KP Sharma Oli
Charu Sudan Kasturi, TT, New Delhi, July 24: New Delhi, July 24: Nepal’s communist Prime Minister, K.P. Sharma Oli, resigned this evening after a flood of withdrawals from his ruling coalition reduced his government to a minority, giving Kathmandu and New Delhi a fresh window to reset ties after months of tension and public bickering.
Maoist leader Pushpa Kamal Dahal, better known as “Prachanda”, is expected to take over as Prime Minister. He has at times had a taut relationship with India but has on other occasions, and more recently, shown a willingness to engage with New Delhi.
Prachanda’s government is expected to espouse the traditional Maoist plank of federalism, and will depend on support from Madhesi parties. These two factors enhance the chances of the new administration addressing concerns that lie at the heart of Nepal’s recent disputes with India, senior officials here said. 
Madhesi activists from Nepal’s plains had blockaded the land-locked country’s border with India last winter in protest against a new constitution they called discriminatory. That had triggered charges from Oli’s government that New Delhi was trying to coerce Kathmandu into tweaking its laws.
India had prodded the Oli government to amend the constitution but, following a fierce public relations campaign internationally by Nepal that was critical of New Delhi, helped forge a temporary compromise between Kathmandu and the Madhesis.
But though the Oli government did bring amendments to address two Madhesi concerns, a third demand – to redraw provincial boundaries – remains.
In the past four months, Oli has repeatedly accused New Delhi of trying to plot his removal. He has also moved closer to China, inking an unprecedented pact with Beijing that ends India’s monopoly over Nepal’s trade.
Oli, who quit before a no-confidence vote he was sure to lose, will remain caretaker Prime Minister till Nepal’s parliament officially picks a new leader, which may take up to five days.
“The change of government in Nepal gives both India and Nepal a chance to review their relationship, given the tensions we’ve seen in recent months,” Sangeeta Thapliyal, professor in inner-Asian studies at Jawaharlal Nehru University, told The Telegraph.
India’s foreign office did not comment on the change in government. Officials said New Delhi did not want to create the impression of picking sides in Nepal’s internal politics – a charge some of Nepal’s leaders have frequently levelled.
Oli, who tendered his resignation to President Bidya Bhandari just before he addressed the country’s parliament, remained combative. He argued that he had yanked India-Nepal ties out of their worst trough in decades but also obliquely accused New Delhi of interference.
“The relations between Nepal and China and the relations between Nepal and India are unique, which cannot be compared with one another,” Oli told the parliament.
He said the trade and transit pacts with China had reduced the country’s dependence on India. “However, we cannot accept interference in our internal affairs,” he added.
Nepal, Oli said, should stay equidistant from India and China. “We respect the sensitivity of both our neighbours and we also expect the same from them,” he said.
Experts said that India would be wise to keep any involvement, even at a consultative level, with Nepal’s political class out of public view. This, they argued, would allow Kathmandu’s new administration to build credibility without facing charges of external influence.
But once a new government is formed in Kathmandu, most likely under Prachanda, India plans to invite the new Prime Minister to visit in August, officials said.
Traditionally, Nepal’s Prime Ministers have made their first foreign trip to India to signal New Delhi’s primacy in Kathmandu’s foreign policy.
Prachanda, a former Prime Minister, had sent a key Maoist aide to New Delhi earlier this month to lobby support and signal his willingness to rebuild the frayed bilateral relations if he became Prime Minister.
The serial political upheavals in Nepal — Oli lasted just nine months after a Nepali Congress-led government bowed out in September — is rooted in a reality that represents a double-edged sword for India.
The fractured nature of Nepal’s parliament means that any government needs a coalition between two of the three bitter rivals that have dominated politics in the country: the Nepali Congress, Prachanda’s Maoists, and Oli’s Communist Party of Nepal (United Marxist Leninist).
With 196 MPs, the Nepali Congress is the largest party in the 601-member Parliament. It’s followed by Oli’s 175 communist MPs and the Maoists’ 80.
Oli’s government used to have the support of the Maoists and two Madhesi parties. Earlier this month, Prachanda withdrew the Maoists from the government, accusing Oli of betraying the agreement behind their coalition. This morning, the Madhesi parties too withdrew support.
The Nepali Congress and the smaller Madhesi parties are now expected to help prop up a government led by Prachanda. The numbers intrinsically mean that any new government will be unstable, and constantly unsure how long it will last.
For India, political instability in Nepal has traditionally represented a threat. It increases the possibility, in New Delhi’s calculations, of interference by Islamabad and Beijing and enhances the security risks along the long India-Nepal border.
But some experts and officials in the Indian strategic establishment hope that Prachanda’s dependence on the smaller Madhesi parties will nudge him towards speeding a resolution on the demand for redrawing the state boundaries.