Nepal Claims Indian Territory In New Currency Notes; Dances On China’s Tunes Much To India’s Chagrin

China’s charm offensive in Nepal might be veering the Himalayan country away from India. In what could set ablaze the already volatile ties between the two countries, Nepal has decided to introduce a new currency note that features the territories claimed by India. 

Nepal’s Prime Minister Pushpakamal Dahal ‘Prachanda’ decided to print the new map of Nepal, which includes the territory of Lipulekh, Limpiyadhura, and Kalapani in the Rs 100 denomination bank notes.

The new map on the currency note comes after the Nepal government termed India’s claims on the territories as “artificial enlargement” and “untenable” by India.

“The meeting of the council of ministers chaired by Prime Minister Pushpakamal Dahal ‘Prachanda’ decided to print the new map of Nepal, which includes the Lipulekh, Limpiyadhura, and Kalapani in the Rs 100 denomination bank notes,” Indian news agency PTI reported quoting government spokesperson Rekha Sharma.

“The cabinet approved to re-design the banknote of Rs 100 and replace the old map printed in the background of the bank note during the cabinet meetings held on April 25 and May 2,” the report quoted Sharma, who is also the Minister for Information and Communication.

Nepal shares a border of over 1,850 km with five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh, and Uttarakhand. In June 2023, Prime Minister Narendra Modi and his Nepalese counterpart Pushpakamal Dahal ‘Prachanda’ vowed to resolve the boundary dispute under the spirit of friendship during the latter’s visit to India. However, there has been little movement on it so far.

Together, the three disputed areas cover about 370 sq km (140 square miles), Nepalese officials say. The strategic Lipulekh pass connects the Indian state of Uttarakhand with the Tibet region of China.

The Kalapani area is strategically significant in South Asian diplomacy as it is at the tri-junction between India, China, and Nepal. Given that Nepal is a “buffer state” between China and India—both countries have power aspirations in the region, the Kalapani dispute can have ramifications on the relations between the three.

In 2020, India inaugurated the 80km road to facilitate pilgrims visiting Kailash-Mansarovar in Tibet in China, which is around 90km from the Lipulekh pass. Lipulekh is a strip of land on the northwestern edge of Nepal, lodged between Nepal, India, and Tibet. It is a far western point near Kalapani, a disputed border area between Nepal and India.

The road has strategic value for India as it will be the first to provide connectivity to the Indian troops deployed on the Line of Actual Control with China in Uttarakhand.

The road originates from Ghatiabgarh and terminates at Lipulekh Pass, the gateway to Kailash-Mansarovar. The road was approved by the Indian Cabinet Committee on Security in 2005 and was made following recommendations of an inter-ministerial China Study Group.

Nepal’s territorial dispute with India over Lipulekh came to the limelight in May 2015 when India and China agreed to develop the region for trade and transit. Kathmandu sent diplomatic notes to New Delhi and Beijing protesting against the agreement, alleging violations of Nepal’s territorial integrity.

In 2019, India released a new political map showing the disputed territories within its international border. The Nepali public erupted in protests, seeking to amend the Nepali Constitution to include these disputed territories.

India-Nepal relations, which had been under strain since 2015 after India imposed an unofficial economic blockade on Nepal, degraded further.

In 2020, Prime Minister Modi underscored how his government built a road via the disputed Lipulekh to Manas Khand, a gateway to Mansarovar, a Hindu pilgrimage site in Tibet.

The speech aimed at the Hindu electorates in Uttarakhand triggered a stir in Nepal. Following protests in Nepal, the Indian Embassy in Kathmandu issued a press release on January 15, claiming the country’s position has been “consistent and unambiguous.”

This was followed by Nepal’s foreign ministry statement on January 17, which reaffirmed its claim over Limpiyadhura, Lipulekh, and Kalapani and called on India to cease unilateral construction or development works in those territories.

The then Indian Army Chief General MM Naravane (retired) hinted that the objections by the Nepalese government over the construction of a strategic link road in Uttarakhand on the border with China could have been done at the “behest of someone else.”

The army chief’s comment was aimed at China, which provoked Kathmandu to raise the issue with India.

In reality, all three contested areas have been firmly under India’s control for the past 60 years or so, and the people living in those areas are now Indian citizens, pay taxes in India, and vote in the Indian elections.

The Chinese Embrace Of Nepal

Nepal and India have shared strong ties since the latter’s independence. A 1950 bilateral treaty made Nepal India’s protectorate and made India responsible for its defense. With time, Nepal has been seeking changes in the treaty and a more equal status with India.

Nepal, a landlocked country, has always been dependent on India for imports. Hence, India’s economic blockade of 2015 has been a rude awakening for the Himalayan country. The country has slowly drifted apart from India, and China has moved in to fill the vacuum with investments, aid, and loans.

China considers Nepal a key partner in its Belt and Road Initiative (BRI) and wants to invest in Nepal’s infrastructure as part of its grand plans to boost global trade.

In 2022, China offered Nepal a Trans-Himalayan Multi-Dimensional Connectivity Network created by blasting tunnels through the mountainous Tibetan plateau under its flagship Belt and Road Initiative.

But the project has been marred by delays over finance. Touted as the ‘Tibet Train,’ a pre-feasibility study of this proposed railway network suggested that it would be “an engineering feat” and costly but not an “impossible task.”

China has already constructed Pokhara International Airport, but it has been held hostage as India continues to deny permission to fly overhead to flights heading to the Chinese-built airport. This means that the airport remains inactive.

India also has squandered away its goodwill bank in the country, as its new recruitment scheme cut out the Nepalese Gurkhas from getting recruited in its Gurkha regiments. It has been nearly three years, and not a single Nepali Gurkha has joined the Indian Army, denting century-old ties.

As India conducts its national elections, the new government will have its work cut out – to forge ties with its neighbors and countries with shared history.

• Ritu Sharma has been a journalist for over a decade, writing on defense, foreign affairs, and nuclear technology.
• The author can be reached at ritu.sharma (at) mail.com
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