Nepal's political instability impacts India ties

Last month, after Indian Foreign Secretary Vinay Mohan Kwatra met his Nepali counterpart Sewa Lamsal in Kathmandu, a press note issued on this meeting mentioned the two sides discussed “multifaceted cooperation”. However, it did not reference PMP, which is by far the biggest bilateral power project conceived between the two sides.  

Mahendra Ved Mar 11, 2024
Prime Minister Narendra Modi met Nepal PM Pushpa Kamal Dahal (Photo: PIB)

The latest turn of events in Nepal carries significant old and new pointers. One: like in Pakistan where last month's election yielded a 'hung' House, parties coming second and third in the race formed the new government. As Imran Khan’s loyalists in Pakistan forced into opposition, the Nepali Congress which scored the highest numbers in last year's election is out of power, yielding it to numbers two and three. Indeed,  number two is backing number three, the party of Prime Minister Pushpa Kamal Dahal ‘Prachanda’.

Two: the numbers game repeats itself, with no principles involved. The Nepali people have only transited from monarchy to squabbling politicians playing the game of musical chairs. Nepali Congress chief Deuba has been the prime minister five times, Maoist Oli twice and this is Prachand’s third term.

Three:  like it was once said of the socialists the world over, the Nepalese communists also cannot stay together beyond some time, but also cannot stay apart for long. The Maoists, communists and the Samajwadi (socialists), rivals in the opposite camps have become the new allies.  

It raises the question if the Nepali Congress was oblivious to the growing China factor, not only in Nepal but across South Asia and the moves of former prime minister K P Oli who heads the CPN-UML, and why was the Nepali Congress unable to patch up its growing differences with Prachanda over some ministerial posts?

And four, which is crucial: if the military-led 'establishment' is the prime mover from behind the scenes in Pakistan, in Nepal, the inspiration has come from China. At least the Nepali Congress, ousted from power, has alluded to the use of Chinese good offices to bring about a patch-up among Nepal’s leftists. The pace of China's Belt and Road Initiative (BRI) in Nepal is also seen as a factor.

Coalition crisis

The latest round – Nepal has witnessed numerous such changes – seems a combination of all these factors. Dahal, who became prime minister with the support of Oli’s CPN-UML in December 2022, broke the coalition and joined hands with the Nepali Congress just after a few months.

Nepali Congress emerged as the largest party in the House of Representatives during the November 2022 general election, securing 89 seats out of a total of 275. The CPN-UML secured 78 seats, followed by the Maoist Centre, which got 32 seats. The RSP, Rastriya Prajatantra Party, Janata Samajwadi Party and CPN-Unified Socialist won 20, 14, 12 and 10 seats respectively. A party must win the support of at least 138 members of the House of Representatives to form the government.

This time over, the rift between the Maoist Centre and Nepali Congress widened between Nepali Congress leader and Finance Minister Mahat and Prachand over the issue of budget allocation to certain projects. Also, Nepali Congress president Deuba wanted his party’s senior leader and newly elected lawmaker Krishna Sitaula to be made the chairman of the National Assembly against Prachand’s plan to keep the post or his party’s fellow Maoist. Oli, it would seem, settled into this deepening wedge.  

This one also may not endure for long in its new form. The present parliament is to last over three more years. Past elections have yielded ‘hung’ Houses, leading to horse-trading and continued political instability.  

China factor

As for China, it reacted with alacrity on the same day, March 5. Its Foreign Ministry spokesperson said Beijing was “willing to work with the new government….. We sincerely hope that all parties in Nepal will unite and cooperate to smoothly advance the work related to the formation of a new government and achieve political stability, economic development, and improvement of people's livelihood.”

India, the other big neighbour, has not so far reacted. The Nepal developments come even as it battles the hardening of stance by the Maldives in the Indian Ocean. President Mohammed Muizu has become more vocal since his China visit where he signed a clutch of agreements including one on defence. He has demanded that India withdraw its defence personnel and equipment, come what may, by May 10.  Withdrawing from the Maldives cannot be abrupt, but the Muizu government criticised at home for tilting towards China, is in unseemly hurry. Reports indicate that the fall in tourists from India and Russia, tourism has been compensated by Chinese tourists. Tourism is the mainstay of the Maldivian economy.

Nepal’s changes were not exactly surprising or abrupt.  Mistrust between the ruling Congress and Dahal’s Maoist Centre had been brewing for a long time over the cabinet reshuffle and post for National Assembly chair. Prime Minister Dahal was expressing his displeasure with some senior Congress leaders saying that Congress president Sher Bahadur Deuba was not cooperating in his plan to replace some ministers despite their failure to perform well in the government.

India factor

Take the India factor in Nepal. Over a month after India and Nepal signed the agreement on long-term power sharing, the two sides have failed to make any forward movement on the stalled negotiations over the landmark Pancheshwar Multipurpose Project (PMP). Last month, after Indian Foreign Secretary Vinay Mohan Kwatra met his Nepali counterpart Sewa Lamsal in Kathmandu, a press note issued on this meeting mentioned the two sides discussed “multifaceted cooperation”. However, it did not reference PMP, which is by far the biggest bilateral power project conceived between the two sides.  

Further bilateral talks have also not helped. Nepal’s Foreign Minister N.P. Saud took part in India’s annual Raisina Dialogue. He also visited the Ram temple’s opening in Ayodhya. The age-old cultural proximity with such participation has not helped hard-headed diplomacy.

Nor has India’s readiness to buy more electricity from Nepal. Reports indicate that the project is stalled because the two sides are unable to agree on the sharing of benefits. While electricity is divided equally, India gets the lion’s share of irrigation and flood control benefits. On the other hand, Kathmandu feels water is ‘white gold’ and India should pay Nepal for it. India cannot accept this claim as it challenges India’s understanding of other water-based treaties, including the Indus Waters Treaty with Pakistan. Hardliners say that India should find a way to compensate the Nepalese satisfactorily for the deal to go through.

For landlocked Nepal, committed to keeping a safe distance from the two big neighbours, there seems no way out of the impasse except to put its political house in order.

(The writer is a veteran journalist specialising in South Asia affairs, columnist and author. Views are personal. He can be reached at

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