The peace process was deadlocked, with extreme polarization within and among the political parties on various issues.

The win-win situation for India and China lies in respecting the ‘buffer-status of Nepal’ which will also ensure political stability in Nepal.

India needs to chalk out a new paradigm of engagement with the emerging Nepal in which economic and border management issues are prioritised over political issues.

With Prachanda’s announcement that the Maoists intend to launch an indefinite nationwide general strike, a major crisis seems to be brewing in Nepal.

India should clarify through actions and words that it has no intention of interfering in Nepal, that it respects Nepal’s sovereignty and that it is ready to work with any dispensation in Nepal for furthering mutual security and economic concerns.

Nepal Prime Minister Madhav Kumar Nepal, who heads a twenty-two party coalition government, chose India for his first official foreign visit after assuming office two months back. This ‘goodwill’ visit was undertaken against the background of Nepal’s increasingly fragile peace process. The bilateral agenda was just a pretext. What brought him to New Delhi were several domestic factors. While this is not to say that there are no urgent bilateral issues between the two countries, the most crucial factor today is India’s support for Nepal’s coalition government.