Nepal’s joint military exercises with China, announced in December, underscore the strategic rivalry in South Asia between Beijing and New Delhi. The drill, known as Pratikar 1 and scheduled for February 10, will be the first such exercise with China. Its stated aim is to deal with “hostage situations involving international terrorist groups.”

The planned exercise is relatively minor compared to India’s long-standing military relations with Nepal and history of joint exercises. India has been the largest supplier of arms to the Nepalese army and under the 1950 Treaty between the two countries has virtual veto power over Nepal’s purchase of military hardware from other countries.

Nevertheless, India fears any loosening of its grip over Nepal. While India’s State Minister for External Affairs V. K. Singh has said that the drill “would not create any rift” in relations between India and Nepal, the Indian media and strategic commentators have expressed concerns.

New Delhi-based strategic analyst Jayadeva Ranade told Voice of America: “Any increased Chinese presence in Nepal brings China right up to [India’s] border, which is very porous.” He added: “We [India] look at Nepal as part of our strategic space, so there is a bit of a contest taking place.”

Similarly, a senior researcher at Jawaharlal Nehru University, Anuradha Rai, wrote in the Eurasia Review on January 4: “China is looking much beyond its trade relations and it is eyeing Nepal as a centre to promote its ambitions in the South Asian region…

“The situation is getting worrisome for India because from mere words in the past, Nepal has now started to develop its economic and political ties with China. In the recent past, China has also showed similar eagerness to provide an alternative to India for Nepal by providing new trade routes and developing its strategic ties. The recent development to have joint military exercises is one such measure.”

Attempting to assuage Indian concerns, Nepal’s ambassador to India, Deep Upadhyay, told the media that the drills would be “small scale.” He added: “There’s really not much in it. Whichever way you look at it, Nepal has a special relationship with India and that’s not going to change because of any such exercise.”

China’s state-owned Global Times dismissed Indian concerns, writing: “Indian officials, media and academic circles should not read too much into the two countries’ security cooperation. It will only enhance the bilateral relations. India should understand and adapt to this trend.”

These developments are taking place amid sharpening geo-political tensions in the region, exacerbated by US efforts to isolate China diplomatically and encircle it militarily. President-elect Donald Trump has already made clear that he will intensify the confrontation with Beijing that began with the Obama administration’s “pivot to Asia.” The US regards India as central to its drive against China.

India, under the current government of Prime Minister Narendra Modi, has been rapidly developing closer military-strategic ties with the US. India is also seeking to expand its own strategic influence throughout South Asia and the broader Asia region, further heightening tensions, particularly with its longstanding rival, Pakistan, which has close relations with China.

India is planning to deploy a 90,000-strong Mountain Strike Force along its disputed northern border with China—a move that can only generate greater friction with Beijing.

Nepal, which borders both China and India, has become a major arena for growing strategic competition between New Delhi and Beijing. China has made a concerted effort to boost ties with Nepal, particularly since the ousting of King Gyanendra and the abolition of Nepalese monarchy in 2008.

Relations between India and Nepal became very strained after New Delhi’s support for protests by ethnic Madhesi parties in Nepal demanding greater autonomy, which became a de facto economic blockade of the land-locked country, including of vital energy supplies. The government led by Prime Minister K. P. Oli turned to China and signed a deal in October 2015 to import Chinese petroleum products.

Beijing took advantage of Nepal’s standoff with India to strengthen ties with offers of financial aid. Oli made a week-long official visit to China in March 2016 where he signed 10 separate deals which increased the number of transit points between the two countries, improved road and rail connectivity and provided for building a new international airport at Pokhara. In doing so, Nepal reduced its dependence on India and facilitated Nepalese exports and imports.

Military relations also developed. In the same month, General Fang Fenghui, a member of China’s Central Military Commission declared that China was “willing to expand bilateral defense and security cooperation, strengthen strategic communication and exchange at all levels between militaries of the two countries.”

Oli was ousted last July in a regime-change operation backed by New Delhi because of his increasing tilt towards Beijing. On coming to power, Maoist leader K.P. Dahal announced that his government would maintain a balance between India and China. He sent a special envoy to both India and China to explain his attitude.

However, Dahal made his first visit to India for the purpose of mending damaged relationships and, in early November, Indian President Pranab Mukherjee visited Nepal—the first by an Indian president in 18 years. After the visit and delays in implementing the deals signed with China by Oli’s government, Chinese President Xi Jinping expressed Beijing’s displeasure by cancelling his planned trip to Nepal in October.

China is working to boost its influence in Nepal, mostly with offers of financial aid. In December, Beijing pledged a grant of one billion yuan ($US146 million) for post-earthquake reconstruction and road construction to the Chinese border.

While trying to balance between India and China, the Nepalese government appears to be tilting towards New Delhi and Washington. Maoist Prime Minister Dahal “heartily congratulated” Trump on his election victory even as Trump indicated his determination to confront China diplomatically, economically through trade war measures, and militarily.