A Himalayan 'Reset'

Speaking in November 2015 to a group of journalists, Khadga Prasad Sharma Oli, Nepal's former prime minister, noted that a "neighboring country" was "bullying" Nepal. “Nepal is currently at the receiving end of an unofficial blockade. But this is the time for us to find an alternative,” he added.

Oli was, of course, referring to India. Nepal's large neighbor to the south had historically been the country's closest partner, but the promulgation of a new constitution last September and the ensuing protests by India-aligned constituencies in Nepal over concerns about that constitution's representativeness set bilateral ties badly adrift. New Delhi didn't shy away from speaking out about what it considered to be a problematic document, greatly angering many of Nepal's Kathmandu-based elites.

Matters worsened when Oli, the irascible leader of Nepal's Marxist-Leninists, became prime minister. New Delhi denied officially sanctioning the blockade referenced in the aforementioned quote; India held that concerns about political instability and protests in southern Nepal had led India-based truck drivers to temporarily stop traveling into Nepal.

Since Oli made those remarks, however, much has transpired in Nepal, with important consequences not just for the country's relationship with India, but for its short-term political stability. Oli himself visited India in the spring, with little to show. Most critically, in July, Oli failed to survive a vote of no confidence before Nepal's parliament after the Maoists, led by Pushpa Kamal Dahal, also known as "Prachanda," pulled their support for his government.

In the aftermath of the no confidence motion, which carried easily, Prachanda and the Maoists formed a new government with the Nepali Congress, the country's largest political party. Under the agreement between the Congress and the Maoists--both of whom are far from ideological fellow travelers--Prachanda will preside over the prime ministerial job for nine months before passing the baton to Sher Bahadur Deuba, the leader of Congress.

For New Delhi, Oli's departure from the apex of Nepal's government was a welcome development. Under Oli, not only had India-Nepal ties reached their lowest point in recent memory, but mistrust toward New Delhi was being broadly disseminated in Kathmandu, where it has existed in some form or another since the collapse of the monarchy in 2008.

Prachanda, funnily enough, first came to power as prime minister shortly after the Federal Democratic Republic of Nepal was declared in 2008, also holding office then for nine months. During his tenure in 2008, he espoused great skepticism about Nepal's historic ties with India under the framework of the 1950 treaty of friendship, which he described at the time as deeply unequal toward Nepal.

Prachanda's second term as prime minister, however, was immediately marked by a degree of pragmatism, recognizing that Oli's government may have erred in allowing ties with India to degrade while simultaneously courting China. The new prime minister immediately dispatched twin special envoys to New Delhi and Beijing to right Kathmandu's bearings. In New Delhi, Oli's envoy, Bimelanda Nidhi assured his Indian interlocutors that Prachanda would endeavor to restore ties to their state before the promulgation of the constitution.

Meanwhile, Krishna Bahadur Mahara, a China expert and Prachanda's deputy, traveled to China to assure Chinese leaders that agreements reached under Oli would remain in place. Oli--both to send a message to New Delhi and to decrease Nepal's overwhelming reliance on India, which became plain during the unofficial blockade--had signed a range of connectivity and infrastructure agreements with China. Mahara noted that his time in China was a success, but reports since have suggested that China is none too happy with Prachanda's plans for Nepal and that Chinese President Xi Jinping may abandon a planned fall visit to Nepal. Nepal's foreign ministry has denied both charges, saying that the relationship with China remains on track.

Nidhi's time in India was meant to lay the groundwork for Prachanda's September visit. The Nepali prime minister arrived in New Delhi on the eve of the one year anniversary of the promulgation of the Nepali constitution and left noting that the "environment of trust" had been restored between New Delhi and Kathmandu. “The visit was more focused on creating an environment of trust with a good intention and effectively implementing the projects for Nepal’s benefits at the earliest as agreed earlier rather than raising many issues,” Prachanda told reporters after landing back in Kathmandu.

Trust is that all-important currency in diplomacy--certainly in India's neighborhood. Prachanda is right that the positive showing in bilateral relations through August and September will be a boon for the relationship and help India and Nepal bring their ties back on track. What is more difficult to address at this point for both New Delhi and for pro-India voices in Kathmandu is the cumulative skepticism toward New Delhi that has intensified in Kathmandu.

Oli, for instance, may have left the prime minister's seat, but is far from an absent voice. Back in Kathmandu, he pledged to oppose a joint statement between Prachanda and Indian Prime Minister Narendra Modi. Oli's insistence, of course, stems from his opposition to addressing the perceived shortcomings of Nepal's constitution by way of an amendment addressing the grievances of the disenfranchised Madhesi, Tharu, and other minority communities. “It is [the Marxist-Leninists'] responsibility to implement and protect the Constitution,” Oli said. “We will not let it become a failure.”

The bad news for New Delhi is that a lot remains to be done in the way of truly restoring an environment of trust across parties in Kathmandu. The good news, however, is that worries of Nepal tilting and drifting into China's orbit can rest easy. In fact, the whole idea of Nepal being drawn into China's geopolitical orbit under the aegis of the One Belt, One Road project was overstated. Currently, Nepal is so interconnected and reliant on India that 98 percent of Kathmandu's trade with a third country first traverses Indian soil. Meanwhile, the geographical hostility of the Nepal-China border, demarcated by the Himalayas, raises the barriers for cross-border integration to the north.

In the near future, observers interested in this diplomatic dyad should look to see if India and Nepal announce major diplomatic initiatives to cement cooperation once again. Modi did extend a $750 million line of credit to Nepal, but most other deliverables to come out of Prachanda's visit were modest. With Deuba (another former prime minister) in line to take over from Prachanda, ties between Nepal and India could improve further yet.

Overall, the prognosis for Nepal-India ties appears to be highly positive after Prachanda's visit to New Delhi. The prime minister's attempt at resetting ties with India will require sustained attention and interest in Kathmandu. Moreover, Prachanda and his allies will need to maneuver deftly to convince critics of close ties with India that the relationship is worth pursuing. If Nepal and India are to truly experience a 'reset' in ties, it may have just begun.