India’s Fog of Misunderstanding
Surrounding Nepal–China Relations
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India’s postindependence ties with Nepal were predicated on the intimate cultural and
historical links between the two countries. As India’s first prime minister, Jawaharlal Nehru,
noted, “though Nepal was an independent country, it was very closely allied to India in
culture and tradition and we did not look upon it as a foreign country.” New Delhi also
regarded China as an “interloper” in Nepal in 1950 who threatened India’s security and
interests in the region, ignoring at least a century of Sino-Nepali history centering around
Tibet. This paper argues that New Delhi’s close relationship with Nepal, bound in history
and culture, and the misperception about China’s relations with Nepal before 1950 have
contributed to a skewed understanding of Sino-Nepali relations. The Working Paper looks
at the impact that New Delhi’s misperceptions of Sino-Nepali relations, termed the “fog of
misunderstanding,” has had in the context of the triangular relations between China, India,
The paper is divided into four sections arranged chronologically. The first section looks at the
historical Sino-Nepali relationship from the mid-eighteenth to the mid-twentieth centuries.
It establishes that this early relationship was centered on Tibet. While the Gorkha kings of
Nepal sought to preserve their trade privileges in the region, the Chinese were concerned
about the security of their southwestern frontier. Notably though, Beijing’s concern with
security does not appear to have extended into any desire to conquer Nepal. This section also
touches upon British India’s policy toward Nepal in the nineteenth century, and the subsequent approach that the government of independent India took in the first few years, without an adequate appreciation of Kathmandu’s history with China. As a consequence, India
developed a suspicious attitude toward Beijing’s desire to re-establish ties with Kathmandu
after the Chinese Civil War, and shaped its policy toward Nepal with this factor in mind.
2 | India’s Fog of Misunderstanding Surrounding Nepal–China Relations
The second section delves into Indian and Chinese policies toward Nepal in the period from
1955 until the end of the monarchy in 2008. It showcases how, during this long period,
the three kings of Nepal sought to leverage their ties with China in order to maintain some
semblance of balance and how China, in turn, followed a limited but strategic approach that
was centered on the kings. The fog of misunderstanding continued to shroud India’s attitude
to Nepal-China relations during this period and, consequently, India’s Nepal policy lacked
a working template to manage relations with a smaller neighbor sandwiched between India
and China in a way that would preserve New Delhi’s influence in a positive way. In contrast
to China’s political approach, New Delhi fluctuated between the monarchy and an assortment of democratic political parties, suggestive of a provincial approach in New Delhi’s
dealing with Kathmandu. As a result, China’s approach ensured that its main objective in
Nepal, namely the security of its southwestern frontier, was secured with a relatively low-risk
and low-cost strategy.
The third section deals with the aftermath of the fall of the Nepali monarchy, 2008 to 2016.
During this important period, New Delhi had a fresh opportunity to reset ties by providing
the support to democratic forces in Nepal, that could have resulted in a transformation of
the Indo-Nepali ties. However, India appeared to hew to its traditional policy. China, on the
other hand, quickly built new ties with the post-monarchical dispensation. India’s perceived
actions as a result of the adoption of the new constitution of Nepal plunged Indo-Nepali ties
to a nadir. It seems to have pushed Kathmandu to strengthen its relationship with China.
This section of the paper also outlines the changing nature of China’s policy and objectives
in Nepal, especially in the second decade of the twenty-first century, and its possible implications on the future course of the triangular relationship, as well as for India-Nepal relations.
It postulates that under President Xi Jinping, China’s policy toward Nepal has shifted from
protecting its periphery to a broader goal of bringing Nepal under its strategic control. This
section highlights the political and economic levers that Beijing is using to build a preeminent position in Nepal.
The paper concludes with an assessment of options available to all three countries going
forward, and India’s options in Nepal in the face of China’s new policy in the region. It
suggests that a decisive reset in policy toward Nepal is required to restore healthy relations
that are based on mutual respect and mutual sensitivity. New Delhi may need to re-orient
its thinking toward Nepal in the context of triangular relations, including on the boundary
issue and the 1950 Treaty of Peace and Friendship that have been long-standing irritants
in the India-Nepal relationship. Nepal, for its part, should also reflect carefully on whether
its leveraging of China might become counterproductive in the light of changing strategic
balance in its vicinity, and the implications of giving up the policy of balance for one that
tilts decisively toward Beijing. The paper concludes that there is sufficient scope and opportunity for course correction by India, and that through sustained efforts India may be able
to preserve its influence and security in Nepal and counter China’s expanding footprint
Anil Sigdel, China’s Growing Footprint in Nepal: Challenges and Opportunities for India, ORF Issue Brief,
October 3, 2018.