India has strategic interests and it engages with all three key parties and their current leaders – Pushpa Kamal Dahal alias Prachanda, who is the current PM (Maoists), KP Sharma Oli (CPN-UML) and Sher Bahadur Deuba (Nepali Congress). Oli, an old India confidant, however, gave India a tough time as PM, while the entry of Deuba as PM gave India a degree of comfort. Deuba ushered in a period of key development projects.
Poudel was backed by Prachanda’s Maoists which had 32 seats in Parliament, and Nepali Congress, the single largest party with 89 seats. He had the backing of eight parties, including the Communist Party of Nepal (Unified Socialists), whose leader Madhav Kumar Nepal is also a prime ministerial hopeful. There is an emerging triangular power-sharing agreement between Madhav Kumar Nepal, Prachanda and Deuba. In December 2022, in a sudden turn of events after the election, Oli backed Prachanda to emerge as the PM for the third time.
Prachanda was sworn in as the PM for the third time on December 26 after he walked out of the pre-poll alliance led by the Nepali Congress and joined hands with opposition leader Oli. Prachanda’s party, which contested the November 20 parliamentary and provincial elections as a partner of the five-party alliance led by the Nepali Congress, left the alliance after it refused to give Prachanda any of the two key posts – the president and the prime minister. Prachanda then forged an alliance with Oli to form the government. But the two fell out after Prachanda decided to back Poudel as the presidential candidate. Oli reportedly became suspicious of Prachanda after Deuba decided to back Prachanda in the confidence vote.
The Oli factor is hard to ignore in Nepal’s politics. Oli has in the past maintained close ties with India and has been a dependable friend. However, after the 2015 blockade, as Nepal sought to open up connectivity routes via China, Oli developed closer ties with China as the Chinese envoy in Kathmandu became an important player who was often seen mediating between Oli and Prachanda. Nepal’s previous President, Bidya Devi Bhandari, was often considered close to Oli, Bhandari twice dissolved parliament on “recommendation” of Oli, forced the Supreme Court to twice reinstate the house and refused to ratify the Citizenship Bill that was twice endorsed by both houses of parliament, a move backed by Oli.
As India tries to rework its relationship with key players in Nepal’s politics, Prachanda has sought to allay its fears on taking any step that will be detrimental to India’s interests. Deuba remains conscious of India’s interests and is keen to develop cross-border economic projects. Yet Oli’s next moves must be watched carefully as the current setback may compel the veteran leader to initiate a move that may be detrimental to India’s interests in Nepal. India needs to walk the extra mile to pre-empt any fresh round of anti-India sentiments brewing in the Himalayan state that China will only be too eager to exploit. Nepal watchers are confident, though, that China is yet to grasp local politics and any future understanding between Oli and Prachanda will be short-lived given their animosity towards each other.