Indo-Nepal Relationship: Threatened by China - An Approach Paper

This approach paper was drafted by Maj Gen Madhok and sent to the PMO six years ago. The subject matter holds in good stead to this date.

Indo-Nepal Relationship: Threatened by China - An Approach Paper

Editor's Note: The following missive was sent six years ago to the PM by the author. Leave a-side comments. It was not even acknowledged by PMO. Considering the present situation in India and the deteriorating situation in Nepal & Chinese inference, I find that the contents of this article (earlier letter) are  quite relevant even now and therefore being published.Our intelligence has been poor and if I may say shocking. Adversaries have always surprised us except in 1971. Because we take things for granted.  Whether it was in 1947, 1961, 1965 or in Srilanka or in Operation Blue Star. India cannot afford another 1962.


Nepal, the Buffer between Communist China and democratic India shares a boundary of nearly 500 miles with India.  Approximately 50-60 Lac Nepalese are settled in India.  While 60,000 active Gurkha soldiers serve in Indian Army’s 7 Gorkha regiments at any one time: a historical tradition of between 100 to 150 years.  Besides, lacs of ex servicemen settled in remote areas of Nepal draw pension from the Indian treasury.  

But today, Nepal presents a picture of hopeless and unpredictable future with the country's governance resting with an interim constituent assembly without a constitution and the King having been thrown out.  The Buffer might disappear should the Maoists led by Prachanda and supported by China succeed to convert Nepal into a Communist state.

So bad are the employment opportunities, that the Government issued 400,000 passports in 2009 to let its citizens move outside to earn livelihood.  The interim constituent assembly had been acting as a rubber stamp for the three political parties; United Communist Party of Nepal-Maoists (UCPN-M) led by Prachanda, Communist Party of Nepal-Unified Marxist Leninist (CPN-ML) led by Madhav Kumar Nepal and the Nepali Congress.  

It failed to draw up a constitution by May 28, 2010-the deadline set for it.  The date has now been extended by one year that is by Dec.31, 2014 to draft the constitution.  The political parties have been bickering and fighting. Thus, leading to uncertainty, chaos and anarchy in the country and inability to elect a consensus interim PM. Even, President Rambaran Yadav’s orders have been disobeyed several times.

Concurrently, the Chinese have been working overtime to increase their influence with the ultimate aim of creating Nepal as a proxy state. A large hoarding just outside Kathmandu airport emblazons the words “Welcome to Nepal, the Gateway to China”. It might as well read “Welcome to Nepal, China’s Gateway to India”.  The Chinese Ambassador in Nepal stated recently, that China will not permit any interference in Nepal's internal affairs.  

Further, Nepal’s markets are flooded with Chinese goods.  At Least 10 China Study Centres at Nepalgunj, Lumbini, Butwal, Pokhara, Chitawan, Kathmandu, Banepa, Sunsari, Biratnagar, Morang and at Sankashti was Sabha are functioning and funded by China. These are probably meant for furthering influence, spying and intelligence gathering: Here is an issue, India’s R&AW would do well to investigate.

The questions which arise are: How is it that in spite of so many positive assertions that India has, the Chinese have succeeded in influencing Nepal while New Delhi’s influence has waned. Or that India has missed the bus or there is still some scope to regain its influence in Nepal? What are China’s objectives and what is it doing to achieve these? What are the implications for India should Nepal go totally Communist and its policy decisions are made in Beijing like Myanmar’s?

What is India’s philosophy and policy towards Nepal?  What about the future; India’s options and what New Delhi must do to befriend Nepal so that it does not slip into China’s hands? But  before that, some facts and the prevailing situation?


Former Nepalese PM Prachanda

55-year-old Parchanda, Chairman of UCPN-M led a 19,000 strong Guerilla force.He decided to join the Peace process in 2006.  They follow Mao Ze-dong’s dictum that power flows from the barrel of a gun.  And want a Socialist Republic with one party Communist dictatorship or a National Unity government headed by Maoists.  In Nov. 2009, they decided to announce 13 autonomous states.  

They want a powerful directly elected President like in North Korea or Cuba with judiciary totally subservient to him with Kathmandu as the New Republic Province.  Maoists also have a vision of Greater Nepal which includes parts of UP (Varanasi, Balia, Pilibhit and Jaunpur etc.).

The movement has been termed as the most successful rebellion in South Asia which flourished because of a rickety and weak Monarch. Waging a war from 1996 onwards, the Maoists carried out country wide strikes, attacked police stations, abducted students and even soldiers of Royal Nepal Army (RNA) and in Aug 2005 had brought Kathmandu to a standstill.  They had even formed a parallel government in July 2004 with bases in Sikkim and Darjeeling prior to ending their decade long civil war in 2006 and won 40 seats in the Parliament of the CareTaker Government.

Maoists are totally against India. They see it as a big bully. They have links with various rebel outfits in India. Parchanda even admitted openly for giving support to India’s Naxalites. They have blamed India for the palace massacre which wiped out King Birendra and his entire family on Jan 01, 2001 because he favoured buying arms from China and holding direct talks with Maoists.  

They also blame India for encroachment of Tanakpur Barrage, Kalapani and want to scrap the Indo-Nepal Treaty of Peace and Friendship.  They had targeted India vehicles carrying pilgrims, blocked routes from India, threatened business houses and even issued notice to at least 16 Indian business establishments to close down or face retribution.

In Nov.2006, when the Maoists were ready to join hands with other political parties, they agreed to lay down arms but under UN supervision. Parchanda wanted a National army after merging Maoist cadres with RNA.  He became the PM after elections in 2006-07 of the CareTaker Government but resigned over a dispute involving reinstatement of RNA Chief.  Today, approximately 19,000 Maoist cadres are lodged in 28 cantonments and are drawing salary from government coffers and will not forgive Prachanda and his subordinates if they don’t get what they are getting now.  

Prachanda has been a double speak.  Privately, he tries to reassure India that he is committed to democracy and respects India’s core interests.  Publicly, he blames India for failure of his government, Palace massacre and propping up Madhav Kumar as the Care Taker PM.  He has now developed differences with his vice Presidents who criticized him for forging cliques, corruption and demanding a mass revolt.  

However, at the Maoist Plenum held on Nov.26-27, 2010 all leaders reaffirmed their commitment to People’s revolt as the ultimate means to People’s democracy.Subsequently. Parchanda had also announced that all Nepal colleges will be turned into military barracks if Maoists were not given power.  Such then are the intentions and demands of Maoists.


When China annexed Tibet in 1951, Mao while enunciating his stand on liberation of Tibet had included Nepal, Bhutan, Ladakh, Sikkim and Arunachal Pradesh, “Five fingers'' as the larger strategy in this orbit. So engaging Nepal forcefully is a part of this thrust.  Today, Beijing is the chief aid and trade partner of Nepal and has also been pressing for a defence pact with Kathmandu.  China has been busy constructing road links from Nepal to Tibet.  

Road Lhasa-Shegatse (Bordering Nepal-Bhutan-India) is under construction.  It would reduce Nepal’s dependence on India and enable it to import petroleum products from China. China is also planning to lay roads from eastern and western Nepal. There is talk of bringing the railway line from mainland China-Tibet-to Nepal,which can be reality in the not too distant future.  This idea has caught the imagination of Napalese. And therefore, the rail extension in the rest of the country can be seen as logical in the future.

Besides, the economic relationship is being deepened.  There is a weekly bus service from Kathmandu-Lhasa.  In Apr 2005 Chinese foreign Minister had visited Nepal when the country was in turmoil to commemorate the 50th year of successful diplomatic relationship.

Thereafter 15,000 AK 47 rifles were offered to RNA in Oct.2005 alongwith 4.2 million rounds of 7.62 ammunition and 80,000 hand grenades.  Chinese policemen in civilian clothes have now been seen on the Sino-Nepal border-on the Chinese side of the border. In Dec.2009, a Chinese delegation offered to train the RNA and offered Rs 220 million as aid for purchase of non-lethal weapons.  

It is of interest to note that late King Birendra had negotiated a deal for purchase of weapons from China in the late 80s in total disregard to the 1950 Indo-Nepal treaty according to which Nepal was obliged to secure all defence supplies from India.  Another issue of interest is that road Kodari-Kathmandu constructed in 1967 connects to Chinese military bases ahead of Tibet.These bases being 100 Kms from Kathmandu.

There are nearly 2,500 Tibetan refugees in Nepal and China is concerned about them. That they and other Tibetans settled in India with the Dalai Lama’s headquarters at Dharamsala may not be used in anti China activities.  In fact a Chinese delegation met Nepal’s President and PM in Sep 2010 to get an assurance that Nepalese territory will not be used for Free Tibet activities. Further, although slogans have been seen/heard outside Chinese embassy in Sep 2010 by students that they oppose all foreign intervention in Nepal’s internal affairs, Parchanda has blamed India for interference.

To increase its influence, along with the Treaty of Peace and Friendship, China signed an agreement for economic aid of Rs 100 million over and above Rs 40 million provided in 1956.  It increased its aid of Rs 140 million to Rs 535 million in 1971.  A large number of projects like roads, Sunkosi Hydel project, Seti Power and irrigation power project at Pokhara, mini Hydel projects in eastern and western Nepal have been undertaken.  

In addition, China will undertake at least 5 more road projects connecting Nepal-Tibet and also covering mid western, central western and eastern Nepal.  China now wants to replace their 1960 Sino-Nepal treaty with a fresh one for which a draft was handed over to the Nepalese government in Feb.2009.  Such then, in brief, are the actions being taken by Beijing.


Modi-Trump relations

India and US have been the largest donors of military aid to Nepal.  In 2002, the US gave 20,000 M16 rifles to the RNA.  Because of smuggling from Nepal borders to India and approximately 1900 Madrasas functioning on Indo-Nepal border (1100 located on the Indian side according to the SSB Chief) India deploys 24 SSB (Shastra Seema Bal)battalions on the Indo-Nepal border.  

This strength is likely to be increased by another 20 or so battalions.  Maoists blame SSB for mistreating labour and spying and other activities.  With the surge by Maoist cadres between 2002-04, New Delhi found itself a bystander. If the Communists take over, India will be flooded with refugees.  In Dec 2004, during the visit of RNA Chief to Delhi, plans to support Nepal and to deal with Maoists are supposed to have been discussed.  

In Jan 2005, the King arrived in New Delhi with Maoist threat heading his agenda.  India’s views were to develop multi party democracy, RNA should engage Maoists and the King should call an all party meeting to draw a road map for democracy of which the King will be a constitutional head.

India was, supposedly, not averse to the King holding a dialogue with the Maoists but wanted the RNA to act as  it had been given sufficient military hardware by India and the US.  In Feb 2005 India stopped military aid but agreed to continue and resumed supply of arms, concertina wires, mine proof jeeps, bullet proof vests in May 2005.

1In Sep 2005  Yechury, CPI, MP led a delegation to Nepal.  During his visit the delegation was stoned by anti India groups.  This was followed by India’s Foreign Secretary who met the King in Dec 2005 and then Karan Singh in Apr 2008 as the situation had become serious. In Feb 2006 dozens of Indian businessmen left Nepal due to fear and threats.

While Indian tourists were thrown out of hotels.  Ex Foreign Minister Natwar Singh stated in Apr 2006, that India had no policy on Nepal.  In Oct 2010, the Indian ambassador Rakesh Sood was received with black flags at Phaplu in NE Nepal and shoes thrown at his vehicle by Maoist workers.

In Jan 2010, India signed 4 pacts for road construction, security and a extradition treaty during the visit of its Foreign Minister S M Krishna. To fund road projects, India sanctioned 700 crores for projects in Terai.  In Phase 1, India intends to construct 19 roads (605 Kms) and 1450 Kms of black topped roads later in Terai spending Rs 11 billion.  But isn’t it too late in the day? In Aug2010 Shyam Saran former ambassador to Nepal and ex Foreign Secretary was sent to offer assistance in drafting Nepal’s constitution.  But there have been no results.

In Parchanda’s view, Nepalese PM first goes to India to bring aid and other projects instead of settling issues within Nepal.  He terms it as a conspiracy by foreign powers.  In July 2010 Maoists had openly announced support to Communist revolutionaries particularly in India and suppression of its people.  BJP has had differences of opinion as to whether Nepal should be termed a Hindu or a secular state? It is concerned about ISI activities there.  

But it needs no emphasis that a stable Nepal is in India’s interest and framing and drafting of the new constitution by May 28, 2011 or even later is crucial.  Let it be said that India has been misreading Maoist mind in the past when it was being thought that they would join the peace process in 2006.  But Prachanda played games and it turned out otherwise.


Initially in 2003, the King and his government were not ready to compromise on Monarchy and democracy.  The then PM Deuba went to Delhi to seek help as the Maoist anti government and anti King activities were increasing.  The King who was under threat, declared an emergency in 2003 and abrogated Nepal’s constitution.  India was reluctant to offer any major support unless the King got support from Nepal’s political parties.  

In any case India remained the largest supplier of military aid to RNA.  In Dec 2005, Indo-Nepal treaty of 1999, which lays down 15 designated transit points was reviewed.  In Apr 2006, political parties asked people not to pay taxes to the government.  In this chaos Kathmandu remained without fuel, food and LPG.  It was in these conditions that the King restored the parliament in May 2006 and it met for the first time in 4 years.

A 7 party alliance of political parties of which Maoists were also part, demanded that RNA should owe allegiance to the Nation and not to the King.  That it should be turned into a National Army.  They wanted an interim government till a new constitution was drafted. The King was sidelined.  Decrees issued by him were scrapped. And at least 12 ambassadors including the one in India who had been approved by the King were recalled.

He was denied veto power. A parliamentary committee demanded details of his and other Royalty’s property. New constitution was first to be drafted by May 2009, later, the date extended to 28 May 2010 and then 28 May 2011.  The Maoists did sign a peace accord with the 7 party alliance.Anti King's feelings were so bad and harsh, that when he visited the Pachupati Nath temple, stones greeted him as he had kept the people waiting.  The Government then decided to stop his allowances, royal palaces were nationalized and the King asked to move out to a private residence.


The foremost and pivotal implication for India is that should China succeed in converting Nepal into a Community Proxy state, it will be in a position to exercise the option of supporting Naxalite movements in Bihar, UP and UA and even support the GNLF in Darjeeling through Maoist cadres.

Also, to capture Nepal’s markets and to lead support to the visualized movement for a Greater Nepal.  At its worst for India, a second Proxy war could take shape in the NE with ISI help with headquarters in Kathmandu. The situation as such would be that New Delhi would be deeply involved and kept busy with the initiatives of Beijing in Nepal.  

Further, coupled with China’s influence in Myanmar, its claim on AP, threat and fear of damming the Brahmaputra from China’s side and various secessionist movements in Assam, Nagaland and Manipur India would find it very difficult to tackle the situation especially when these movements are being indirectly supported by Beijing.  Beijing’s next target would of course be Bhutan and Sikkim.  Can this scenario be treated as a figment of imagination?  That is a question your NSA, NSC, NSAB, NIA, RAW, MEA, Services headquarters and think tanks should answer and advise you.


India has no option but to ensure that Parchanda and China do not succeed in converting Nepal into a Communist state.  That New Delhi does not gamble its last chance to obviate above by ensuring that Nepal’s new constitution (to be framed by Dec.31, 2014) is drafted to create a democratic state with an elected President and two houses of Parliament.

The RNA is trained, strengthened, expanded and equipped to fight Maoists.  That it is provided helicopters to create an RNA Aviation and given mobility. That Ex Servicemen and Pensioners of Nepal, who are obliged to India and have a lot of goodwill towards their regiments and also India are persuaded to educate the poor and illiterate population in remote villages and the freedom they have in a democracy.  

That the development work in Nepal is undertaken (of course with Nepal government’s consent). Finally, to revise and sign fresh treaties for Transit, defence cooperation and economic assistance.  Further, that Nepal can lose a lot of ‘Pensions’ or treaties for Gorkha recruitment in the Indian Army if by chance, Nepal converts to a Proxy Communist state.

Conclusion. It can be said without mincing words that Parchanda is sold to Beijing.  That he had succeeded as a mass leader and overthrown Monarchy.  That masses love revolutions and Prachanda has and can provide these.  As to whether India has lost the battle in Nepal or there is still some scope for New Delhi to retrieve the situation? The answer is loud and clear: That we neglected Nepal.That we failed to assist it in its development.  

That we have lost nearly 20-25 years while China made use of it.But India has a chance, provided our Parliamentarians get out of their inertia and short sightedness and view the situation in its totality.  India has no option but to ensure that democratic forces succeed in Nepal.  And with the assets available to New Delhi, provided the proposals listed at Appx are implemented and sufficient guidance and influence are exercised in drafting the new constitution, if necessary, with pressure.


Our neighbor Nepal is a poor country.  That India has a lot of stakes in Nepal needs no elaboration. A fact which  would have been more than clear after our PMs (Narendra Modi)  last visit to Kathmandu. China has made a lot of inroads in Nepal while we are at least 20 years behind in taking note of all inherent implications should Kathmandu become a Proxy state of Beijing. But we have tremendous assets while rewriting our policies with our neighbours.  But we need to take action. And that is the subject of this Missive.



Appoint a minister of state exclusively for Nepal affairs for a period of two years. To coordinate all matters with various ministries and security establishments. Place him under the RM with a direct approach to the PM.

Appoint a council of seven retired Colonels of Gurkha regiments of the Indian Army. To also include: at least 2 ex Ambassadors to Nepal along with two ex military attaches to Nepal, an ex Election commissioner of India, two retired Supreme Court judges (experts in constitution) and a retired Border Road Organisation Chief.

The council to draw a time bound agenda for implementation of political, social and operational level measures.  Overall aim being to retain Nepal as a Buffer, counter Maoist influence, help in drawing up a new constitution and other development measures.


Initiate aggressive contact with democratic forces in Nepal.

Encourage and invite visits by political parties/delegation like Nepali congress to witness political debates in Lok and Rajya Sabhas and functioning of Indian Government.

Invite student delegations to visit engineering or medical and other colleges.  Let them participate in debates concerning democracy and its advantages.

Organise an Indo-Nepal peace and Development corps primarily composed of ex Servicemen of Nepal and those retired from Gurkha regiments and settled in India.  To visit Nepal especially its remote areas and carry out developmental work.  Should include doctors, engineers, architects, artists etc.


Nepal, all side and done, is a Hindu state and so is India with 80% population of Hindus.  Let religious delegations like those from R K Mission visit Nepal particularly at religious functions like Dussehra etc.

Set up mountaineering institutes. Nepal offers tremendous scope for such institutes. Encourage Indian mountaineers to undertake mountaineering trekking expeditions in Nepal.

Film industry should be encouraged to undertake shooting in Nepal.  Nepalese citizens will love to participate in such activities in great numbers.

Set up industrial, irrigation and agriculturist ventures.  But let these not remain on paper only.

Tourist industry must make a dent in Nepal.  Chinese are doing this in a big way. Has our Minister of Tourism visited Nepal?


Increase frequency of joint exercises with RNA and the Indian Army.

Help Nepal to establish helipads and airstrips in the interior and assist them in carrying out exercises from these areas.

Set up anti guerrilla schools in the Terai to train the RNA.

Double the strength of Gurkha battalions. These will provide employment opportunities besides these soldiers to carry the message of democracy.

Establish Border road Task forces for completing road projects inside Nepal with speed according to the time bound plans.

All young officers serving in Gurkha regiments must spend at least one part of their annual leave trekking in Nepal.

Gurkha troops must be made available to the RNA and Nepalese government when needed for anti Maoist operations.

Note: These are just a very few proposals but a lot more can be done to be friend Nepal.


Col. CM Chavan writes: China has been making strong infrastructure development all along the border that it shares with India, for the last twenty years or so which includes roads, bridges and dams. Especially along Tibet, POK and Aksai Chin. The present Govt. in all earnestness has realised that this can’t be allowed to go on, if India is to safeguard its territory.

So; since 2014 India has been improving infrastructure along the North Eastern border and has  started constructing required roads, bridges and tunnels to make Indian Defence Forces movement easier. By 2022 India would be completing 3417 kms of road along the North Eastern borders.

The latest of this being the construction of 255 kms road from Shyok in Darbuk to Daulata Beg Oldi, IAF base, and construction of bridge on Shoyk river named after late Colonel Chewang Rinchen, MVC Bar and SM, which is 400 meters long which will help the locals and will also help in tourism to Siachen Glacier areas.

This is close to Aksai Chin area close to POK from where the CPEC would be crossing from the area, ceded illegally by Pakistan to China. These developments are a concern to China and had not expected India to do so aggressively.

All the above developments are not liked by China as it would make it difficult for it to ingress into Indian territory easily. Hence China as a show of strength intruded into Indian Territory along the Ladakh region at Galwan, near Daulat Beg Oldie, between Fingers 4 & 8 (India used to patrol up to finger 8) which are ridges of mountain along Pangong Tso Lake, Damchuk, Nakula at Sikkim and has been encouraging Nepal to show Lipulekh area in their territory to test the Indian resolve.

The reasons for show of strength by China, is also due to recent uproar from the countries of the World blaming China for spread of Covid-19 (India being one of them) which has affected the World economy resulting in millions of losses of jobs and has taken the countries back by seven to eight years (quite contrary to China).

There is chorus building up to ban Chinese goods and China’s economy entirely depends upon its exports. India issued stricter guidelines especially for Chinese investment in India as per FDI guidelines, especially after it acquired 1% share in HDFC. Then India did not sign the Regional Comprehensive Economic Partnership treaty, which too has enraged China.

China is also worried of South Asian countries’ dislike of Chinese explorations in their territorial waters in South China Sea and India’s partnering with QUAD to check PLAN (People’s Liberation Army Navy) both in Indo Pacific and South China Sea. Unease in Taiwan and Tibet over becoming independent is also gaining momentum and China feels that India is to blame along with the USA.

Hong Kong is becoming Achilles’ heel day by day for China and has realised that it’s losing face and before it becomes ineffective in times to come, wants to make India agree that it will not lay claim to Aksai Chin. India on the other hand has diplomatically improved relations and gained sympathies from the countries all over the World by demonstrating that India has no territorial ambitions whatsoever and that it wants to improve trade relations. India hopes to become a regional economic power in times to come by treating other countries as its equal.

India’s claim that it can face two fronts, China wants to pressurise India especially now, that India is economically suffering due to Covid, and wants it to come to negotiating table and accept Chinese claims to recent intrusions as the LAC has not been clearly demarcated and India specially has not specifically laid claims to areas along the LAC.

China seems to have miscalculated that India under the present Govt. will bow down which has built up World opinion to its advantage and will bounce back in a few years by fighting Covid battle effectively. Economically India has a great advantage to compete against China as many Companies there are wanting to shift base to India. UK, EU, South Asian countries have shown interest in doing business with India. The infrastructure building along the Northern border in terms of roads, tunnels and bridges will also definitely stand in good stead for the Indian Forces if so required in future.

(Maj Gen VK Madhok is a product of the 1st Course JSW/NDA and was commissioned into the 3 GR. He was the BGS HQ Southern Command and the COS at HQ 4 Corps. He retired as the ADG (TA). He lives in Pune. The author can be reached on Email:[email protected])

(Views expressed are the authors own, and do not reflect the editorial policy of 'Mission Victory India')

Indian ASAT – Part of a Global Arms Race Triggered by US Actions?
Previous article

Indian ASAT – Part of a Global Arms Race Triggered by US Actions?

"Realizing the never-ending technological ripostes it would trigger in countries developing advanced delivery systems (missiles) to foil the BMD in an escalatory arms race, the Anti-Ballistic Missile Treaty (ABMT) was signed by the US."

India Must Not Fall into Chinese Trap
Next article

India Must Not Fall into Chinese Trap

"In my assessment, the present PLA intrusions are obviously with the approval of C-in-C and President Xi Jinping, China's supreme leader. China would like to retain some of these."


🎉 You've successfully subscribed to Mission Victory India!