BRI prompts India to boost ties
India and Nepal recently inaugurated the first cross-border oil pipeline in South Asia, which will transport fuel from India to the Himalayan nation.
The project offers a window into the changing economic picture in South Asia. Nepal faced acute shortages of oil and gas in 2015 because of an undeclared blockade at Nepal’s border with India. For a long time, Nepal depended entirely on India for fuel supplies. A crisis caused by the blockade made Nepal aware of the importance of lessening its dependence on India. In 2016, Nepal accelerated the pace of cooperation with China for supply of petroleum products.
Since then, Nepal has become an active participant in the China-proposed Belt and Road Initiative (BRI), in which energy cooperation is an active component. The BRI ended a decades-long supply monopoly of Indian oil and gas, serving as a game changer for the region’s economic development.
The cross-border oil pipeline, built by state-owned Indian Oil Corporation in cooperation with Nepal Oil Corporation, shows New Delhi’s intention to improve ties with the Himalayan nation and balance China’s growing economic presence in the region. India’s influence in Nepal was once unrivaled, but now New Delhi is unable to use its economic presence as leverage to control the Himalayan nation. India was forced to help Nepal’s economic development via energy cooperation. This is a positive change.
Nepal and India have a long-standing relationship. Although China’s influence has grown in Nepal, China cannot replace the role of India in Nepal’s economy in the short term. People who want to promote economic integration in South Asia must prompt India to play a more active role in South Asia’s economy. The BRI can help to achieve this goal.
In light of China’s growing presence in Nepal, New Delhi has been motivated to further strengthen cooperation with the Himalayan nation in the hope of improving its regional influence. Nepal is the first beneficiary of such cooperation.
China and India can reach a common ground while strengthening cooperation with South Asian countries to promote regional integration. Nepal is sandwiched between China and India. The two countries’ cooperation with Nepal can speed up the interconnection of infrastructure between China and India, which could have far-reaching benefits for Sino-India relations.