While China's disbursement of ODA stood at $37.95 million, India accounted for a little over $22 million.

NEW DELHI: If it is Nepal's growing proximity with China that is making PM K P Sharma Oli act in a cavalier fashion, some of the resultant damage for India could be self-inflicted. While India denies that it was responsible for the blockade which threatened to cripple Nepal's economy, the fact is that the recent strain in India-Nepal relations has coincided with China surpassing India in the list of top aid donors to Nepal.

The latest report by the Nepal government on official development assistance (ODA) shows that in FY 2014-2015, India's ODA disbursement to Nepal plummeted by over 50 per cent in the first year of the NDA government, allowing Beijing to overtake India in the list of top assistance providers.

While China's disbursement of ODA stood at $ 37.95 million, India accounted for a little over $ 22 million. This is the first time in the past 5 years that India is not in the list of top 5 ODA providers (in terms of disbursement) among Nepal's bilateral development partners. China is now in 4th position, after UK, US and Japan, and followed by Switzerland.

Nepal’s latest Development Cooperation Report acknowledges that India and China have also provided technical assistance to Nepal through scholarships, training and study tours conducted in their countries and which is not fully reflected in the total volume of assistance.

``Though, both of these countries are very important aid providers to Nepal, the assistance received from them has not been well reported as in the previous years,'' it says. India has also committed $ 1400 million for Nepal’s earthquake reconstruction work as against China’s $ 766 million.

The problem for India though, not unlike what it faced in Sri Lanka when Mahinda Rajapaksa was president, is China's increasing involvement in landmark infrastructure projects in the Himalayan nation, including the construction of Nepal's second international airport in Pokhara, which is helping it win the battle of perception.

Oli stunned New Delhi last week by blocking President Bidhya Devi Bhandari's visit to India because of, as has been widely reported from Kathmandu, India’s ``intervention in the internal affairs of Nepal’’. As PM, Oli pulled himself back from the precipice last week with a last minute agreement with UCPN (Maoist) Chairman P K Dahal Prachanda who, in the end, decided not to wreck the Left alliance. The 2 leaders’ mutual suspicion of India seems to be one of the reasons for the deal, which could soon see Oli vacating PM’s chair for Prachanda.

Oli was always uncomfortable with India’s resistance to Nepal’s new and divisive Constitution which has turned the Madhesis restive. He now seems convinced India was trying to engineer an alliance between Prachanda and Nepali Congress, the main Opposition party, to topple his government.

Oli has clearly sought to get his own back on India by feeding New Delhi's insecurity about China's growing engagement with Nepal, most notably with his visit to China in March which saw him signing 10 agreements with Beijing. As the Chinese foreign ministry said after his visit, Oli proposed extension of the planned Chinese rail link to Gyirong near the Tibet-Nepal border further into Nepal, an attempt to neutralise in the future India's advantage of geography in the region. To further reduce its dependence on India, Nepal also signed a trade transit treaty with China during Oli’s visit, which will allow Nepal to access Chinese ports, and is also discussing the possibility of an FTA with China.

