ChinaIndia Competition in Nepal and Bhutan since 2014

Abstract

With their unique geographic position - sharing borders with both major powers, India and China, Nepal and Bhutan are witnessing increasingly intense competition between these neighboring powers. While Nepal and Bhutan have been considered under Indian traditional influence, China has recently embarked on a “charm offensive” towards its two Himalayan neighbors, placing both countries in a position of difficult policy choices. This article analyzes the current state of China-India competition in Nepal and Bhutan since Indian Prime Minister Modi took office in 2014. The findings point to the fact that in each field and in each country, China and India
have different competitive advantages. Overall, this will be a long-term race in which India holds advantages due to socio-cultural similarities as well as its traditional ties with Nepal and Bhutan, while China benefits from being as a new partner with superior economic power.