At a time when Nepal’s major political parties are yet to agree on the formation of a new government, a hint that the political crisis is more likely to intensify, India and China, the two immediate neighbors, have stepped up their diplomatic activities. High ranking officials from the two countries are in Kathmandu where installing the government to provide the much needed stability is still uncertain.

Just a week after the elections results, former Chinese ambassador to Nepal Quo Guohang, who presently heads China’s external security affairs at the Ministry of Foreign Affairs, visited Nepal with a large delegation.

Similarly, Indian Army’s Lt. General Rajan Baksi paid an official visit to Nepal last week. According to Nepal Army headquarters, Lt. General Baksi called on chief of Nepal Army General Gaurav Sumsher JBR. Although Nepalese officials termed both visits as formal and official, these visits have their own significance given Nepal’s current political course.

An unverified report published in Annapurna Post daily even revealed that Alok Joshi, chief of Research & Analysis Wing (RAW), India’s Intelligence Agency, visited Nepal meeting various leaders of political parties. Annapurna Post also said that another RAW man Peter Hanaman in his brief stay in Kathmandu had already met with Nepali leaders of various shades and colors.

The sensitivity of Nepal’s neighbors is understandable as various groups could launch anti-India and anti-China activities taking the benefit of Nepal’s prolonged political instability.  For instance, in August, Indian security officials tracked down one of their most-wanted militants in Pokhara where he had told neighbors he was a traditional healer. The same month, Indian agents picked up a man they suspected was a top bomb-maker for the Pakistan-based Lashkar-e-Taiba militant group in Nepal’s southern plains.

Similarly, the Chinese too worry about Nepal’s situation. The Chinese are busy trying to choke off an exodus of disaffected Tibetans into Nepal. The Chinese have even offered all necessary equipment to Nepalese border guards.

India’s main interests in Nepal are to curb Chinese influence and to deny a base to militants, intent on infiltrating into India across an open border. China’s focus has broadened from Tibetan issues to establishing a stronger foothold in countries around India.

Landlocked Nepal traditionally depends on India for food and fuel and hundreds of people criss-cross the border every day for work. According to a report published by Reuters, China is now wading in too. It nearly doubled its aid to $52mn last year. It is also cultivating politicians and business people, just as India has done for years.

“The geostrategic rivalry between India and China in Nepal has heated up and the world is watching,” said Vanda Felbab-Brown, a Nepal specialist at the Brookings Institution.

“India has been deeply involved in Nepal for decades. China’s arrival is more recent, but they have quickly covered a lot of ground. If the Indians are building a hydro-electric dam, the Chinese will offer to build another in another part of the country.”

Zhao Gancheng, director of South Asia Studies at the Shanghai Institute for International Studies, said China’s influence had been overstated and, unlike India, it played no role in Nepal’s internal affairs. “China has no way of competing with India’s influence in Nepal. If you look at it in terms of percentage points, India’s influence in Nepal would exceed 80%.”

But he said Nepal was important for China because of the long border with its Tibetan regions as well as the number of Tibetans living in Nepal. “Of course this is an issue which involves China. On this question, China and Nepal have close co-operation.”

India’s security agencies have notched up a series of quiet successes in Nepal, reducing the threat from militant groups using it as a haven, not least the capture of the founder of the Indian Mujahedeen group, Yasin Bhatkal.

According to Indian news agency DNA, increasing Chinese activity on India’s eastern borders and their dabbling in Nepal affairs have prompted security establishment in India to look into revisiting the role of Sashastra Seema Bal (SSB) in its previous avatar of intelligence gathering as Special Services Bureau. 

The Special Services Bureau was set up a year after India’s war with China in 1962 to gather crucial human intelligence on Chinese maneuvers in the region by using local foot soldiers in large numbers. Later when the Chinese threat diminished with the rise of that country as an economic power, the SSB’s role was changed to that of a border guarding force. In 2001, it was renamed as Sashastra Seema Bal. 

According to a report, the major cause for worry for India is the increasing Chinese footprints in Nepal in the form of growing Chinese study centers and China’s keen interest to invest in both Nepal and Bhutan.  The same prevailing thought could be seen when director general of Sashastra Seema Bal, Arun Chaudhary, stressed on the need to revive the organization restoring its former role. 

“We want to revive the earlier role of SSB that included intelligence gathering. The case for this is pending with the ministry of home affairs,” said Chaudhary, speaking at a seminar on Indo-Nepal and Indo-Bhutan relations security challenges.

While Nepal’s leaders argue and the country drifts in a prolonged state of political limbo, its giant neighbors India and China are not waiting for it to sort itself out. They are stepping in, operating more brazenly than ever in Nepal to protect their interests.