As a new Indian ambassador takes charge in Kathmandu, his immediate challenge will be navigating the complex government formation process underway in Nepal

A day after he presented his credentials, the new Indian ambassador to Nepal, Jayant Prasad, faces his first major challenge of formulating and implementing a unified Indian position with regard to the government formation process underway in Nepal. The decision will bring to the fore all of New Delhi’s dilemmas regarding domestic Nepali politics.

Efforts at forging a consensus government have failed. The Nepali Congress asked the Unified Communist Party of Nepal (Maoists) to give in their weapons immediately and make ‘irreversible progress’ on the peace process, primarily the integration and rehabilitation of combatants, first before they could be supported to lead a government. The Maoists asked for government leadership first, and promised to move on the peace process subsequently. There will now be elections through a majority vote in parliament. The Maoists have now projected vice chairman Dr. Baburam Bhattarai as their candidate, while the Nepali Congress has put forward its parliamentary party leader Ram Chandra Poudel to be PM.

For the Maoists to win, they need the support of the United Democratic Madhesi Front (UDMF), which consists of five Madhesi parties, or the Communist Party of Nepal (Unified Marxist Leninist). For Mr. Poudel to win, he will need the support of both the UDMF and the UML. Neither UML nor the Madhesi parties have made their positions clear yet, but the overwhelming mood among Madhesi MPs is to support the Maoists. Madhesi parties feel that the radical left is a natural ally in terms of issues of ‘state restructuring and federalism’, and calculate they can extract a better power sharing deal by supporting the Maoists. Senior leaders of the UML, such as former PM Madhav Kumar Nepal, K.P. Oli, and general secretary Ishwor Pokharel, are understood to be veering towards NC though the younger MPs in the party want to give time-bound support to the Maoists making it conditional on progress in the peace process.

India’s role

It is unlikely India will remain a quiet spectator. Both Maoists and NC have begun quietly lobbying with Delhi to use its influence with Madhesi parties. NC leaders have told India that the CA will get dissolved without a new statute, and in that scenario, it is in Delhi’s interest to have an NC PM leading the government. If the Maoists are allowed to return to power, ‘democracy would be in danger’. For their part, the Maoists have argued that progress in the peace and constitutional process is possible only under their leadership. ‘Isolating and encircling’ them, as was tried when Madhav Kumar Nepal led an anti Maoist coalition between 2009 and 10, was doomed to fail, both Maoist chairman Pushpa Kamal Dahal ‘Prachanda’ and Dr. Bhattarai have assured Delhi that they will implement past commitments if voted to power.

Mr. Prasad will not only have to navigate this complex terrain within the Nepali political spectrum, but also manage the policy battle underway within the Indian establishment. Some appear to be in favour of encouraging Madhesi parties to side with Dr. Bhattarai in order to give the Maoists a ‘last chance’ since keeping them out would paralyse the process. This school argues that there will be enough leverage to pull back support from such a government if the Maoists do not deliver; there will also be a strong opposition outside to keep pressure on the Maoists. Other policy-makers however insist that Maoists cannot be ‘trusted’; they will continue to retain ‘weapons and combatants’ and thus a ‘democratic alliance’ must be engineered to bring together the NC, UML and Madhesi parties.

The more fundamental question for policymakers in India is whether they are committed to the 2005-06 political settlement that they helped facilitate between the Maoists and the parties.

If India still wants to see the framework succeed, it should not try to block the Maoists from forming a government by influencing the Madhesi parties against them. The Maoists have said they would move forward on the regrouping of combatants immediately and hand over the weapons as soon as their government is formed. They can be held accountable for these commitments, and the threat of allies withdrawing support would generate additional pressure on them. The choice of Dr. Bhattarai should be reassuring since he has consistently pushed the ‘peace and constitution’ line within the party. And to think that if they get government leadership, the Maoists can ‘capture the state’ or impose a ‘communist dictatorship’ is a grave misreading of the political reality. There are innumerable checks within the plural Nepali political landscape to prevent such a scenario, and the former rebels themselves are increasingly enmeshed in the existing political-business ‘mainstream’.

Delhi had adopted a strong policy line of keeping the Maoists out of power after their failed attempt to dismiss the army chief in May 2009. The limits of that approach are clear and none of India’s stated aims — of conclusion of the peace and constitutional process, consolidation of democratic institutions — has actually materialised. If Delhi chooses to adopt the same approach again, the Maoists will have no incentive in cooperating. There is a high probability that the Constituent Assembly will be dissolved — if not now, then in three months — without a constitution being written and process will collapse. This will potentially destroy the gains of the past few years, create a constitutional vacuum, make it almost impossible to pressure the Maoists to let go of their military, and generate popular resentment against India, both in the hills and the Tarai.

Nepal’s problem internal

The fundamental problem in Nepal is internal. The dishonesty and overwhelming ambition of the Maoists collides with the fear and insecurity of the status quoist older parties. The internal rifts within each party make inter-party compromises even more difficult. But as Nepal chooses a government which will have an impact on the peace and constitutional process, India could be helpful by letting the political process take its own course rather than allow its suspicion of the Maoists be the only principle of its Nepal policy. In his first few days in office, Jayant Prasad will have to help his government make decisions that lie at the heart of India’s Nepal dilemmas.