Context: KP Sharma Oli was sworn in as Nepal’s Prime Minister for the third time on Friday, days after he lost a vote of confidence in Parliament. 

• President Bidya Devi Bhandari administered the oath of office and secrecy to Oli, at a ceremony at Shital Niwas, after he was reappointed to the post on Thursday night as the Opposition parties failed to secure majority seats in Parliament to form a new government.
• Oli, the Chairman of CPN-UML, lost a crucial trust vote in the House of Representatives last Monday.
• Oli will now have to take a vote of confidence at the House within 30 days, failing which, an attempt to form a government under Article 76 (5) of the Constitution would be initiated.
• He previously served as prime minister from October 11, 2015 to August 3, 2016 and again from February 15, 2018 to May 13, 2021.
• In this edition of Big Picture we analyse the political developments in Nepal. 

Oli’s legacy

• TIES WITH INDIA, CHINA: Nepal-India relations have been strained during Oli’s two tenures. First it was the blockade, and then the Nepal government published a map including 370 sq km with Kalapani, Lipulek and Limpiadhura , months after India had those areas in its map.
• It is not clear how the thaw came about, but Oli, who had once said in Parliament that Indian officers were hatching a conspiracy to dislodge him from power, has of late retrained himself, nor has he raised the border or other contentious issues in public.
• Oli has distanced himself from China by not promoting projects under Belt and Road Initiative that Nepal is a signatory to, and by not signing an extradition treaty as was promised during President Xi Jinping’s visit in October.

China has enhanced its presence in Nepal, increasing its investment and grants especially after 2006, apparently in retaliation to India and western countries (including the US) aligning with Nepal’s pro-democracy parties to bring about radical changes. India’s interest in Nepal’s internal politics has at times been widely criticised. The new equations between Thakur (whom India had backed) and Oli illustrates a change.

• Recently, China has also been competing with India in its vaccine diplomacy by supplying vaccines, oxygen cylinders and ventilators amid a growing pandemic in Nepal.

TOTAL CONTROL: Oli had gradually vested himself with all powers, bringing the National Intelligence Agency, Revenue Intelligence, Anti-Money Laundering Department all under himself. He brought laws against media and citizen’s privacy .He filled all key posts in constitutional commissions with party cadre.

• Neither the Opposition nor leaders within his party contested it effectively. It started cropping up when Prachanda became sure Oli was not going to honour his promise of sharing the Prime Minister’s chair by rotation. Leaders at the party’s standing committee and central committee started raising issues in public, alleging Oli was running the government without consulting the party on important issues. Oli then began running the government and the party from home, citing security reasons.
• His promises of linking Nepal with China and India by rail, starting waterways trade with India and beyond, and many more remained on paper, which made him the object of ridicule lately. He was also accused of promoting and patronising corruption. He kept quiet even when there was evidence about huge bungling in purchase of medical equipment at the time of pandemic. The fallout was rebellion within the party, and abstention by 28 members during the vote of confidence.

Current Issues in India-Nepal Relations

• Revision of 1950 Treaty: Nepal has asked for a revision of the 1950 treaty, and India has accepted this.
• However, the issue remains stuck because Nepal does not clarify how to strike a proper balance between India’s security concerns and Nepal’s developmental aspirations.
• Recent Border Issue: The Kalapani border dispute’s question has spoiled popular perceptions in Nepal about India.
• Taking advantage of this, Nepal’s current leadership has taken a unilateral decision to draw new maps which show Kalapani, Lipulekh, and Limpiyadhura belongs to Nepal.
• As India also claims these positions, this border issue has led to the lowest point in India-Nepal relations history.

Tug of War Between China & India: Nepal’s geo-strategic location (sandwiched between India & China), has created a tug of war between India and China over Nepal.

• China sees Nepal as a bulwark against the international movement targeting China.

Firstly, the Constitutional question on Madhesi’s: In general, Madhesi’s section of People lives throughout the southern part of the Terai region and has much closer ties with India. The challenges in this regard are, 

• The political rights of Madhesi’s section of people were diluted in their new Constitution promulgated in 2015 which led to wider protests and blockade in Nepal led to the blocking of oil and other essential supplies. 
• Nepal government accused India of supporting Madhesi’s and stated India is interfering in the internal matters of Nepal. Nepal raised the issue in a “trade blockade” at the UN in October 2015. But Madesi’s protest was a spontaneous movement and it had nothing to do with India. 
• One of the foremost scholars, Professor S.D. Muni points out major challenges with the Nepal government as, 
• India’s fears that a Constitution drafted under assertive Maoist leadership may not be compatible with the democratic profile of Nepal. 
• India’s also fears that the Maoists were inclined to and capable of changing Nepal’s domestic power equations. 

For India, Nepal is essential for the region's security, acting as a buffer state.

• Increasing Chinese Influence: Sino-Nepali economic ties began to grow in 2015, but in 2018, China’s influence in Nepal started to gather momentum.
• Having played an essential role in the NCP’s formation, China came to wield enormous influence over the NCP government.
• It resulted in China ousting India as Nepal’s number one investor.
• More importantly, Nepal’s foreign policy under the NCP government became strongly pro-China.
• Moreover, this influence can be evidenced by the fact that China has now stepped up its self-assumed role as mediator in the ongoing crisis.

What are the solutions to improve India-Nepal relations?
Firstly, focus based approach is necessary not only in India-Nepal relations but also for other countries in the region by giving more focus towards Neighbourhood first policy.  

• India should leverage the strategic influence, faster and effective implementation of infrastructure and development projects in Nepal.
• For Ex. Finalising the projects such as Pancheshwar multipurpose project and faster completion of cross-border rail projects such as Jayanagar-Bijalpur–Bardibas, Jogbani-Biratnagar. 
• In 2018 Indian PM asked to shift focus on 5T’s (Tradition, Trade, Tourism, Technology and Transport) to boost the relations. 

Secondly, India can focus on “aid diplomacy” to reduce the trust deficit and also has to continue with post-earthquake reconstruction assistance. Later deepening co-operation in areas like trade, water resources, energy co-operation, etc. 
Thirdly, regarding China’s influence, Experts believe that Nepal’s nearest ports will always be in India and the Gangetic plain will remain its largest market. This is because,  

• The economic feasibility of Chinese trans-Himalayan trade and the infrastructure projects are low, especially when the Himalayan state Bhutan supports India and Nepal is the only other Himalayan state. 
• Though China provides access to Nepal for its seaports, they are situated more than 3,000 km away. 
• All this can sum up by the words of geostrategist, Brahma Chellany. He said, “China can replace India as Nepal’s main provider of essential supplies only by moving the Himalayas southward”. But the ability of the Chinese in project implementation and financial assistance cannot be under estimated. 

Fourthly, establishing a permeant mechanism to reduce the disasters caused by floods in the regions of India-Nepal. 
Fifthly, Mutual respect is the key: The Nepal government has to move away from narrow terms and shift focus towards broadening and inclusion of demands from all sections of society in the Constitution. Nepal also has to stop the rhetoric on territorial nationalism and pulling out China card whenever they negotiate with India. 
Road Ahead

• KP SharmaOli is wily old customer and despite losing a trust vote, only a few days ago manage to cobble up the numbers .This shows his tenacity his colition with the tarai parties means he may point the anti-India card but anything is possible with him because he has shown his uber nationalist self in the past. The biggest challenge with the new PM is dealing with the covid-19 pandemic that has hit Nepal very hard
• As no significant development in bilateral relations appears likely during the prevailing uncertainty, India must encourage consolidation of a people-driven polity, and improve its popular profile. This will only help India reclaim its contested strategic space.