Fragile frontiers

India's flawed foreign policies and China's strategic influence have shifted regional dynamics in South Asia, resulting in amplification of security challenges, insurgencies, and geopolitical vulnerabilities, particularly in the Northeast and along the borders of certain neighbouring countries

- DIPANKAR DEY

On December 2, the Nepalese prime minister left for his first bilateral visit to China, a departure from the usual practice by the Himalayan republic's leaders of making India their first official destination. Nepali media reported that Nepali Prime Minister Khadga Prasad Sharma Oli—head of the Communist Party of Nepal Unified Marxist-Leninist (CPN-UML), who returned to power in July after two earlier stints as premier—chose Beijing as his first destination due to the absence of a formal invitation from New Delhi.

Moreover, Oli has favoured Beijing to reduce the country's historical reliance on New Delhi. India accounted for nearly 65 per cent of Nepal's total trade in the 2023-24 fiscal year, according to customs data. By contrast, China's trade share was about 15 per cent, though Chinese companies lead in some industries including a 70 per cent share of Nepal's electric vehicle market.

Nonetheless, India has the highest foreign investment in Nepal, pumping in more than USD 750 million last year, with China investing more than USD 250 million, according to Nepal's central bank.

Nepal and China on December 3, 2024, signed a nine-point agreement as Prime Minister KP Sharma Oli met President Xi Jinping in Beijing.

Agreements that were signed, among others, include an exchange of letters regarding the construction of the Tokha-Chhahari tunnel road near Kathmandu; an MoU on Nepal-China trade promotion, and an exchange of certificates of completion of the renovation of the historic nine-storey palace situated in Basantapur in Kathmandu.

China and Nepal have also signed the framework for Belt and Road Cooperation.