While tracking the Nepal-China petroleum deal signed in Beijing on Wednesday, India has emphasised that the India-Nepal economic and trade relationship stands ‘on its own merit’ and has a ‘natural logic’. It is also waiting to see how much of the signed agreement translates on the ground. The deal has also triggered polarised political reactions in Nepal - with protesting Tarai groups calling China’s move an ‘unfriendly act’.
In two separate agreements, China has promised to give a one-off 1000 metric tonnes of petroleum products as grant and signed an MoU for petroleum supply. Kathmandu sees the move as a strategic signal to India, in the backdrop of a month long disruption of supplies. The Nepali elite sees it as a way of diversifying economic links, and reducing dependence on India.
Indian officials did not comment on the China-Nepal deal. But government sources told HT that the India-Nepal ‘economic and trade relation’ is ‘multi-faceted, diverse, deep, stands on its own merit and has a certain natural logic’. Almost 70% of Nepal’s trade is with India, bulk of its even third country trade happens through India, and almost half the foreign investment in Nepal is from India.
India is also understood to be waiting and watching to see how the deal translates on the ground. There is a feeling that the move could be more symbolic than substantive.
The impression was buttressed by a top Nepali official, who told HT that China cannot be a ‘sustainable, fruitful alternative.” “The grant is about 100 tankers of fuel which barely meets our needs for a day or two. Roads are difficult to navigate, especially post earthquake. And in a few months, it would be under snow. Nepal can’t change its geography and neighbours.”
Speaking exclusively to HT, Nepal’s ambassador to India Deep Kumar Upadhyay said, “Our aim is to restore the normal economic relationship with India. That is what will benefit the Nepali people in the long-run. We should not take decisions on short term calculations and ego.”
The deal triggered a reaction in the Tarai where protests are in its 78th day against the constitution. Rajendra Mahato, a top Madhesi leader and a former minister of supplies, told HT on the phone, “We have blocked the border for the past month to generate pressure on Kathmandu to meet our demands. For China to step in at this point to help Kathmandu means they have taken sides against the Madhes andolan. In a general situation, we are not opposed to it, but in this context, we view it as an unfriendly act, against us.”
In Birgunj and Janakpur, protestors took out rallies, with ‘Back Off China’ slogans. Mahato added that when China welcomed the constitution opposed by Madhesis, its flag was burnt in Tarai. He warned protests against Beijing would continue. “They have alienated one third of the country.”
Meanwhile, Tarai leaders have complained that current fuel supplies from India to Nepal are concentrated in Kathmandu and do not reach the Tarai. They have pointed to this as yet another instance of discrimination from the centre.