New US legislation passed by Congress last month to support Tibetans, even those in Nepal, and India’s vaccine diplomacy will fuel a simmering geopolitical contest for influence in the landlocked country, analysts say.
On one side is Beijing, which has in recent years cemented stronger ties with Nepal’s ruling Communist Party and offered large infrastructure investments and economic aid to the country.

On the other are India and the US, both traditional partners of Nepal who are increasingly united in a bid to counter Beijing’s rising influence in South Asia.

All eyes in this tug of war will be on New Delhi on Thursday, when External Affairs Minister S. Jaishankar hosts his Nepali counterpart Pradeep Gyawali. India, which is likely to be a key manufacturing centre for Covid-19 vaccines, is expected to offer Nepal supplies at the meeting, the highest-level official contact between the two men since a diplomatic spat over a map and a disputed area of territory last year.

Along with AstraZeneca’s locally branded Covishield, India’s drug regulator has also given approval to an indigenous vaccine developed by Bharat Biotech and a government institute. Four more vaccines are in clinical trials in India, including Zydus Cadila’s ZyCoV-D and Russia’s Sputnik V.

As part of the new US legislation, Washington will ask Kathmandu to grant legal documentation to exiled Tibetans who have been living in Nepal, which shares a border with China’s Tibetan Autonomous Region. There will also be funding worth US$6 million from this year to 2025 to support younger Tibetan leaders in India and Nepal and preserve Tibetan language and culture, which will come from the US’s Millennium Challenge Corporation (MCC). About 70,000 Tibetan refugees live in Nepal with thousands more in India and around the world.

The Tibetan Policy and Support Act of 2020, which was signed into law by President Donald Trump, calls for the establishment of a US consulate in Lhasa and the absolute right of Tibetans to choose a successor to the Dalai Lama.

China has denounced it, saying Tibet-related issues are domestic affairs.

Ashok Swain, who researches peace and conflict at Sweden’s Uppsala University, said the new Tibet bill raised the possibility of increasing US involvement in Nepal and its neighbourhood.

“If the US-China rivalry develops into a Cold War of the 21st Century, there is every possibility that Nepal might become another Afghanistan,” said Swain, referencing how the former Soviet Union invaded Afghanistan, then a fellow communist country, in 1979 to prevent it from switching its allegiance to the democratic West.

Avinash Godbole, an assistant professor at India’s Jindal Global University who studies Chinese foreign policy, said given the number of Tibetan refugees in Nepal, it was inevitable that China’s efforts to burnish ties with Kathmandu would also include keeping an eye on the Tibetan refugee community.

“China has always felt that Kathmandu is the place where Tibetans communicate with the rest of the world,” he said. “One can say from a Chinese view, a lot that happens in Kathmandu goes unnoticed and that’s why they want to be there in a proactive way.”

China’s strategic interests in its neighbour Nepal, which in 2017 signed up to be part of President Xi Jinping’s ambitious connectivity project, the Belt and Road Initiative, have grown in recent years.

Beijing’s foreign aid agency, the China International Development Cooperation Agency (CIDCA), between 2014 and 2018 pumped about US$1.63 million into various health, education and transport sectors in Nepal’s northern districts bordering Tibet.

In addition, Chinese companies are building cement factories and highways, including one linking Nepal’s capital in the east with Terai in the south.On December 20, after Prime Minister K.P. Sharma Oli sparked a political crisis by dissolving parliament, citing a lack of unity between squabbling factions of his party and calling for fresh elections, China sent a senior Chinese Communist Party (CPP) official to assess the situation.

Seven ministers have since quit Oli’s government, while protesters angry at political infighting as the country battles the Covid-19 pandemic burnt effigies of the prime minister.

Guo Yezhou, a vice-minister in the CCP’s International Liaison Department, which manages relationships with foreign political parties, met politicians and government leaders.

Ram Karki, a Nepal Communist Party politician from the non-Oli faction, said China was concerned about the party as a “reliable and trustworthy partner”.

“I sensed that there are some concerns in Beijing over whether Nepal will approve the [US funding via the] MCC,” said Karki, who attended a meeting with Guo and the Chinese delegation.

“Such a move could lead to a change in the geopolitical dynamics, and China’s concerns from its point of view are not entirely wrong,” he told The Kathmandu Post last month.

In comments to This Week in Asia last Friday, Karki, referencing the MCC, said Nepal “should only approve grants that will not harm our relations with our immediate neighbours like China”.

He added that as parliament had been dissolved, the caretaker government was unlikely to discuss the implications of the US legislation for Nepal.

Mohan Malik, a professor of strategic studies at India’s National Defence College, said given China’s success at “elite capture” in Nepal, Kathmandu was unlikely to act in a way that would antagonise Beijing or jeopardise its investments.

“This great Himalayan battle of wits is likely to intensify in the years to come as China, India and Nepal prepare for the post-Dalai Lama era,” he said.