Home Contact Us  
   

India & the World - Articles

Print Bookmark Email Facebook Subscribe
#5328, 17 July 2017
 

IPCS Discussion

India-China-Nepal Trilateralism
Report
 

IPCS report on ‘India-China-Nepal Trilateralism’, a round-table held on 1 June 2017.

China-India-Nepal Trade and Transit Links
Chen Xiaochen
Director General, Department of International Studies, Chongyang Institute for Financial Studies, Renmin University of China

After the Nepal earthquake in 2015, a lot of research in China focused on how the One Belt One Road (OBOR) initiative could be made to work in South Asia, especially in Nepal. Subsequently, the economic corridor between China, India and Nepal was proposed as a part of the OBOR initiative. Multiple milestones mark the evolution of the idea. Indian Prime Minister Narendra Modi’s visit to China in May 2015 is especially significant in this regard - it was during his visit that Chinese President Xi Jinping proposed the idea of a China-Nepal-India economic corridor. The proposal was received very warmly by PM Modi who then suggested setting up an Expert Working Group (EWG) to finalise the modalities of the project. Chinese and Indian assistance to the post-earthquake reconstruction of Nepal also underlined how the three countries could collaborate to work for their mutual development.

Further progress in the OBOR initiative was made when President Xi, during his visit to Pakistan in April 2015, announced the inclusion of the China-Pakistan Economic Corridor (CPEC) under the OBOR framework. In 2015, a EWG on the Bangladesh-China-India-Myanmar (BCIM) corridor was also announced. However, work on the proposed project has stagnated in the last two years because of India’s reluctance to take it forward. The successful conclusion of the Border Road Initiative (BRI) forum on 14-15 May 2017 was another remarkable milestone for the OBOR project.  
South Asia has the maximum number of economic corridors proposed under the OBOR initiative, which reflects the importance of the region. The region however lacks any kind of integration between the proposed corridors. The relationship between China and South Asia suffers from the‘spaghetti bowl effect’, which characterises the general economic cooperation between the countries of the region as well as their economic relations with China. The leadership in China and South Asian countries is therefore important in taking the OBOR initiative forward. The leadership of Chinese President Xi and Indian PM Modi is especially significant in this regard. It can work to provide a guide map to policy-makers to alleviate the ‘spaghetti bowl effect’ in the region by successfully integrating all the economic corridors. 

The first important step in this direction would be a project-level collaboration between India and China in the China-Nepal-India corridor as well as the BCIM corridor. Economic corridors have a major spillover effect on the countries through which they pass and are therefore vital for their development. The infrastructure projects that form a part of the corridors form an economic base and are critical for poverty alleviation. The China-Nepal-India corridor also offers India and China with the opportunity to cooperate in a third market.

The China-Nepal railway is a major infrastructure project that is a part of the initiative. This railway line that connects Lhasa to Kathmandu will be further extended to the Indian border. Although the project will be costly is still feasible. It will have a spillover effect on the economic development of Nepal and will positively affect the trade relations between China and South Asia, acting as a gateway between them. The corridor will also facilitate people-to-people exchanges in religious and cultural domains. The China-Nepal-India corridor can precede the OBOR initiative as well as the various South Asian economic corridors. The Asian Infrastructure Investment Bank (AIIB) can be approached for financing this project.

Only Way to Achieve Prosperity in South Asia: China-India Cooperation
Zhang Shubin
Professor and Director,Nepal Study Centre,Hebei University of Economics and Business

China’s OBOR initiative includes the silk-road economic belt and a 21st century Maritime Silk Road (MSR). It is based on three communities: of responsibility, shared interests, and destiny. The project is based on cooperation priorities such as policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds. Peace and cooperation and mutual learning and benefit are the founding ideals of the project. 

The Nepal rail project is expected to be completed by 2020. In the recently announced budget, a provision of 400 million Nepali Rupees was made by the Nepalese government for the project. This is however an insufficient amount. Connectivity is a foundation of the OBOR project and is vital for the various countries to ultimately benefit from it. It is all the more important for Nepal if it intends to benefit from the OBOR initiative. Therefore, it is essential for the country to pay more attention to its rail and road links connectivity. It came as a surprise to China that the critically important China-Nepal railway project found no mention in the Kathmandu investment summit, held earlier in 2017. 

China and India are the two most important member countries of the AIIB. To facilitate greater cooperation between the two, it is important to develop people-to-people communications. 

The OBOR initiative is a conglomeration of various economic corridors which include the Eurasian land bridge, the China-Mongolia-Russia economic corridor, the Indo-China Peninsula economic corridor, the CPEC, the BCIM and the China-Central Asia-West Asia economic corridor. The China-Nepal-India economic and cultural corridor will add greater significance to the initiative. Buddhism forms an important cultural link between the three countries. There are approximately one hundred million Buddhists in China. Given that some of the most religiously significant sites lie in Nepal and India, an annual visit of Chinese pilgrims to these places will significantly contribute in building people-to-people contact. 

The proposal for China-India-Nepal trilateralism came much before OBOR. Nepal and China signed the transit transport treaty in 2016. The OBOR initiative will be undertaken in three forms in Nepal; through China-Nepal bilateral cooperation, the BCIM project and the China-Nepal-India trilateralism initiative. 

Xi Jinping talked about shared future for mankind and the OBOR initiative is a step in this direction. However for the initiative to successfully take off in South Asia, it is important for the countries to get abandon the zero-sum game mindset. Nepal should not be seen as India’s backyard and efforts should be made in developing it into South Asia’s Brussels. 

India-China-Nepal Trilateralism: Perspectives from Nepal
Pramod Jaiswal
Visiting Research Fellow, Institute of Peace and Conflict Studies (IPCS), New Delhi

A trilateral partnership between India, China and Nepal will be in the interest of the region and will be mutually advantageous to the three countries. Given that Nepal is located at the centre of the trilateral axis, it stands to gain the maximum benefit from this arrangement. The partnership promises to bring economic growth, infrastructural development and investments in the country. It will also help control the migration of Nepalese youth to Gulf countries by providing them with employment opportunities within the country. Nepal is rich in water resources which can be harnessed for the generation of electricity. Similarly, the abundance of its natural beauty provides great potential for supporting tourism and related activities.

These can however be harnessed to the maximum only with the help of India and China who have both the technology and the capital. India also has the market for electricity that can be generated in Nepal. Besides, the development of this trilateral relationship will provide China with greater access to South Asia; and India with much wider access to regions like Tibet, Xinjiang and Central Asia. 

For the Chinese, there are three major drivers to the trilateral relationship. Firs, China’s three major provinces - Yunnan, Xinjiang and Tibet - share a long border with South Asia and any problem in the region will have spillover effects on the other three. Hence, for stability in Tibet and Xinjiang, China will need to befriend the South Asian periphery and build excellent relations with the region. Second, there is relative decline in China’s growth rate and the country is hence looking for fresh markets and opportunities, for which it cannot ignore the 1.6 billion-strong South Asian markets. Finally, China’s access to South Asia will provide it with an alternative to the Malacca Strait for which China intends to develop the Nepal-India-China Economic Corridor, CPEC and BCIM.

Although the idea of a trilateral partnership is mutual beneficial, much will depend on the political and strategic relations between the three countries. China has been asking its neighbouring countries, including Vietnam, Philippines, Japan, India and the US, to put their mutual disputes and differences aside and further their bilateral engagement on the economic front. China has also proposed to pump in investment, build infrastructure and facilitate industrialisation in these countries.

However, the hard reality of international politics is that until strategic issues are settled, a relatively weaker partner cannot fully engage economically and socially with an assertive and more powerful neighbour. Therefore, political issues and strategic issues continue to remain vital to their relationship. 

In order to resolve the political and strategic challenges, therefore, all the stakeholders will need to streamline their domestic political environment. In China, the ruling party will have to control the PLA’s actions because the PLA’s moves have a significant impact on the country’s relations with Nepal and India. Similarly, India will need to resolve the issue of its states impinging on its foreign policy. Although the current government led by Prime Minister NarendraModi has come to power with a strong mandate, the states sharing borders with other countries continue to have significant say in India’s foreign policy matters. West Bengal, for instance, controls its Bangladesh policy; Jammu and Kashmir (J&K), its Pakistan policy; Tamil Nadu, its Sri Lanka policy; and Bihar and Uttar Pradesh, its Nepal policy. Unless these internal complications are not settled, long-term policies towards neighbours like Pakistan, Sri Lanka, Bangladesh, Myanmar, Nepal and China cannot be effectively framed. 

To smoothen out relations, China will also need to resolve the Tibet issue because it continues to give rise to a great deal of trust deficit between India and China. India and China should move fast and sincerely on resolving the border issue. Similarly, China should stop strengthening Pakistan as an anti-India factor and join hands with India on issues related to the global commons. India must address Chinese sensitivities and assure that India’s relations with the US, Japan, Korea, Australia, ASEAN member states and others would not hurt China’s core interests.Finally, there are two other factors that will have implications for the prospects and dynamics of this trilateral relationship. First, if there is a decline in China’s growth rate, China might concentrate its effort on improving relations with bigger trading partners instead. Also, even if the three countries are able to resolve their mutual issues, the nature of the US-China relationship will impact the extent to which this relationship can be developed. 

Concluding Remarks
Amb (Retd) TCA Rangachari
Member, Governing Council, IPCS; former Indian diplomat; and former Director, Academy of International Studies, Jamia Millia Islamia University, New Delhi

India and China are faced with the broader choices of competition or cooperation. Cooperation between the two countries would constructively contribute to peace, stability and the economic betterment of the region. Both the countries are faced with common problems like poverty elimination, ensuring balanced and equitable growth, governance and rule of law, rural-urban migration, unemployment, environment protection and climate change. These issues should encourage cooperation between the two countries. Containment, on the other hand, serves to derail these objectives, aggravate bilateral tensions, and increase hostility. It would also widen the trust deficit between the governments of the two countries.

The trade deficit between India and China exceeds US$50 billion. While Foreign Direct Investment (FDI) from the Chinese side has increased, the amount is still too small to offset the trade deficit. Similarly, China’s actions and policies in the neighborhood and in the Indian Ocean Region (IOR) remain adverse to India’s interests in the region. The CPEC under the OBOR project disregards India’s interests and concerns. China’s position on the issue is surprising given how the country itself is a victim of Pakistan-based terror groups. China has been equally dismissive of India’s position on the CPEC. This comes despite China’s own position on issues of sovereignty and territorial integrity. 

India and China will need to work together to accommodate each other’s interests, however different, competing or even conflicting they may be, in a cooperative arrangement. 

Rapporteured by Niharika Tagotra, Researcher, CRP, IPCS

Print Bookmark Email Facebook Subscribe
IPCS Columnists
Af-Pak Diary
D Suba Chandran
Resetting Kabul-Islamabad Relations: Three Key Issues
Can Pakistan Reset its Relations with Afghanistan?
The New Afghanistan: Four Major Challenges for President Ghani
Big Picture
Prof Varun Sahni
Understanding Democracy and Diversity in J&K
When Xi Met Modi: Juxtaposing China and India
Pakistan?s Tactical Nuclear Weapons: The Inevitability of Instability

Dateline Colombo

Asanga Abeyagoonasekera.
Sri Lanka: Moving Towards a Higher Collective Outcome
The Importance of Electing the Best to our Nation's Parliament
Sri Lanka: Toward a Diaspora Re-Engagement Plan
Dateline Islamabad
Salma Malik
Pakistan's Hurt Locker: What Next?
IPCS Forecast: Pakistan in 2015
India-Pakistan Relations in 2015: Through a Looking Glass
 
Dhaka Discourse
Prof Delwar Hossain
IPCS Forecast: Bangladesh in 2015
18th SAARC Summit: A Perspective from Bangladesh
Bangladesh in Global Forums: Diplomacy vs. Domestic Politics
Eagle Eye
Prof Chintamani Mahapatra
India-US: Significance of the Second Modi-Obama Meet
Has President Obama Turned Lame Duck?
Modi-Obama Summit: Criticism for Criticism?s Sake?

East Asia Compass
Dr Sandip Mishra
India-Japan-US Trilateral: India?s Policy for the Indo-Pacific
China-South Korea Ties: Implications for the US Pivot to Asia
Many ?Pivots to Asia?: What Does It Mean For Regional Stability?
Himalayan Frontier
Pramod Jaiswal
Nepal?s New Constitution: Instrument towards Peace or Catalyst to Conflict?
IPCS Forecast: Nepal in 2015
Constitution-making: Will Nepal Miss its Second Deadline?

Indo-Pacific
Prof Shankari Sundararaman
IPCS Forecast: Southeast Asia in 2015
Indonesia's Pacific Identity: What Jakarta Must Do in West Papua
Modi in Myanmar: From ?Look East? to ?Act East?
Indus-tan
Sushant Sareen
IPCS Forecast: Pakistan in 2015
Islamic State: Prospects in Pakistan
Pakistan: The Futility of Internationalising Kashmir

Looking East
Wasbir Hussain
Myanmar in New Delhi's Naga Riddle
China: ?Peaceful? Display of Military Might
Naga Peace Accord: Need to Reserve Euphoria
Maritime Matters
Vijay Sakhuja
Indian Ocean: Modi on a Maritime Pilgrimage
Indian Ocean: Exploring Maritime Domain Awareness
IPCS Forecast: The Indian Ocean in 2015

Nuke Street
Amb Sheelkant Sharma
US-Russia and Global Nuclear Security: Under a Frosty Spell?
India's Nuclear Capable Cruise Missile: The Nirbhay Test
India-Australia Nuclear Agreement: Bespeaking of a New Age
Red Affairs
Bibhu Prasad
Countering Left Wing Extremism: Failures within Successes
Return of the Native: CPI-Maoist in Kerala
The Rising Civilian Costs of the State-Vs-Extremists Conflict

Regional Economy
Amita Batra
India and the APEC
IPCS Forecast: South Asian Regional Integration
South Asia: Rupee Regionalisation and Intra-regional Trade Enhancement
South Asian Dialectic
PR Chari
Resuming the Indo-Pak Dialogue: Evolving a New Focus
Defence Management in India: An Agenda for Parrikar
Pakistani Taliban and Al Qaeda in Afghanistan: Implications for Asian Security

Spotlight West Asia
Amb Ranjit Gupta
Prime Minister Modi Finally Begins His Interaction with West Asia*
A Potential Indian Role in West Asia?
US-GCC Summit: More Hype than Substance
Strategic Space
Manpreet Sethi
India-Russia Nuclear Vision Statement: See that it Delivers
Global Nuclear Disarmament: The Humanitarian Consequences Route
Nasr: Dangers of Pakistan's Short Range Ballistic Missile

The Strategist
Vice Admiral Vijay Shankar
Jihadi Aggression and Nuclear Deterrence
The Blight of Ambiguity
Falun Gong: The Fear Within


OTHER REGULAR contributors
Gurmeet Kanwal
Harun ur Rashid
N Manoharan
Wasbir Hussain
Rana Banerji
N Manoharan

Ruhee Neog
Teshu Singh
Aparupa Bhattacherjee
Roomana Hukil
Aparupa Bhattacherjee


 

Browse by Publications

Commentaries 
Issue Briefs 
Special Reports 
Research Papers 
Seminar Reports 
Conference Reports 

Browse by Region/Countries

East Asia 
South Asia 
Southeast Asia 
US & South Asia 
China 
Myanmar 
Afghanistan 
Iran 
Pakistan 
India 
J&K  

Browse by Issues

India & the world  
Indo-Pak 
Military 
Terrorism 
Naxalite Violence 
Nuclear 
Suicide Terrorism 
Peace & Conflict Database 
Article by same Author
Tibetan Caravans: Journeys from Leh to Lhasa

Chinese Military Reform, 2013-2030

Dominant Narratives in Kashmir: Evolving Security Dynamics

The Nuclear Future

Dealing with Dirty Wars

'25 Years of Diplomatic Relations Between India and Israel and the Way Forward'

The Roles and Dimensions of Science and Technology in India’s Foreign Policy

Maldives: Contextualising Freedom of Speech in the Murder of Yameen Rasheed

India’s Nuclear Strategy

Diplomacy and the Politics of Language

2017 Indian Assembly Elections: How Did the States Vote?

'Faith, Unity, Discipline: The ISI of Pakistan'

Women & Public Policy Journal [Vol. 2] Launch: 'Afghan Economy in the Decade of Transformation (2015-2024)'

India-Australia and Roles in the Indo-Pacific

Equality, Equity, Inclusion: Indian Laws & India’s Women

"Our Bilateral Relations"

Regional Power Play and Rise of Radicalism in Afghanistan

Afghanistan-Pakistan-India: A Paradigm Shift

Security of Bangladesh in the South Asian Context

India-Pakistan Under Prime Ministers Gujral-Sharif: A Retrospective

Who Sets the Table: Negotiated Sovereignty and the Indo-Naga Relationship

A Changing Myanmar: Challenges, Opportunities & Future Perspectives

Discussion Report: Indiaís Role in Building a Counter-Narrative to Isis Propaganda

China's Continental Strategy Over the Next Twenty Years

Bangladesh and Nepal: Review of IPCS Forecasts

ADD TO:
Blink
Del.icio.us
Digg
Furl
Google
Simpy
Spurl
Y! MyWeb
Facebook
 
Print Bookmark Email Facebook Subscribe
Year 2017
 January  February  March  April  May  June  July  August  September
 2016  2015  2014  2013  2012  2011  2010  2009
 2008  2007  2006  2005  2004  2003  2002  2001
 2000  1999  1998  1997
 
 

The Institute of Peace and Conflict Studies (IPCS) is the premier South Asian think tank which conducts independent research on and provides an in depth analysis of conventional and non-conventional issues related to national and South Asian security including nuclear issues, disarmament, non-proliferation, weapons of mass destruction, the war on terrorism, counter terrorism , strategies security sector reforms, and armed conflict and peace processes in the region.

For those in South Asia and elsewhere, the IPCS website provides a comprehensive analysis of the happenings within India with a special focus on Jammu and Kashmir and Naxalite Violence. Our research promotes greater understanding of India's foreign policy especially India-China relations, India's relations with SAARC countries and South East Asia.

Through close interaction with leading strategic thinkers, former members of the Indian Administrative Service, the Foreign Service and the three wings of the Armed Forces - the Indian Army, Indian Navy, and Indian Air Force, - the academic community as well as the media, the IPCS has contributed considerably to the strategic discourse in India.

 
Subscribe to Newswire | Site Map
18, Link Road, Jungpura Extension, New Delhi 110014, INDIA.

Tel: 91-11-4100-1902    Email: officemail@ipcs.org

© Copyright 2017, Institute of Peace and Conflict Studies.