Nepal’s oil diplomacy could hurt India

Nepal Stream

Its oil supply deal with China may help the latter secure a strategic foothold in the region.

Breaking its four-decade-long record of dependency on India for fossil fuel, Nepal entered into an oil trade agreement with China on October 28. A memorandum of understanding was signed between the Nepal Oil Corporation (NOC) and China National United Oil Corporation (PetroChina) in Beijing. While confirming the deal China reportedly indicated that it “could well become a long-term fuel supplier to Nepal”.

The agreement was signed while Nepal was passing through a serious oil crisis due to the blockade by people living in the Terai region (read Madhesis) since September 22. However, a large number of Nepalese people perceive the internal blockade as an “unofficial embargo by India”. Media reports indicate that the agreement with China provided a framework for future cooperation between the two countries on oil trade.

Break in tradition?

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