a view to seeking common measures to safeguard peace and security in Asia.” 


Nepal established diplomatic relations with China on August 1, 1955, on the foundation of the Five Principles of Peaceful Coexistence (Panchsheel).  Premier Wen Jiabio said in 2003, “Peace-loving has been a time-honored quality of the Chinese nation.” A year later, President Hu Jintao declared, “China since ancient times has had a fine tradition of sincerity, benevolence, kindness and trust towards its neighbors.”


After its reform and opening process in 1979, China registered unprecedented economic progress and narrowed the power gaps between the US and China. In recent years, Beijing has been expanding its political, economic and diplomatic footprints across South Asia and beyond, through infrastructure development projects under the Belt and Road Initiative (BRI). 


Addressing a seminar on neighborhood diplomacy, President Xi Jinping said, “good diplomacy with neighboring countries is a requirement for realizing the Two Centenary Goals and the Chinese Dream of the rejuvenation of the Chinese nation.”  He said: China values its friendship and cooperation with neighbors and takes improving these relations as a foreign policy priority. Addressing the Conference on Neighbouring States Diplomacy in 2013, the President expressed his firm belief that “for a state to rise, it must first rise in the region to which it belongs. If it cannot establish a favourable regional order, building good relations with a distant country will be of limited use.”


President Xi further outlined the broader scope of China’s foreign policy with its neighbouring countries, and he said, “We must strive to make our neighbors more friendly in politics, economically more closely tied to us, and we must have deeper security cooperation and closer people-to-people ties…. Cooperation with neighbours should be based on … a close network of common interests….” and should“become the shared beliefs and norms of conduct  for the whole region.” 


Kevin Rudd, former Prime Minister of Australia who is well-known to have a profound understanding of Chinese politics, diplomacy and culture, interprets it “to induce behaviours on the part of neighbouring states that were more compliant with Chinese national interests and values.”  Foreign Minister Wang Yi said, China would “consider more favourably the interests of those neighbouring and developing countries that have long been friendly to China.”  In 2014, addressing the Conference on Interaction and Confidence Building Measures in Asia (CICA), President Xi outlined the Asian Security Concept and said, “It is for the people of Asia to run the affairs of Asia, solve the problem of Asia and uphold the security of Asia.” China shows remarkable consistency in China’s foreign policy going back to Chou’s proposal of Asian solidarity, questioning the long-standing security role of non-Asian powers in Asia.


Nepal and  the United States of America:


After the British quit India on August 15, 1947, it changed the balance of power in South Asia. The Rana rulers realized that Nepal should broaden and diversify its diplomatic contacts beyond traditional British India, giving up the policy of isolation in existence for a long.


Nepali goodwill mission was sent to Washington in October 1946 and an agreement concerning diplomatic relations, friendship and commerce was signed by the United States and Nepal on April 25, 1947.  Thus the United States of America became the second country to establish diplomatic relations with Nepal. Rana rulers also sent an application to the United Nations seeking its membership, showing their strategic foresight in the changed context.


Nepal and the United States will mark eight decades of diplomatic relations next year. Over this period, relations between Kathmandu and Washington have grown steadily and broadened across a wide spectrum of cooperation.  This relationship has been an important dimension of Nepal’s foreign policy, supporting its efforts to diversify diplomatic relations.


King Mahendra visited the United States in 1960 and addressed the Joint Meeting of the two Houses of US Congress on April 28, 1960. The King described the invitation to address as a token of friendship and goodwill toward the people of Nepal who in their turn have nothing but the greatest respect and admiration for the great people and the leaders of the United States of America. In his address the king said, “With the advent of democracy in Nepal things began to change, and since the U.S. Operations Mission was set up in the country in January 1952, our contacts have increased rapidly and hundreds of Nepalese have come to this country for training and studies in various fields."He also praised  the resolution by the US Congress on the successful holding of the first ever parliamentary elections in Nepal in 1959 as “a source of great inspiration and encouragement to the newly elected members of our Parliament in carrying out their duties and responsibilities.”  


When the King said, “Though our two countries are separated from each other by vast expanses of land and water, our diplomatic relations do not even date very far back. There exists between us a lasting moral and spiritual bond that in effect transcends all these material and mundane considerations, a real identity of outlook and views on vital problems of man and society that is derived from common faith in common political principles, ideals and beliefs,” he was greatly applauded. He said, “the freedom of small countries is something which is very dear and close to our hearts.”


The King said that Nepal believes “in an independent foreign policy of judging every international issue on its merits without consideration of anybody's fear or favor and in a policy of non-entanglement.”  He further said, “Our policy of nonalignment… is merely a manifestation of our reluctance and unwillingness to compromise our freedom of judgment and action beforehand by committing ourselves irrevocably to support one side or the other even before the emergence of an eventuality.”


The then Prime Minister B.P. Koirala, who visited New York to address the 15th Session of the United Nations General Assembly, had a meeting with US President Dwight D. Eisenhower in New York City on 22 September 1960. The meeting marked one of the most significant diplomatic engagements between democratic Nepal and the United States.  The two leaders covered several important subjects including the construction of Nepal’s East-West Highway. The Prime Minister emphasized the need for development projects and economic assistance for building infrastructure.  The President shared the Prime Minister’s argument about the “force of the public opinion,” in governance and the need for development to sustain the process of democratization. Koirala explained Nepal’s independent foreign policy and the need to have a balanced foreign policy between two major neighbors, India and China and strengthening relations with the United States and other countries.  Three months after the meeting, the King carried out a coup d’etat dismissing the first democratically elected Prime Minister and dismantling the parliamentary democratic system on December 15, 1960.


The King met the American ambassador on December 21, and said that he had to dismiss the government and imprison its leader because they were guilty of corruption and of aiding and abetting communism. King hoped to maintain friendly relations with all countries, including the United States. Whereas Washington’s reading was that the king’s motives were guided less by the issues of corruption and communism than by a growing fear that “his own personal position and prestige were dwindling and that if he did not act soon, it might be too late.” 


In 1967, King Mahendra sought US support and his policy of gradual, evolutionary modernization at home and neutrality abroad. He wanted to be reassured that the US does not look at Nepal only in the context of their Indian interests. The King was interested in US continued support for Nepal's independence. Washington thinks it essential for Nepal to maintain a balance in its relations with India and China, “offending neither and meeting the minimal requirements of both.” However, the US remained concerned over the signing of an agreement for the construction of a road from Lhasa to Kathmandu.  It viewed it “as increased Chinese Communist activity in Nepal as a likely result of these agreements, as Nepal occupies a strategic position in relation to India and Communist China which far exceeds its other claims to our attention.”


King Birendra visited the United States in December 1983.  Welcoming the King at the White House, US President Ronald Reagan described “Nepal as a neighbor on the other side of the world.” The US President said, “We Americans support the objectives of Your Majesty’s Zone of Peace proposal and we endorse it.” He added that he would only hope that one day the world in its entirety would become a Zone of Peace.” He also said that Nepal “should work closely with her neighbours  to make the Peace Zone proposal a reality.”


In a reply speech to President Reagan’s welcome remarks, the King said, “Seen from Washington, Nepal is almost on the other side of the globe and yet this friendly gathering here tonight shows, distance notwithstanding, friendship and cordiality based on shared ideals can exist between countries that are geographically far apart.  In 1947, the King said, “as soon as Nepal broke her age-old isolation by seeking friendship beyond her borders, it was with the United States of America that Nepal sought to establish her diplomatic relations.” The King described the recognition of Nepal's Zone of Peace proposal as “an important landmark in the history of our relations but also as a testimony of your personal commitment to the cause of peace, stability and freedom.”


US first lady Hillary Clinton visited Nepal in 1995. Prime Minister Sher Bahadur Deuba visited the United States from May 6-11, 2002 and met President George W. Bush at the Oval office. US Secretary of State Colin Powell visited Nepal in January 2002 when the Maoist conflict was at its peak. Visits at various levels have continued to date, further cementing Nepal-US relations.


Living with the inevitable


South Asia remains one of the world’s most important geopolitical areas.  Nepal’s strategic location places it at an intersection of intensifying geopolitical rivalries, drawing close attention from both the established and emerging powers.  China fears that Tibetan refugees in Nepal could become an epicenter of Tibetan agitation. President Xi visited Nepal in 2019 to warn that “anyone attempting to split China in any part of the country will end in crushed bodies and shattered bones.” It reflects China’s heightened concerns of hostile elements using Nepali territory to undermine China’s unity and integrity.  China needs to be fully assured that no hostile elements are allowed from Nepali soil. Increased engagements between Kathmandu and Beijing are New Delhi’s concern. Prudence and strategic foresight rather than policy adventurism should guide the management of the country’s sensitive geopolitics.  Nepal’s neighborhood policy must be guided by geopolitical realities and pragmatic considerations.


Nepal’s peace, security and prosperity is fundamentally dependent upon its relationships with its neighbours.It should also take into account the emergence of powerful economic, political and technological developments which will inevitably affect Nepal’s future prospects.   Nepal needs to do its homework properly to ensure clarity, remain alert about what is happening in the neighborhood and fully understand the gravity of emerging opportunities and challenges. Without thorough preparation and clarity, the country will not be taken seriously. Only on the strong national foundations and sound economic base, Nepal can earn the trust and confidence of its neighbours, friends and well-wishers.


A new generation of leaders is at the helm of national affairs.  This leadership must be firmly guided by the fundamental principles of foreign policy enshrined in the Constitution. Nepal’s excessive dependence on its neighbors further makes it imperative for policy makers in Singha Durbar to navigate the delicate triad of cooperation, competition and rivalry with a strategic foresight so as to safeguard its strategic autonomy, uphold national dignity and accelerate economic development.


This calls for diplomacy of excellent quality. At its core lies the indispensability of a sound, efficient and effective Foreign Service. The Foreign Service must not be considered merely another administrative arm of the state; it is the nation’s eyes and ears in the world, and the first line of defense of national honor, development and security.

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