China Offers Aid to Nepal, Unsettling India’s Attempt to Woo Back Old Ally

The development is important as it comes on the eve of Nepalese president's India visit next week and it could circumscribe India-Nepal efforts to restore friendly ties after the 2015 blockade.

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New Delhi (Sputnik) – China has offered $1 million humanitarian aid to Nepal besides signing major agreements for cooperation in the exploration of oil and gas with the Himalayan country which has just endured huge economic loss due to heavy floods.

© AP PHOTO/ GURINDER OSAN

India Tries to Reinforce Ties With Nepal While Watching Its Standoff With China

As part of the agreements, China will provide approximately $150 million to Nepal for the repair and reconstruction of the Kodari Highway, destroyed during the 2015 earthquake. China will also fully fund a feasibility study on natural gas and petroleum resources in the mountainous regions and the plains of the Terai. The two sides have also agreed to jointly explore other sectors like tourism. China has designated 2017 as the Nepal Tourism Promotion Year.

The move has irked India as it comes just ahead of Nepalese Prime Minister Sher Bahadur Dueba’s visit to New Delhi.  Indian experts are of the opinion that China’s ‘cheque-book’ diplomacy goaded lately by ‘early harvest’ thesis of President Xi Jinping’s Belt and Road Initiative has come into full play in Nepal.

“Even before Nepal has come up with any initial estimates on the damage from recent floods China has used the visit by vice premier Wang Yang to present to Nepal a whole range of aid and investment offers. Most of these are symbolic in either providing instant financial aid (typical Chinese way) or in upgrading road connectivity between Kathmandu and Lhasa or in reconstructing the 17th century world heritage pagoda that was destroyed in 2015 earthquake,” Dr Swaran Singh, Professor at the School of International Studies, at the Jawaharlal Nehru University, told Sputnik.

“India is losing goodwill in Nepal after the 2015 blockade, and China could use the simmering discontent since then to its advantage,” adds Singh.

Given the fact that the Himalayan nation is sandwiched between the two Asian giants, historically Nepal has always maintained equidistant outlook towards both. However, the relationship between Nepal and India has been rough since Nepal promulgated a new Constitution in 2015. India viewed the new Constitution as a blatant denial of equal rights to the Madhesi people (who have close ties to India’s bordering states) and imposed an unofficial economic blockade. Meanwhile, China and Nepal and grew closer in recent times with the latter anticipating huge economic benefits from China’s vision of Belt and Road Initiative. The year 2016 saw China passing India as a top aid donor to Nepal. In the current standoff between India and China at the Doklam region, Nepal has chosen a neutral stand despite prodding by both the neighbors.