New Delhi: A day after Nepal and China finalised nine agreements, the neighbours signed the Belt and Road Initiative framework agreement on December 4, following delays caused by wrangling over the inclusion of the term “grant” in the text.
On December 3, the two countries signed nine agreements over the course of Nepal Prime Minister K. P. Oli’s visit to China – his first foreign trip in his current term. However, the absence of the BRI framework agreement, widely anticipated as a key highlight of the visit, had raised eyebrows. The agreement was finally inked a day later, on Wednesday, separately.
The Kathmandu Post, quoting a senior Nepali official involved in the negotiations, reported that Nepal had proposed using the term “grant financing cooperation modality,” while Chinese negotiators suggested “assistant financing modality.” The agreed-upon compromise was “aid assistance financing”.
With Nepal sharing a large, porous border with India, New Delhi would have closely monitored the developments related to the BRI.
India, along with Bhutan, had rejected participation in the Belt and Road Initiative or BRI from the outset, citing sovereignty concerns over the China-Pakistan Economic Corridor, a BRI project that passes through territory claimed by New Delhi.
Traditionally, Nepal’s prime minister has always selected India for their first foreign visit. While Oli did meet Indian prime minister Narendra Modi on the sidelines of the UN General Assembly in New York, New Delhi has not extended an invitation so far.
Nepal had become part of the BRI, China’s flagship foreign assistance project, since 2017. But there had not been much headway in the department till now. The framework agreement is supposed to give clarity on the structures involving the economic cooperation.
The issue of foreign financing is politically sensitive in Nepal, as the two parties in the ruling coalition,Communist Party of Nepal (Unified Marxist–Leninist) and Nepali Congress had been at loggerheads over the nature of the funds coming into the country from China under the BRI.
After her earlier visit to China, Nepal’s foreign minister Arzu Rana Deuba, a member of the Nepali Congress, reminded the media that her party had secured a commitment before joining the ruling coalition that Kathmandu would not seek additional loans under BRI, in order to stave off any potential debilitating financial burden.
A joint taskforce comprising members of two Nepali political parties formulated a common position on the acceptable language for the draft BRI framework agreement and conveyed it to the Chinese side ahead of prime minister Oli’s visit. However, on the morning of the scheduled signings, China reportedly introduced new language, leading to a situation where the BRI framework agreement was excluded from the set of pacts finalised after formal delegation-level talks in Beijing.
