Nepal oil shock for India..... Nepal seals first oil trade deal with China

Charu Sudan Kasturi, TT, New Delhi. Oct. 28: India's strategic establishment was scrambling this evening to counter Nepal's biggest diplomatic swerve away from New Delhi in years after Kathmandu inked a pact to import fuel from Beijing.

The first such deal in four decades was sealed amid a blockade along Nepal's border with Bihar.

The agreement, signed by Nepal Oil Corp and Petro China in Beijing today, is being viewed as a message to New Delhi from Nepal that it had given up efforts to ease the blockade and was seeking a bear hug with India's strategic rival, officials here said.

China today promised gasoline worth $1.3 billion as a grant, beyond which Nepal can buy fuel under the agreement. Nepal has not bought fuel from China for four decades in a bid to pacify India.

The dramatic snub to India came just a week after Nepal's new Prime Minister, K.P. Sharma Oli, had sent his deputy and foreign minister Kamal Thapa to India to reset ties hit by tensions over a new Nepal Constitution opposed widely in that country's plains.

Officials here have been saying Kathmandu cannot replace India as the primary route of imports. The inhospitable climate along Nepal's border with China will not allow that, they insist. But today's deal has triggered the first signs of self-doubt in that belief.

The tensions and their clear beneficiary - China - have also cast a cloud on the effectiveness of Prime Minister Narendra Modi's unprecedented early outreach to Nepal, a country he visited twice within his first seven months in office.

Landlocked Nepal has for the past six weeks accused India of effectively engineering a blockade along the border - through which Nepal imports almost all its supplies.

India has repeatedly denied the charge, insisting that the blockade was solely a consequence of protests by the Madhesi community that dominates the plains and is convinced the new Constitution denies them fair rights.

Ekantipur: Oct 28, 2015- A visiting Nepali delegation on Wednesday reached a formal agreement with the Chinese authorities to import fuel from China, ending a four-decade supply monopoly of Indian Oil Corporation.  

The visiting delegation signed a Memorandum of Understanding (MoU) with the Chinese government. “Now the door has been opened to import fuel from China. A bilateral agreement has been reached for the same,” Nepali Ambassador to China Mahesh Maskey, who is leading the delegation, told the Post over phone from Beijing.  

The northern neighbour became ready to supply fuel to crisis-ridden Nepal at the request of Nepali government after India curtailed fuel supply to Nepal by as much as 90 percent for the past one month.  

Earlier this week, China had pledged to provide 1000 metric ton (1,300 kilolitres) of fuel to fuel-strapped Nepal in grant, raising hopes among the people bearing the brunt of the crippling crisis. 

An eight-member government delegation led by Maskey had left for Beijing on Monday to open Nepal’s first oil trade negotiations with China in the wake of severe fuel shortages in the country.  

The team had been mandated to negotiate the price, quantity, quality and other technical details of petroleum products to be procured from China.