In a strategic move aimed at maintaining equilibrium in its foreign relations, Nepal’s Prime Minister Pushpa Kamal Dahal Prachanda is set to embark on a crucial visit to China at the end of September. This visit holds paramount importance, not only for Nepal, but also for the broader region, particularly against the backdrop of an evolving global dynamics.
In the year 2022, Nepal’s imports from China totaled $1.84 billion, while exports amounted to $5.39 million. This economic engagement is underpinned by China’s significant role as a key investor in Nepal’s infrastructure development. Notably, Beijing’s contribution accounts for 14% of Nepal’s international trade. In comparison, India holds a prominent share of nearly two-thirds of Nepal’s trade, highlighting the diversity of Nepal’s economic partnerships.
An important milestone in their collaboration was reached in 2016, when China granted Nepal access to its ports for trading with other nations. Additionally, both nations embarked on an ambitious project to establish a trans-Himalayan railway network linking Kathmandu with China’s Tibet region, a venture that underscores their commitment to enhancing connectivity and cooperation. The trade volumes between Nepal and China serve as a reflection of their multifaceted relationship, encompassing economic, infrastructural, and connectivity endeavors. This partnership showcases the evolving dynamics of trade and investment in the region, positioning both nations for shared growth and prosperity.
However, the Foreign Minister of Nepal, N P Saud’s assertion on the significance of foreign relations grounded in national dignity, unity, and mutual interests resonates deeply with Nepal’s diplomatic priorities. The government’s steadfast clarity on its foreign policy approach emphasizes the restoration of strained relationships with friendly nations from its past. As the world faces a complex juncture, underscored by the Ukraine war and global economic challenges, the need for immediate attention to regional energy security becomes undeniable.
In this context, Nepal’s imminent dialogue with China takes on added significance. Energy security, a pressing regional concern, demands innovative multilateral solutions. The collaboration between nations becomes crucial to ensure not only regional stability but also the collective welfare and interests of stakeholders. The visit holds the potential to foster strategic understanding and synergies that can yield long-term benefits for all parties involved.
An interesting facet of the visit is the rescheduling of Prime Minister Prachanda’s address at the 78th United Nations General Assembly. The dates between the opening ceremony of the 19th Asian Games in Hangzhou and the UN General Assembly address posed a dilemma. However, with proactive measures, Nepal’s Permanent Mission to the UN successfully rescheduled the prime minister’s address to September 21. This reflects Nepal’s commitment to engaging at the global platform while ensuring its regional obligations remain paramount.
Prime Minister Prachanda’s visit signifies not only bilateral cooperation but also Nepal’s aspiration to become a regional power hub. The pursuit of power trading agreements with both China and Bangladesh reflects Nepal’s intention to harness its energy resources for the collective benefit of its neighbors. This endeavor not only demonstrates Nepal’s commitment to regional stability but also exemplifies the nation’s determination to retain its youth by creating employment opportunities through sustainable development.
The upcoming China visit, therefore, encapsulates Nepal’s strategic navigation amidst intricate geopolitical dynamics. With its eyes set on bolstering national dignity, unity, and mutual interests, Nepal forges ahead with a clear understanding of its foreign policy goals. As it engages with regional partners like China and India, the country positions itself as a proactive participant in cross-border energy trade and agricultural collaboration. This diplomatic overture not only strengthens Nepal’s regional stature but also augments its potential to become a catalyst for positive change in the broader South Asian region.
In a world where connectivity and cooperation are increasingly indispensable, Nepal’s diplomatic endeavors, particularly the forthcoming visit to China, offer a glimpse into the nation’s evolving role on the global stage. As the wheels of diplomacy turn and agreements are inked, it becomes evident that the region is on the cusp of transformative changes that hold promise for a brighter, more interconnected future.
On the other hand, the recent visit of Nepal’s Prime Minister Prachanda to India underscores the burgeoning influence of India within Nepal’s sphere. The culmination of his trip witnessed the sealing of seven pivotal agreements between the two nations, solidifying their cooperation in various domains, notably trade and energy. A significant outcome of these deliberations is the reinforced sway that India now holds over Nepal’s energy landscape. This is exemplified by Indian Prime Minister Narendra Modi’s proclamation of a strategic blueprint: a remarkable augmentation of power imports from Nepal to India, with a formidable target of 10,000 MW over the next decade.
In the concluding Indian fiscal year till March 2022, India-Nepal bilateral trade surged by 41% compared to the preceding year. Impressively, Nepal’s exports to India more than doubled, marking an increase of over 100%. This surge in exports accounted for a significant three-quarters of Nepal’s total export volume. This robust growth underscores the strengthening economic ties between the two nations, signifying not only increased trade activity but also a deepening partnership that is mutually beneficial.
Such developments vividly illustrate India’s growing imprint on Nepal’s affairs, particularly in the energy sector. This strategic collaboration signifies a deepening interdependence between the two nations, fostering economic synergies and paving the way for a more robust regional partnership. As India endeavors to extend its energy capacity by leveraging Nepal’s resources, it enhances its foothold in the region while simultaneously elevating Nepal’s role as a pivotal energy contributor. This dynamic further cements the evolving dynamics of the India-Nepal relationship, reflecting the mutual benefits and aspirations that drive this burgeoning alliance.
In a world that continuously experiences shift in alliances and geopolitical currents, it is important to respect each country’s sovereign right to engage with others based on its distinct circumstances. Such engagements should be appreciated as means of fostering bilateral ties, cultural exchanges, and economic collaborations, without hastily attributing them to grander geopolitical designs.
In conclusion, while the international community may observe these diplomatic interactions with inquisitiveness, it is prudent not to overinterpret their significance. Countries should understand that each nation, including Nepal, navigates its foreign relations within the context of its own unique priorities. By focusing on this individuality, the global community can promote a climate of understanding and cooperation, allowing each nation to chart its course in a manner that best serves its own interests and aspirations.
*The writer is a research associate in Bangladesh.
August 22, 2023
The viewpoints expressed by the authors do not necessarily reflect the opinions, viewpoints and editorial policies of Aequitas Review.
