India - Nepal: Competing with China on Connectivity

STORIES, ANALYSES, EXPERT VIEWS

India - Nepal: Competing with China on Connectivity

Nepal Prime Minister KP Sharma Oli’s visit to China two weeks ago  was significant in more ways and has more implications for India than is immediately apparent, writes M. Jamshed (Former Member Traffic, Indian Railway Board).  “First, in strengthening a bilateral partnership designated in the 2019 Strategic Partnership of Cooperation. Second, it holds consequences for India’s Act East framework, particularly through some important steps on regional connectivity.”

 

Framework for Belt and Road Cooperation

The Joint Statement of China and Nepal of 3 December was followed by signing of the Framework for Belt and Road Cooperation between the two sides on 4 December. According to media reports, both sides agreed to a term, ‘aid assistance financing’ under this framework. However, the details of the BRI Framework agreement are not yet available. Nepal’s Ministry of Foreign Affairs’ tweet of 4 December only confirms that the Framework for Belt and Road Cooperation has been signed.

The signing of BRI Framework Cooperation between Nepal and China assumes significance, according to Jamshed “when seen in the backdrop of similar developments taking place in other South Asian nations. Railway projects under BRI framework in India’s neighbourhood already cover Pakistan, Bangladesh, Myanmar, and Sri Lanka.  China-Myanmar Economic Corridor (CMEC) includes Muse-Mandalay rail line in Myanmar, China-Pakistan Economic Corridor (CPEC) plans for rail connectivity from Kashgar in China to Gwadar port in southwest Pakistan and stand-alone railway projects of Dhaka-Jessore in Bangladesh and Matara- Beliatta in Sri Lanka. India too has been providing support through its line of credit to several railway-related projects in Bangladesh, Bhutan, Sri Lanka, Nepal and Myanmar.”

 

Indian railways better placed than China

In this context, Jamshed writes Indian Railways is  “better placed than China…..” It  already has operational links with Bangladesh, Pakistan, and Nepal. It is yet to be seen whether the Birgunj- Kathmandu rail link between India and Nepal is jointly approved for construction and commissioning early. In any way, Kathmandu getting rail connectivity with India by a southern link and a rail connection with China in the North could well be termed the cliched win-win situation for all.”

 

India’s Neighbourhood First and Act East policy

India’s Neighbourhood First Policy (NFP) is aimed at enhancing physical, digital and people to people connectivity across the region as well as augmenting trade and commerce.

The Look East Policy of 1992 has been upgraded to India’s Act East policy, aimed at strengthening ties with countries of South East Asia, and recognises connectivity in its broadest sense as the key for growth and prosperity. Similarly, the Think West and Connect Central Asia Policy with the Security and Growth for All in the Region (SAGAR) present more comprehensive regional cooperation models. However, financing of projects along with national priorities continues to impact cost-intensive projects, especially in South Asia.

The crucial Birgunj-Kathmandu rail link project: India has taken the lead through the Bangladesh, Bhutan, India, Nepal (BBIN) framework of cooperation, supporting the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and bilaterally undertaking project financing through its line of credit in South Asia. It is, therefore, imperative, concludes Jamshed “that a very crucial Birgunj-Kathmandu rail link project gets approved by both India and Nepal on priority and completed in a time-bound manner. This will not only open Nepal to the world through the Indian Railways network but also help the two nations, which are linked by centuries of history and culture, achieve mutual growth and shared prosperity."


All Neighbours Article