India’s initial optimism about relations with Nepal is fading fast.
After the Gen Z uprising in Nepal last year, New Delhi strongly supported the caretaker government of Sushila Karki and its unique agenda of holding timely elections. The Karki government has kept this promise.
In the March 5 legislative elections, the Rashtriya Swatantra Party (RSP) obtained almost two-thirds of the majority. Its future candidate for prime minister, Balendra Shah, took the reins of government on March 26.
India, which was understood to have agreed before the poll with the RSP that its vital interests would be protected if the party came to power, appeared satisfied with the developments in Kathmandu. After the publication of the election results in Nepal, Indian Prime Minister Narendra Modi barely concealed his joy at the congratulatory message addressed to the Shah.
However, cracks quickly appeared in relations between India and Nepal. In keeping with tradition, Indian Ambassador to Nepal Naveen Shrivastava made it a point to personally congratulate Shah on becoming Prime Minister. But Shah, keen to break with the tradition of Nepali leaders meeting foreign ambassadors individually, granted a collective audience to resident ambassadors in Kathmandu.
It later emerged that the Indian Prime Minister had invited Shah to visit India while delivering his congratulatory message – and Shah had accepted the invitation. Kathmandu and New Delhi have accelerated preparations for the visit. Then, unexpectedly, the RSP issued a statement saying that the Nepalese Prime Minister would not make any foreign trips for at least a year.
This happened even as Indian Foreign Minister Vikram Misri was scheduled to visit Kathmandu and extend Modi’s formal invitation to the Nepalese Prime Minister.
Again, Shah did not agree to meet Misri, in line with his stance that he would not meet any foreign leader below the rank of minister.
Interestingly, the new prime minister clashed with members of his own cabinet, who felt that a blanket policy of not meeting foreign delegates was unwise. The Prime Minister rarely listens, even to senior RSP officials.
Around the same time as preparations for Misri’s visit to Kathmandu were underway, Nepal strongly protested to New Delhi over the new Sino-Indian agreement to resume trade and pilgrimage through the Lipulekh Pass, which lies at a trijunction point between the three countries. In light of all these developments, Misri’s visit to Kathmandu has been postponed.
That wasn’t all. The Shah’s government implemented a long-ignored directive that goods purchased by Nepali nationals in Indian border towns would be taxed, allegedly to control smuggling. This has affected the livelihood of these Indian cities which depend on Nepali buyers. Within a short time, even the entry of Indian vehicles into Nepal through the open border between the two countries was restricted.
The Indians felt betrayed. They believed they had a strong understanding with the RSP leadership that Indian interests would be taken care of under the party’s rule. This is why they also supported quick elections (in a pro-RSP electoral climate) and the arrival of the party in power.
One argument goes that it was the old RSP leadership that had a deal with India – not Shah, who joined the party just months before the elections. In this reading, the mercurial rapper was always going to be a wild card for India.
New Delhi also believes that the extensive people-to-people and trade connections make its relations with Kathmandu incomparable to Nepal’s relations with any other country. It is therefore wrong to treat India like any other country. It did not matter to Indians that Shah also refused to meet Chinese, American and foreign envoys – or other visiting officials from those countries.
All these signs suggest that New Delhi and Kathmandu are growing further apart and that India’s initial enthusiasm for the Shah’s government has cooled.
New Delhi can make things difficult for Shah. Trade is an important element of India’s neighborhood policy. In 2015, when Indians felt their interests were not being addressed in the new constitution Nepal promulgated that year, they blocked the border, creating a severe shortage of vital goods in Nepal. India may not make the mistake of imposing a blockade again, which has also damaged its international reputation. But it still has other disruptive tools. For example, it recently tightened its imports of Nepalese tea and may similarly impose quotas or new limits on products imported from Nepal.
Even at the national level, it is far from smooth sailing for Balendra Shah. He is now embroiled in further controversy after refusing to take part in the new parliament’s question-and-answer session. A few days earlier, during the inaugural session of Parliament, he left the country as the president presented his own government’s plans and programs.
Faced with growing difficulties at home, Shah may be tempted to follow the script of some of his nationalist predecessors and move closer to China, as some early signs suggest. This will make the Indians even more nervous. And a wary India rarely bodes well for the Nepali prime minister – or the Nepali state.