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Seminar                         Summary Reports   


Geo-political Contest in Afghanistan and its impact on India ’s Interests

"Strategic Options" by Brig Rahul Bhonsle (Retd)

"The Regional Contest" by                 Dr Shanthie D’Souza

"The Afghan Riddle" by Shri Hormis Tharakan 

"The Way Forward" by 

 Ambassador S K Lambah, IFS (Retd)


CHina's Defense Modernisation: Implications for India 

"Upgradation of Chinese Forces- Implications by

Mr. D.S. Rajan

"Missile and Space Modernisations" by 

Prof R.  Nagappa,

"A Strategic Review" by Air Chief Marshal Fali Major (Retd)

"Economic Implications " by 

Prof Srikanth Kondapalli

"The Way Forward" by Amb. C.V. Ranganathan

Complexities of the situation of Iran: India's strategic interests and options

"A Historical Perceptive" by           Amb. Akbar Mirza Khaleeli                          "A Strategic perspective" by           Vice Admiral (Retd)         P J Jacob                            "A Media perspective" by Shri Kesava Menon. 

Indo-Myanmar security relations: Measures to improve trade and economic ties

Presentations by:

Col. R Hariharan (Retd),  

Dr Sayed Ali Mujtaba,  

Shri T P Sreenivasan,  

Developments in Nepal: impact on India

Presentations by:

  "A Security Assessment" by            B. Raman

  "The Current Scenario" by               Shri K V Rajan, IFS (Retd)

  "Implications for India" by Maj. Gen (Retd. Ashok K. Mehta  

  "Current Situation and its import" by     Shri Gururaj Rao

Recent developments in Nepal and their impact on India's security

Presentations by:

  "The Political Scenario" by Dr. Arvind Kumar

  "Analysis of Political events" by Dr. Smruti Pattanaik 

  "Implications for India" by Maj. Gen (Retd.) Dipankar Banerjee

  "Strategic Analysis and Opinions "by Maj. Gen (Retd.) Ashok K. Mehta


Whither Pakistan?

"The Crisis in Pakistan"  by

Captain Alok Bansal, IN

"A security assessment" by 

Shri S Gopal

"A Strategic Overview" by M K Bhadrakumar, IFS (Retd)

"Whither Pakistan?" by Lt Gen Satish Nambiar (Retd)


India-Russia strategic relations in the new world order 


" Vision and Realityby Ambassador Shri Rajiv Sikri  (Retd)

" Historical Perceptive and Current Realities"

by Amb. A Madhavan, IFS (Retd)

"Defence Cooperation Aspectsby

Air Marshal N Menon (Retd)

Changing contours of Indo-US relations: Challenges, Risks and Opportunities

Presentations by:

"A strategic review"  by Dr. Brahma Chellaney

" A historic perspective"

by Amb. Krishnan, IFS (Retd)

"India's options in the global senario" by

Lt Gen S. S Mehta

"Indo-US core interests" by

Shri Aravind Sitaraman


Look East Policy  

Impediments to India's Look-East policy’: suggested remedies

" India's Look-East Policy: Vision and Reality"  by Ambassador Shri C.V Ranganathan (Retd)


" Impediments to India’s Look-East Policy – China’s Reservations and Suggested Remedies Realities"

by Shri. D.S. Rajan  


"Maritime Aspects of our Look-East Policyby

Vice Admiral (Retd)   P J Jacob

Seminar Summary Report



  As compiled by Shri A Madhavan, former ambassador of India and a current member of Asia Centre;

  9 August 2008 IAS officer’s Association, # 1, Infantry Road, Bangalore -1

           Asia Centre has been conducting a series of seminars and discussions to review India’s Security environment in the Sub-continent. As a part of this of Series, a seminar was held on 09 August 2008 from 10 A M to 1 P M on the topic “Developments in Nepal: Impact on India” at the I A S Officers’ Institution, # 1 Infantry Road , Bangalore . The seminar was presided by Shri A P Venkateswaran, former Foreign Secretary and chairman of Asia Centre.

The following distinguished speakers addressed the seminar: -


"A Security Assessmentby

 Shri B. Raman, Additional Secretary (Retd), Cabinet Secretariat, GOI and Current Director of Institute for Topical studies, Chennai.

"The Current Scenario" by                                                                                                              Shri K V Rajan, IFS (Retd), Former Ambassador to Nepal and Current Member of the National Security Advisory Board.                        

"Future of Indo-Nepal relations" by                                                                   Maj. Gen (Retd.) Ashok K. Mehta, Milirary analyst and writer on Nepal related developements.                                                                                             

Current Situation and its import" by                                                                                                    Shri Gururaj Rao, Director (North), Ministry of External Affairs, New Delhi

The presentations were followed by a lively discussion session. Nearly 45 Asia Centre members and invitees drawn from retired officers of Indian Administrative Service, Foreign Service & Defense Services, academics and scientists attended the seminar.

This report summarises the essence of the presentations and the discussions that followed.


Lt. Gen. (Retd.) Ravi Eipe, Director of Asia Centre,

Lt. Gen. (Retd.) Ravi Eipe explained the context of Nepal-India relations since the last seminar on the subject on April 8, 2006 .  Nepal is in transition, with the Maoist party yet to form a government after its electoral victory in April 2008.  This country has strategic implications for India as it is interposed between China and India and has open borders with India .  Nepali Gurkhas, famed for their valor and loyalty, still serve in the Indian Army, which continues to recruit new soldiers from Nepal every year.  Gurkha ex-servicemen number 2.5 lakhs; and they draw Indian pensions.  The leader of the Nepal ’s Maoist party, Prachanda (original name, Pushpa Kamal Dahal), has taken pains to convey the image of a moderate with a favorable attitude towards India , though his earlier anti-Indian sentiments and close links to the Naxalites are known.  ‘What are the true colours of his movement?’ is a serious question for us.  He has also said in interviews that he wants Nepal to maintain “equidistance” between India and China .  Will he move closer towards China ?  If so, what are the consequences for India ?


 A security Assessment

By Shri B. Raman

His paper, entitled the ‘Rise of Maoists in Nepal : Implications for India ’ has been uploaded on his website at .A gist follows:

Prime Minister Manmohan Singh reportedly assured Nepal ’s caretaker Prime Minister, Girija Prasad Koirala during the SAARC summit conference in Colombo on August 3, 2008 on continued Indian support for Nepal ’s democratic transition.  He also commended the peace process and the elections to the Constituent Assembly ( April 10, 2008 ).  Koirala’s presence at the summit had raised a controversy.  He had to apologise for failing to consult the Communist Party of Nepal (Maoist) (known as the CPN (M)), -- the largest single party in the Constituent Assembly --- and the Communist Party of Nepal (United Marxist-Leninist) (known as the CPN (UML)).  The newly elected President, Ram Baran Yadav was a more appropriate choice, they said.  This incident highlighted the persisting suspicion and distrust in inter-party relations after the elections to the Constituent Assembly.  The Maoists even suspected the Indian hand in a conspiracy to deny them the fruits of office.

However, the main parties agreed on August 5, 2008 to form a national unity government led by the Maoists.  It is to include the Nepal Congress, the CPN (UML) and the Madhesi Janadhikar Forum (MJF).  The last named party represents people of the Terai region bordering India .  The Maoists are to head the coalition, a decision reached after difficult negotiations.  The government will remain in office at least until the new constitution is approved by the Constituent Assembly.  This may take two years.

The negotiations have been tough.  Hence distrust will probably remain.  There was an earlier controversy about the election of Ram Baran Yadav, a Madhesi, as president, on July 24, 2008 .  He defeated the Maoist candidate. The Maoists reacted by withdrawing from talks on government formation.  They had to be cajoled to rejoin the talks.

The Interim Government had paved the way for the elections to the Constituent Assembly and the historic declaration of Nepal as a republic ( May 28, 2008 ).  The 240 year-old monarchy was abruptly terminated.  Earlier, the government had given Madhesis more representation in local governance in order to end the sixteen days of strikes and protests paralyising Terai and blocking food and fuel supplies to Kathmandu .  Terai is the country’s agricultural heartland, with almost half the population of Nepal , producing 80 percent of its economic output.  It is also the main transport link to India , which is Nepal ’s biggest trading partner.

The Maoist leader, Pushpa Kamal Dahal, known as Prachanda, is set to lead the government of national unity for the next two years.  His party, CPN (Maoist) has 220 seats in the 601-member Constituent Assembly, double the number of its nearest rival, the Nepal Congress.  The Maoist party cadres are highly-motivated and trained, capable of prevailing in political negotiations through muscle power if not voting power.  It accords priority to the integration of the suitable men from its militia into the Nepal Army.  This would give the army an ideological edge in order to make it an instrument to capture state power for the Maoist party.  India must be concerned about this possibility.

In the new government, the Maoists will be dominate as shapers of  state policy, but they will not yet have total control of it, which will be their ultimate objective.  The Maoists have used a mix of Chinese and Soviet tactics to reach this stage.  They mobilised the peasantry in rural areas and resorted to street agitations in Kathmandu and the Terai region.  If Nepal establishes its version of a proletarian dictatorship, it would cross Indian interests.  Can India do anything by itself or with other countries to prevent such a scenario?

Prachanda has reassured India that his policy would be guided by political equidistance between India and China , but not economic equi-dependence.  He avers that Nepal ’s economic links with India are too strong to be diluted by seeking close relations with China .  He has spoken of favouring closer ties with New Delhi on the basis of new relations, which take due account of the special features of geographical, historical and cultural proximity.  (Karan Thapar’s interview, CNN-IBN, May 20, 2008 ). 

But Prachanda is determined to raise two issues relating to India : the 1950 Treaty between India and Nepal and the entire set of bilateral agreements.  Convinced that the 1950 Treaty is unequal, he wants its terms amended.  But he is evasive on the question of the future of the open border between the two countries and the right of Nepalese to live in India as citizens.  He is keen to revise the provision on Nepal having to consult India before acquiring arms from other countries.  He has avoided comment on a charge that Nepal ’s lack of economic development is due to its open border with India . 

Prachanda also wants to review the recruitment of Gurkhas to the Indian army and other armies.  He wants this subject debated in the Constituent Assembly, taking account of the historical background.  But he is aware that an immediate stop to such recruitment would damage employment prospects for young men in Nepal .

Nepal-India economic relations hinge on trade, aid and investment, with India as the dominant partner.  Nepal ’s exports to India constitute about 55 percent of its total exports.  Nepal ’s imports from India amount to about 44 percent of the total imports.  Joint ventures number more than 265, the working firms running to about 100.  Indian investment in Nepal amounts to 30-40 percent of the total Foreign Direct Investment.  Indian investment, the value of which runs to several billion rupees, is spread in diverse sectors: tourism, infrastructure, consumer goods, garments and carpets.  Indian companies like Hindustan Lever and Colgate have set up manufacturing plants in Nepal , exporting their products to India .  Infrastructure projects cover roads, bridges, hospitals and airports.  India has built about 80 percent of the east-west highway in Nepal , apart from contributing to other road building, from Kathmandu to other towns.  India has also helped in building many bridges across rivers. 

Nepal-China trade amounts to ten percent of the total trade.  Chinese investment projects are also much smaller in number compared to Indian ones.  They are in hotels and restaurants, electronics, radio paging, garments, nursing homes, irrigation, hydel-power and civil works.  China is also aiding Nepal in road building, but the total length of such roads is much smaller than that of roads built by India . 

China and Nepal signed a Memorandum of Understanding in 2001 on cooperation in tourism.  This was followed by an Air Services Agreement, with Air China opening a link in 2004 from Chengdu to Kathmandu .  Since 2007, another link has been started between Guangzhou and Kathmandu .  Nepal Airline has air services, Kathmandu-Shanghai and Kathmandu-Hong Kong. 

Sino-Nepal military cooperation has grown since 1998.  The Nepal Army has been sending its men to Chinese military institutions for training and study.  The scheme includes adventure training with Chinese officers participating.

Nepal-China relations have expanded, but they are not as multi-faceted as Nepal-India relations.  The latter are more useful and important to Nepal , which has benefited greatly from its privileged economic relationship with India .  If Maoist-led Nepal seeks equidistance in economic relations as between China and India , it would be counter-productive for the country.  Prachanda may understand this, but not many others in his party.  Bhattarai (the deputy leader), for instance, has blamed the open border with India for Nepal ’s backwardness.  It is still unclear if Prachanda sincerely esteems good relations between Nepal and India .  Pro-China intellectuals among the Nepalese openly express their dislike of India .  Chinese spokesmen emphasise that Sino-Nepal relations are based on trust, equality and sincerity, insinuating that India does not treat Nepal as an equal partner.

The Chinese Ambassador to Nepal , Zheng Xianglin, said ( August 5, 2008 ):  Nepal is situated in a favorable geographical position in South Asia and is a passage linking China and South Asia .”  This remark highlights China ’s interest in strengthening its presence in the subcontinent through Nepal .  It indicates China ’s ‘Look South’ policy, like India ’s ‘Look East’ policy.  China already has a strategic presence in Pakistan , Sri Lanka and Bangladesh .  With the Maoist party in power in Nepal , China will try to repeat this there.  China has acquired the status of an observer in SAARC.  Some members of the group would like China to come in as a member to counter-balance India .  Nepal may be one of them under the new regime.

  China has opened up road links from Tibet to Nepal and is extending the railway line from Lhasa to Kathmandu .  These links will add to India ’s security threats from the north.  China is also hoping that under the Maoist party Nepal will be able to check the anti-China activities of the Tibetan refugees who have been agitating against Han colonisation of their homeland.  This small community is used by the US Radio Free Asia for broadcasts beamed to Tibetan listeners.  China wants to pre-empt India and the US from trying to destabilise its dominance in Tibet if there is unrest following the Dalai Lama’s demise. 

India is obliged to compete with China for political influence and economic benefits in Nepal , as it is in Myanmar too.  India has lost its strategic monopoly in Nepal with China ’s growing influence there.  In Myanmar too the military government tends to choose Chinese interests before Indian interests, if a choice becomes necessary.  Myanmar ’s ruling junta is both fearful of China and grateful to it for its support in the UN Security Council and elsewhere.  If the Maoist regime in Nepal has to choose between the two neighbours, it may opt for the Chinese, not so much out of fear, but more out of ideological affinity. 

Nepal ’s relations with Pakistan have not been of major concern to India , but may become so if Pakistan uses Nepal with impunity through agents and the ISI to harm Indian interests.  About two decades ago, Khalistan organisations based in Pakistan used to operate through Nepal .  In the 1990s and later, jihadi organisations have also done so.  Mafia groups like Dawood Ibrahim’s, based in Pakistan , use Muslims in the Terai region for disruptive strikes against India .  Some suspects from the Mumbai blasts of March 1993 escaped to Karachi via Kathmandu .  Black money from India is laundered in or via Kathmandu , which is also the node for pumping in fake currency notes by the ISI into India .  There was a case of timely action by India which scotched the funding of a TV cable network in Nepal by Dawood Ibrahim.  Nepal ’s cooperation with India to frustrate such activities is important. 

The police in India and Nepal had earlier cultivated mutual understanding and cooperation.  Nepal ’s police officers used to come to India for training.  Under the Maoist regime, these contacts may lose much of their old informality. 

On Nepal-US relations, which are still in the formative stage, Prachanda has not revealed his hand, but the US Embassy in Kathmandu has reportedly established contact with the Maoist party. The US priority will be to discourage the Maoists from moving closer to China .  Such a policy by the US would suit India ’s interests too.  For the Maoists, one priority would be to get the US remove CPN (M) from its list of terrorist organisations.  This is feasible under US rules and regulations.

The Maoist party’s decision to give up armed struggle and join the democratic mainstream may not have a great impact on the Maoist movement running down central India .  The Nepal Maoists depended on their Indian counterparts in material and ideological terms rather than the other way round.  The Indian Maoists have complimented the Nepalese counterparts for winning the elections, but also expressed skepticism about the latter’s democratic debut. 

The Nepal elections were generally seen to have been free and fair.  The Maoists did well in the elections since the people preferred them to the other parties which had been discredited.  India has no option but to work with the new regime so long as its policies do not turn anti-Indian.  If such adverse policies are adopted, India should have the courage and confidence to correct the situation with the help of its well-wishers in Nepal .  There is still a reservoir of good will for India among the Nepalese.  The well-wishers should be nurtured and encouraged to be active, not in order to undermine the Maoists, but to prevent anti-Indian distortions.

The Current Scenario

By  Shri K.V. Rajan, former Ambassador to Nepal :

Four months after the historic elections in Nepal ( April 10, 2008 ) the new government had not been formed.  Longer delay would squander the unique opportunity of ending the country’s continuing socio-economic-political crisis.  Even if a new government is formed, the prospects do not look bright for smooth governance, the peace process and Constitution-making within two years.

The likely scenario may well be a façade of democracy and collapsing governance, a breakdown of law and order, with serious implications for India ’s security. On the Indian side of the border, administrative deficiencies complicate the situation further.  India is in no position to denounce political infighting in Nepal .  But India has to be proactive, not only to safeguard its own security concerns, but also to mitigate the human cost to Nepal from instability and disorder.

Positive elements:

·               The holding of the April 10 election was undoubtedly an achievement in itself.  It opened up the possibility of a new, inclusive, democratic Nepal .

·               The Maoists have come into the mainstream.  It is a unique example of an extreme left insurgency which has turned to democratic means.  It is unlikely that the Maoists will take to the jungle again. They are now locked into the democratic process.

·               The April 10 election, though flawed, was credible enough and relatively free of violence, belying many fears to the contrary.

·               The transition to the Republic has been peaceful, with Gyanendra refraining from resisting the popular call for an end to the monarchy.

·               The election result is certainly a mandate for change:

§      The Maoists have won emphatic victory, although short of a parliamentary majority.

§      Madhesis have become a new power centre, with their men in the 4th, 5th and 6th places in the new Constituent Assembly.

§      Most of the old leaders from mainstream parties, including the Koirala family, have been rejected.

§      The monarchy is also rejected, even in a ceremonial role.

§      The CA is the most inclusive body in Nepal – Dalits (50 out of 575); Madhesis (204); Janajatis (192); Women (190).

§      The Maoists are showing flexibility on several issues in response to demands by other parties.

Negative elements

§ Four months after election, the government was not yet formed.

§ The election results tend to paralyse government and the process of constitution-making.

§ The Maoists won 220 of the 575 seats, more than combined total of the NC and the UML (213), but the Maoists are at the mercy of other parties in the sense that if the latter act as spoilers (which they clearly wish to do) they can block decisions.

§ Political leaders tend to bypass the CA, indulging in horse-trading out of personal ambition or party interest.

§ Overall, a culture of impunity and violence prevails. The much touted “New Nepal” is currently a republic of uncertainty, and may well become republic of fear.

          Other deficits:

          Mistrust among the political leaders and parties; political opportunism, shifting alliances, absence of leaders with vision and stature.

         Poor institutional underpinnings; politicised bureaucracy, demoralised police, the unpopular army and partisan media.

The election of the President, the Vice President and the Speaker came about after prolonged bargaining and horse-trading.  This does not inspire confidence, as both the President (a NC-Madhesi candidate) and the Vice President (an official candidate of the Madhesi parties) lack credibility. The election result was due to the determined bid by the other parties to keep the Maoists out.

The core issue of security management was left unaddressed. The Army is unwilling to accept both the integration of Maoist cadres and the “democratisation” move for the intake of Madhesis. The higher political profile of the Army Chief, encouraged by G.P. Koirala, not a good sign.

The main concern is not so much the integration of Maoist guerillas as the proposal for compulsory military training and periodic refresher courses for every Nepali adult.

 Basic Question: “Can Maoists change their DNA?”

 The jury is still out. Many of their actions and statements do not inspire confidence that they have decisively given up violence and intimidation.

On present evidence, it seems that they may have changed their strategy and tactics, but not their ideological goals.

The Maoists themselves emphasise that their success is due to the “fusion of ballot and bullet”, and insist that they have not abandoned armed struggle.

They do not regret their past violence; they rationalise their present violence. The activities of the Youth Communist League clearly indicate that the Maoist want to retain their parallel police to enforce their will.

The Maoists’ dilemma: their desire to lead the government and occupy key posts, although aware that parliamentary arithmetic will not enable them to deliver on promises.  Hence their frequent threats to stay out of the government unless their terms are accepted.

Recourse to non-democratic methods must be corrected, perhaps in concert with other countries.

The Maoists are the only party with a clear agenda, motivation, strategic thinking, organizational strength, discipline and leadership.They will probably adopt all means to ensure their sweeping victory in the next election two years hence.

Internal divisions in the Maoist party notwithstanding, there is no serious threat to its party discipline and unity.

Regarding India , the Maoists have generally moderated their rhetoric; they have regular contacts with Indian leadership and realise that they need India in order to remain in power.  However, they openly assert eagerness to strengthen ties with China . Maoist leader Mahara went to China , Prachanda has often expressed keenness to visit China , and the Maoist appeasement of China on Tibet , are early indications of a definite Maoist tilt towards China .

Maoist demands, such as the revision of Nepal-India Treaty of 1950, ending Gurkha recruitment to the Indian Army, renegotiating   agreements on water resources, and regulating open border, should be taken seriously, even if the Maoists do not press them for some time due to their preoccupations with consolidating political power.

The Maoists will not directly provoke India , but will find ways to assert their nationalism, even using former palace loyalists, with whom they have a natural convergence, especially on equidistance between India and China .

Their success will embolden Indian Naxalites to emulate their example: to use violence until the state is discredited and abdicates its responsibilities, then give the impression of joining mainstream competitive politics, but continue to promote their ideological through a combination of democratic and undemocratic means.

 The Nepali Congress and the UML are demoralised and directionless. Both lack inner party democracy (especially the NC)        and suffer from serious inter-party divisions.  Koirala’s age and         failing health should be matter of concern for the NC’s future. He was evidently keen on continuing as Prime Minister, falsely implying that     he had India ’s support.  If the UML joins the Maoists in the new      government excluding others, the NC may be able to revive itself    in partnership with the Madhesis.

 The Madhesi Phenomenon

The MJF, the TMDP (widely believed to be supported by India)  and two factions of the Sadbhavana Party have emerged as important power centres, but they tend to overplay their hand, creating a backlash (e.g. their demand for a Madhesi state, their winning the posts of both the President and the Vice President, the Vice President taking the oath of office in Hindi. One should not exaggerate the pro-India implications in Madhesi posturing, though they can be an effective counterweight to the Maoists).


·               There is general goodwill for India on account of its role in bringing the Maoists and political parties together and in “mainstreaming” the former.

·               However, there is dissatisfaction in all parties because of unrealistic expectations that India will favour them.

·               There is a general perception that India has its own security-driven agenda.

·               Indian moves on future political crisis situations, the integration of the PLA in the Nepal Army and in Madhesi issues will be closely watched;

·               India should explore the possibility of reaching some understanding with China so that either side is assured that its legitimate core concerns will be respected by other.

·               The “Special relationship” as defined in the 1950 Treaty is already dead; and mega-hydel projects are most unlikely to take off because of increasingly nationalistic posturing by the Maoists.

·               India should avoid being overly engaged on Terai issues or with Madhesi groups.  This would be counterproductive. The real problem for India could be, not so much the Maoist-led government as the prospect of instability and breakdown of law and order and the unraveling of Nepal in case the Maoists keep out of government.

·               India ’s present posture is a mix of laissez-faire and the concept of ‘responsibility to protect’.  India has in the past experimented with a Nehruvian mix of calibrated democracy and British-India neo-colonialism, the Gujral doctrine; the BJP’s mix of hegemonism and Hindutva, as the base for a special relationship.

·               The principle of ‘responsibility to protect’, if invoked with sensitivity and concern for well-being of Nepal rather than support for a particular leader or party, may not be controversial.  It may even be welcomed by the Nepalese, who desperately want peace and are disillusioned with the Maoists as well as main political parties. (Example: India ’s success in bringing the Maoists and political parties together against the absolute rule of Gyanendra).

·               India’s priorities should be: effective management of Nepal’s sensitivity as a small, landlocked country; economic inter-dependence; and integration, especially through sub-regional projects involving Nepal’s Terai and the adjacent Indian States; avoiding visible dependence on the power centre of the day but dealing transparently with Nepal as a nation, so that there is a strong popular support for Indian policies; anticipating and defusing misunderstandings before they became irritants; adopting a low profile diplomacy which gives sense of security to all political actors, especially in the present unstable situation.

Future of Indo-Nepal Relations

By   Maj Gen (Retd) Ashok Mehta, 

He recalled his numerous and extensive visits to Nepal , his experience in recruiting Gurkhas and with ex-servicemen drawing pensions for their service with the Indian Army. 

The questions arising for us from the developments in Nepal are:

1) Can we trust the Maoists?  We must wait to find out.

2) Can the old Nepal change to a new Nepal ? 

3) Will China and Pakistan gain increasing influence in Nepal ? 

India must be vigilant not to be caught on the wrong foot.  The peace process has brought the Maoists to power.  A left-wing government in Nepal could be a stimulus to Indian Maoists.  We should consider the Maoist rhetoric as a phase in the past.

The Nepalese are keen on building up their country anew.  It is a work in progress, though they did have some starting trouble. 

Nepal has a history of revolts and rebellions.  So the Maoist upsurge is not completely new.  While previously the country was ruled by an elite, a basic change has taken place, with popular involvement and empowerment. 

The people’s war by the Maoists has achieved its main objective.  The election of the Constituent Assembly is a triumph for them.

Some Maoists even consider that their struggle has ended prematurely with no storming of the palace.  It is the first time an underground rebel group has come to power through elections and become the main parliamentary party.  It is also the first time the Madhesis and other ethnic groups have secured significant positions.  Outside observers went wrong in predicting the results of the elections. 

How to deal with the Maoist-led government? is the question.  It is not a purely Maoist government.  It is worth noting that ten years of ‘people’s war’ could not achieve what the 19-day ‘andolan’ (protest movement) did.  The Madhesis have also taken to their own ‘andolan’. 

There was an intelligence failure on our side in not foreseeing the victory of the Maoist wave.  The mood was changing: a claim that it was now their turn to rule.  Even ex-servicemen in Nepal tended to support the Maoists. 

Coercion played a part in the Maoist tactics.  They also appealed to the ‘sons of the soil’ sentiment.  They have been locked into the peace process by the people. 

Madhesis have gained one-third of the seats, though hitherto scorned as ‘dhotiwallahs’.  Now they have a power share.  They contribute 77 percent of the revenues of Nepal , but only 7 percent is spent on their region. The Maoists will not accept special demands by the Madhesis.  The other parties, the MJF, the UML and the NC will find unity difficult to achieve. 

Now a national government is needed until the constitution is framed.  Will it turn into a presidential rule?  There are various possible combinations for a coalition.  An alliance of the leftist parties is one.  There will be a generational change when the older politicians are gone. 

The Maoist aim is to go for elections in two and a half years and get a two-thirds majority.  The final objective is to transform Nepal into a one-party state, similar to the West Bengal model.  (Prachanda has been invited to Kolkata by the West Bengal government). 

India ’s main change of policy is giving up the concept of relying on “the twin pillars” (the monarchy and the democratic parties) and recognising the people’s choice.   Both the Foreign Minister and the Congress high command have accepted the Maoist victory.  It was not politic for the Indian government to say that it would have preferred the Nepal Congress to be the main party in Nepal , but that it could work with the Maoist party. 

The Indian government has sponsored a conference on Nepal and India to take place in Patna in September.  It is noteworthy that Mrs. Bhattarai has spoken of a mandate by the people for a new Indo-Nepal relationship.  Nepal wants “equi-proximity” with China and India , not distance from either of the two neighbours.  Prachanda, who had said in 2007 that Nepal looked to China for support, has observed in 2008. “ India has changed; so we have changed.”  This denotes a pragmatic attitude. Without India , Nepal cannot prosper.  (Prachanda’s interview to the Hindu carries the same message of pragmatism). 

The leftward direction in Nepal could radicalise the youth and increase the strength of the YCL.  The Maoists have good contacts with the Left front government of West Bengal .  The ideologues still believe in armed struggle.  There is an active linkage with the Indian Maoists. Prachanda has held some discussions with the Indian Maoist leader, Azad. Azad has, however, attacked Prachanda for making compromises with the enemy. 

China has different concerns, relating to Tibet ’s future.  The Chinese backed the King and the monarchy, when they had combated the Maoists for “anti-governmental activities”. China is now trying to regain its influence in Nepal . 

The US too, after opposing the Maoist wave in Nepal in a sustained campaign, is now adopting a nuanced policy.  It wants to check China gaining greater influence in Nepal .  Richard Boucher (Deputy Secretary in the US State Department) spoke of ‘convergence with India ’ on some matters concerning Nepal , but also of ‘some divergence’.  The US is highly antipathetic to the Nepal Maoists, but will watch the actions of the Maoists to assess the trend. 

India and Nepal have had close military level relations.  India ’s Defence and External Affairs Ministries have to coordinate the policy direction for the future effectively.  The ex-servicemen lobby could be engaged to suit Indian interests.  There is a residual threat in that Maoist cadres have not given up their arms fully.  The Maoist guerrillas cannot all be absorbed in the Nepal Army.  What happens to the militants left out, especially those with arms, is a matter of concern. 

The Madhesis are a potential tinderbox.  Pahadis who come to the plains and settle in the plains could cause friction.  The Madhesis proximity to UP and Bihar is a worry, if armed gangs which include criminal elements infiltrate into India .  With some 12 million Nepalese living in India , we have to exercise constant vigil to ensure that there is no disturbance of law and order from them.


Current Situation and its import

He is currently Director (North), Ministry of External Affairs; He previously served in the Indian Embassy, Kathmandu and later was the Consul General in Birganj in Nepal , from 2001 to 2007.  A gist of his talk is given below.

The elections to the Constituent Assembly have changed Nepal ’s politics irrevocably.  The results were mainly determined by the youth of Nepal and the mrginalised groups, including Janjatis, Madhesis, Dalits and women voters.  They voted for political change.  This verdict by a more inclusive and plural society replaced the hill-centric nationalism.

The Maoists emerged as the single largest party, securing 29% of the votes and 38% of the seats (226).  But they do not have a simple majority in the house.  The political parties of Nepal deserve to be commended on the elections.

During the peace process, Indian policy was to engage with all the key political actors.  India ’s stand was that it was for the people to decide who should govern them and how.  India is proud to have played a part in this historic transformation.

One big gain is that the Madhes now has a voice in the Constituent Assembly which cannot be ignored.  The Madhesis have one third of the seats.  They form a new force in politics.

It is not clear how the new Nepalese identity would be defined.  It could be based on a narrow cultural and linguistic aspect or a broader sociological spread.  The people’s mandate and the trend of successive amendments to the constitution have made Nepalese politics and institutions more inclusive.

Forming the Government.

After the post-election euphoria, the election of the president and vice-president signified a big setback to the Maoists.  It shows the increasing polarisation of politics and the fragility of the peace process in Nepal . 

The fractured mandate of the Assembly should enjoin all the parties to cooperate and form a government of national unity.  A government based on a single party or an alliance would be short-lived and unstable.  The CPN-M as the largest party has earned the right to lead the government.

Hitherto the ruling elite in Kathmandu had whipped up an anti-Indian psychosis to bolster patriotic sentiments.  Governments were formed and changed frequently:  there were 16 governments in the 18 years between 1990 and 2006.

Issues before the Government.

The big issue relates to the disposition of the 19,000 armed Maoist combatants now quartered in camps.  The Maoists want them integrated with the Nepal Army, which, for its part, is wary of its integrity being impaired thereby.  The other parties are also wary of it.

Regarding the Indo-Nepal Treaty, the new leadership in Nepal must clarify whether it wants to revise the treaty fully or only to amend it.  India and Nepal held talks at the level of Foreign Secretaries in February 2001 on reviewing the treaty.  We remain willing to discuss the issue.  We see no great difficulty in arriving at a mutually agreed revised text.

The Maoists have spoken of ‘regulating’ Nepal ’s open border with India .  We too want some regulation, but no restriction of movement, given the close kinship ties between people on either side of the border.

Gurkha recruitment to the Indian Army has been opposed by the Maoists.  The new government has to decide its policy on this issue.  If recruitment is stopped, the youth in Nepal will be left without an attractive avenue of employment.  It is noteworthy that pension payments from the Indian Army help several million households in Nepal .

The new Nepal is a diverse Nepal .  It answers to a more inclusive and egalitarian political structure with more ethnic identities and cultural differences.  The ‘Jan andolan’, particularly with respect to the Madhesi and other ethnic groups in the Terai, has helped this broadening.

  Indo-Nepal relations:

Geographical necessity and intense people-to-people relations ensure that the two countries simply cannot look away from each other.

70 percent of Nepal ’s foreign trade is with India .  40 percent of its FDI is from India .  So are 40 percent of its foreign tourists, 100 percent of its fossil fuels and 16 percent of its dry season power.  The Nepal rupee is pegged to the Indian rupee.  This, with more trade integration, has given greater monetary stability to Nepal than many less developed countries in conflict situations enjoy. India ’s economic aid to Nepal is, in money terms, value and spread, easily the highest.

There are high stakes in hydropower, irrigation and flood control.  Cooperation in these areas could transform not only Nepal , but also states like Bihar , UP, Uttarkhand and West Bengal .  It would also enhance bilateral relations.

After nearly five decades of politicised mutual suspicion and distrust, a beginning has been made in this area of cooperation ( Upper Karnali , Arun III, and West Seti ).  Nepalese are realising the value of cooperation with India for economic benefit. 

We must make concerted efforts to engage the Nepalese living in India , who number around 9 million.  They could help to neutralise the anti-India campaign which was used as a strategic tool by the Kathmandu ruling elite until now. 

Since Nepal is a much smaller country, India needs to be the more generous partner, with more sensitivity for the concerns and compulsions of the former.

There is a tremendous untapped potential for a mutually rewarding partnership between the two countries.  It is for Nepal to decide the pace and the terms of such a bilateral relationship.

The transition to a stable, democratic, inclusive and peaceful polity in Nepal would answer to the aspirations of its people and also serve our long-term interest.


The discussion began with three questions.  1) Whether there are Maoists among the recruited Gurkhas for our army?  2) What would have happened if the king had not agreed to go in the face of the general demand for the end of the monarchy?  3) Have the Maoists lost some relevance after their victory without a revolution?

Maj. Gen. Mehta said that the first turning point of the transition was the palace massacre, which brought Gyanendra to the throne.  One of the possible scenarios at that time was to retain the monarchy, but in a ceremonial form in the parliamentary system. He explained the different categories of Gurkhas who were drawing pensions. Some of them were sympathetic to the Maoists.

Shri Rajan said that there is a convergence between the far left and the far right in that both are nationalistic, pro-change and unfavorable to parliamentary democracy.  The loyalists pressed King Birendra to consolidate powers within the palace elite. 

To another question relating to Prachanda’s interview to the Hindu, Shri Rajan replied that the Maoists had a clear vision of socio-economic progress.  They want science education to be improved and Nepal modernised.  They had also brought benefits to the poor and thereby reaped the reward of gaining more credibility.

Maj. Gen. Mehta added that the Nepal Congress and the UML were overconfident about the elections.  The Maoists controlled some 80 percent of the country and ran a parallel government there. Local commissars under their control got the PLA cadres to do social work in the villages, thereby securing votes for the Maoist party. 

Shri Gururaj Rao said, in regard to Prachanda’s keenness to develop Nepal ’s science and technology, that cooperation between the two countries can indeed be intensified. There is already a memorandum of understanding to develop cooperation in agriculture, meteorological research, etc., and to set up science learning centers for training students.  He knew from his tours that Nepal ’s colleges could boast of some brilliant students.  Nepal just lacked the facilities.  Herbal extraction and classification could be a promising line. This kind of research work could be commercialised for Nepal ’s benefit.

Shri Rajan took a question on China ’s competition with India in extending its influence in Nepal , and another on the Nepalese elite in Kathmandu being anti-Indian.  He said that India should not be seen as being aligned with the US on Nepal ’s political evolution.  As regards China , he said that India and China could have a serious dialogue on policy, so that neither need encroach on the other’s interests.  China may not go along with Nepal playing the ‘Chinese card’.  India could expand its investments in Nepal and also liberalise imports from Nepal .  The Indo-Sri Lanka free trade agreement offers a precedent for it. The Nepalese complain of non-tariff barriers by India .  They resent transport of containers with merchandise being stuck at the border posts with some perishables rotting away.  He considered that India has the advantage over China in developing cooperation with Nepal which involved the people.

Shri G. Rao recalled that Nepal played the China card repeatedly during the reign of King Mahendra.  There was active promotion of anti-India materials by certain groups.  But outside Kathmandu the people had and still have tremendous goodwill for India , which is close to their hearts.  He added that Pakistan ’s ISI, disliking the popularity of India , indulged in subversive activities like circulating fake Indian currency.  Under the Maoist regime, relations with India could improve if conditions are favourable to bilateral cordiality. 

Shri B. Raman said that China acts with a long-term strategic thinking.  It fears disruption in Tibet through uprisings encouraged from outside.  It is waiting for the passing of the Dalai Lama to foist its nominee as the successor. 

A member intervened to say that Nepal as a mainly Hindu country was unlikely to accept the Chinese way and would lean more towards India . 

Shri Eric Gonsalves suggested that India could help Nepal to run medical colleges like the one in Pokhran. 

Shri A.M. Khaleeli forecast problems for the Maoists in governing the country. He added that India should not interfere or take part in American activities in Nepal .  Another issue he raised was regarding dams on rivers in Nepal flowing into India for generating electric power and for flood control, which would benefit both Nepal and India . 

Shri Rajan answered a question whether the Nepalese favoured the movement demanding Gorkhaland in the north of West Bengal state.  He said there was some sneaking sympathy for the India-based Gurkhas among the Nepalese, but that the Maoists have not indicated their support for the demand. 

Maj. Gen. Mehta added that Subhash Gheising was a respected figure and that a movement for ‘Greater Nepal’ could pose a danger for us, with the large Nepalese diaspora in India being drawn in. 

On Gurkha recruits, Shri Rajan explained that they had openings in the Nepal police, the Nepal Army and in the Indian army.  Maj. Gen. Mehta, appreciating a point made by a lady member that the Indian soldiers should be given due facilities and equipment to take on possible encroachment by the Chinese, said that India should not get deluded by Chinese or Nepalese talk of goodwill.  Whoever rules Nepal is aware that it is sandwiched between two great powers.  Nepal does not want to be crushed between them.  It will rope in Pakistan and China to keep India in check.  Nepal is ‘India-locked’ and over-dependent on India .  This factor needs to be borne in mind.  China will surely compete with India to advance its interests in Nepal .  There are 19 China Study Centres in Nepal



Asia Centre’s previous seminar on Nepal was held on April 8, 2006 .  In the two years since then, Nepal has taken a hopeful turn, exceeding the expectations of many observers.  Soon after Asia Centre’s recent seminar of August 9, 2008, the tortuous Nepalese peace process has at last yielded encouraging results: the Constituent Assembly is set to take up its task of drafting a new constitution based on Nepal’s current political realities; a coalition government has been formed, with the CPN (M) in the lead and Prachanda sworn in as the new Prime Minister (August 18. 2008).  It is a magnificent transformation brought about by the people of Nepal , who began to shape their political future with the Jan Andolan in 1990 and a second Jan Andolan in 2006.  They have created a republic liberated from monarchical autocracy with its arbitrary whims and palace intrigues. 

The prospects of the republic are still unclear: the hopeful trend could continue, if the political parties act responsibly to ensure a stable nation intent on building up the prosperity of its people.  In this they can count on the ready assistance of friendly foreign partners, with India leading.  On the contrary, if there is a reversion to the old habits of inter-party and intra-party conflict and politicking, it could undo and nullify Nepal ’s democratic achievement. 

Nepal is too close and intimate a neighbour for India to neglect or ignore.  Instability in Nepal will inevitably undermine the stability of the adjacent Indian states.  Nepal ’s security is bound up with India ’s in a strategic sense as well.  As a small country lying between China and India , Nepal is for us the barometer of Chinese pressure. 

All the four seminar speakers took the China factor as the major premise of their presentations.  India has come through a perilous period of political turbulence and the Maoist struggle for power in Nepal .  It could have deflected our own trajectory of growth.  India ’s sterling contribution was to coax the seven Nepalese political parties to reach a consensual agreement with the Maoist party, so that the latter could emerge above ground as a respectable political force backed by the voters.  No doubt this outcome has its dangers for us in the sense that the Maoist party in power next door can be a stimulus to and a model for India ’s Naxalite groups.  But the big difference is that the Nepal Maoists joined the political mainstream and contested the elections with success, while our own militant malcontents prefer to carry on their armed struggle against civil society hoping for a revolution to ripen and sweep them to power.

 For India the China factor looms large, since the Chinese Communist Party is now well placed to intensify its relations with the CPN (M) and CPN (UML), even as state-to-state relations between China and Nepal advance in all fields and Chinese soft power penetrates Nepalese society and youth.  The Chinese will not disclose any hint of predatory intent regarding Nepal , but they do harbour designs to prevent the Nepalese from gravitating into the Indian orbit via the open Nepal-India border of 1700 km., attracted by India ’s broader economy and liberal polity. They will establish their outposts of  fellow-feeling in Terai as well as upper Nepal .  They will use the lure of attractive consumer goods to reach northern parts of India as well. 

The Chinese also have to keep vigil on the Tibetans living in Nepal , lest the disgruntled refugees, with or without Western collusion, foment insurgency in Tibet when the Dalai Lama passes away.  China rebooted its Nepal policy to adjust to the emerging political realities after 2006; but so did India , quietly dumping its policy of relying on “the twin pillars”, one of which (the monarchy) had begun to crumble.

Nepal ’s discontent with the Indo-Nepal Treaty of 1950 has a salience in this context.  China has offered Nepal arms before and will offer them again, even for free.  The provision of the treaty which bans such military transactions with other powers will be disputed; if India sticks to its retention rigidly, the condition will simply be ignored.  India ’s nuanced and sophisticated policy on Nepal since 2006 has anticipated this contingency.  India has promised to work with Nepal on amending or revising the treaty.  Prachanda has come to India in mid-September 2008 with a draft treaty.  We have some key strengths.  The process is likely to be long and complex, but our negotiators can keep a steady hold on the vital interests of India in Nepal without provoking hostile sentiments in Kathmandu .  India has to adjust to the aspirations of the Maoist-nationalist combination in power in Nepal .  We have to draw our red lines with realism and a pragmatic sense of what can be achieved in current times.  The open border is a related issue where again India has advantages not to be overlooked by Nepalese nationalism. 

The ethnic diversity of Nepal is now more prominently represented in the Constituent Assembly. This is cause for celebration.  But this variegated representation comes with sharper ethnic divisiveness between the hill people (paharis) and the Terai dwellers.  It accentuates other divisions, especially because the Madhesis are seen by the paharis and the Kathmandu elite as Indo-philes and surrogate Indians.  This situation calls for extreme tact and delicacy on the part of all Indians, particularly Indians in the adjoining Indian states of UP and Bihar , to avoid suspicion that we are making common cause with one ethnic group at the expense of other Nepalese.  The very circumstance of socio-political affinity across the border works against India ’s overall interests in developing all-round harmonious relations with Nepal .  One development which removes a friction point is that the term “Hindu” in Nepal ’s official name has been omitted.

Indian security has been affected by Pakistan ’s clandestine efforts in past years to stir up Terai Muslims as proxy agents to subvert peace and security on the Indian side and to sow communal division.  A further complication is the ease with which smugglers can exploit the open border for criminal activities.  Apart from improving our liaison with Nepal ’s agencies to thwart such hostile moves involving the ISI of Pakistan, we should strengthen our own border controls and political overview by stationing trained officials from the Union government to liaise, advise and act in concert with the state government officials in the state capitals and in border check posts.  If the central purview and monitoring of India ’s sensitive northern border (not only the Nepal border) is loose or lax, and the existing federal arrangement inadequate to tighten it, the necessary changes should be made to correct the deficiency.   

The US role in Nepal in the period 1990-2008 was wrong-headed.  We have to be careful to keep our distance and our counsel before joining with a major power in demarches of doubtful legitimacy in Nepal , although there may be a tactical convergence of interest in particular cases.  

Cooperation between the armed services and the border security forces on both sides has to be given very high priority.  Here again, there are gaps in our own coordination and capacity for internal consensus building.  We cannot afford our army and the civil governmental departments concerned speaking in different voices. 

India is keen to make a joint success of Prachanda’s first visit to India as Prime Minister of Nepal. Both sides have expectations and the willingness to refashion relations in the new context for peace, stability and prosperity.  India is enlightened enough to be more giving, more accommodating to the small neighbour in its landlocked setting.  Economic cooperation is the tested route to improving relations with the neighbour countries.  The scope is immense, even with all the projects already finished or in the works.  The twin problems of flood control (the Kosi’s depradations in Bihar too recent to be forgotten) and hydel power generation may have to wait until a firmer framework of two-way trust and mutual understanding is evolved, but should be pressed. 

An intellectual investment by India concerns our capacity for obtaining and collating information for decision making for forming  policies towards neighbour countries like Nepal .  While China and Pakistan are better covered by our researchers, the smaller neighbours are given scant attention and hardly figure in the media, although they impinge significantly on our foreign policy and security both episodically and continually. India needs to develop a large pool of Nepal specialists who can be called upon to inform and advise the Union and State governments from time to time.  The specialisation could be farmed out to many educational institutions, private companies and public sector companies with business interest or investment in Nepal , apart from established government sponsored agencies.  Official support could supplement the private efforts of groups interested in carrying out seminars and studies of this kind.  India has a long way to go in catching up with the major powers on area studies.

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