Nepal Prime Minister Sher Bahadur Deuba on Wednesday left for India on a five-day state visit during which the two countries are scheduled to sign four memoranda of understanding worth $250 million, according to the Times of India. If India wants to give substantial economic help to its neighbor to counter China’s growing influence in Nepal, it shouldn’t hesitate.
Economic assistance from India will help Nepal recover from the devastating earthquake in 2015 and improve infrastructure in the country’s undeveloped areas. As one of the world’s poorest countries, Nepal didn’t enjoy many benefits from India’s economic take-off.
However, since a positive relationship between Nepal and China has been established, it seems that Nepal holds more strategic significance for New Delhi. It’s not a bad thing that India’s increasing aid will be conducive to economic development in Nepal, which is sandwiched between China and India. Any resulting increase in Nepal’s consumer spending is likely to offer a potential market for Chinese companies eyeing opportunities abroad.
However, if New Delhi tries to cozy up to Nepal with economic assistance, how much can India offer at a time when its own economy performs sluggishly? The Indian economy is still fragile with many structural problems.
This current situation means that New Delhi can’t turn Nepal into a leading edge in countering China’s rising regional influence. During the Nepal Investment Summit organized by the Nepal government in March, China committed foreign direct investment of $8.2 billion.
If India puts the wrong geopolitical interpretation on economic cooperation between China and Nepal, it will pay a heavy price to win support from the smaller Himalayan country. The economic strength of India, whose GDP is about just one-fifth of that of China, may not be enough to win the competition against China in striving for Nepal’s support.
In recent years, China has stepped up investment as well as economic aid to Nepal so as to revive its ailing economy. But Beijing has no plan to turn Nepal into a battlefront to counter India. Otherwise, it would have given far more economic aid to Nepal to persuade it to stand together with China.
It may be going too far to claim that New Delhi feels pressure to offer a considerable amount of assistance to Nepal during Deuba’s visit to restrain China’s growing influence. That is pointless speculation. Putting geopolitical thinking aside, India should instead consider strengthening triangular cooperation to work with China in offering assistance to Nepal.