If the Nepal-India relationship was listed on the Sensex it would be a market leader in volatility. Seven years ago the stock could not have been higher.
India had brokered an end to a decade- long civil war, brought Nepal’s Maoist guerrillas into the mainstream, abolished the monarchy and paved the way for a new democratic order in the Himalayas.
It all went rapidly southward.
New Delhi was caught off guard when the Maoists won the first postwar elections. The next few years left Kathmandu gridlocked. The first Maoist prime minister, Prachanda, raised New Delhi’s shackles with his open Indophobia. He won the Nepal Street by pointing to heavyhanded Indian attempts at micro-managing local politics – all too easy with Nepal’s fragmented party structure.
New Delhi suspected the Maoists wanted to destroy Nepal’s fledgling democracy from within. The ex-guerrillas suspected their southern neighbour wanted to marginalize them. The two packed weapons - just in case. The Maoists kept their weapons. India kept the Nepalese Army close to its side.
The country's main external player and its most powerful domestic part fenced and parried. Relations nosedived. The main loser was Nepal.
The turning point was when India gave a green signal to the formation of the second Maoist-led government under Baburam Bhattarai last year.
After so much bad blood with Prachanda, India found a more amenable partner in the Jawaharlal Nehru University-educated Bhattarai. It helped that New Delhi was less fearful of the Maoists after so many years of playing political chess with them. “Policy-makers in India started realising they can do business with the Maoists,” said Sridhar Khatri of the Kathmandu based South Asia Centre for Policy Studies.
A sense of how the wind has shifted was Bhattarai’s state visit to India last October. Bilateral talks on everything from water to energy were reactivated, a two-way investment treaty was done (44% of FDI in Nepal is Indian) and India extended a $ 250 million line of credit.
New Delhi came to accept that the Maoists were not the intractable ideologues they had originally thought. “India realised it could no longer antagonise the largest party. The Maoists, especially Prachanda, realised some sort of understanding with New Delhi was needed,” says former Nepali Ambassador to India Lok Raj Baral.
India has now begun engaging at Nepal’s “pace, priority and convenience.” Today, New Delhi is, at least outwardly, a silent spectator to the Himalayan nation’s domestic political manoeuvres.
The Maoists also discovered some hard realities. The mainstream democratic parties were often unsupportive of their battles with New Delhi. And while they expected the West to be squarely behind India’s Nepal policy, these Leftists were surprised to be told by Beijing to make up with India. China’s first concern was instability on its Tibetan border.
In effect, a political Seven Years’ War between India and the Maoists followed the end of the civil war. With this hatchet also buried, in theory Nepal can follow a normal path of political evolution – an up and down trek but one without the spectre of renewed war.
Nepal will soon have a new constitution and a general election will follow. A key measure of how far New Delhi-Maoist relations have changed will much less bittr their differences on both will be. Over time, says Baral, Nepalese should move away from a tendency to blame India for all ills and address India’s security concerns.
The larger relationship, everyone agrees, needs to look beyond personalities and avoid confrontation on minor issues. “Instead of concentrating on irritants, India and Nepal should be more mature in their dealings. It takes two to tango. Both sides are ready to take relations to the next level,” said Khatri.