(Bloomberg) -- Nepal Prime Minister Puspha Kamal Dahal will use his trip to India to push for better terms for Gurkha fighters recruited for India’s army, posing a test for New Delhi as it vies for influence with Beijing in the Himalayan nation. 

Ties between Nepal and India came under strain when Prime Minister Narendra Modi’s government last year replaced long term employment with shorter contracts tenure and no pension. Nepal, weeks later, stopped the 200-year-old recruitment process until there was more clarity. 

Sending members of the Gurkha clan known for their military prowess to the Indian military has been a key source of revenue for Nepal, which is unhappy with the shorter contracts. There’s concern in some quarters in India’s government that this could see Kathmandu move closer to China that’s offering development projects. 

Dahal will hold “extensive talks” with Modi on Thursday during his four-day visit and the issue of Gurkha recruitment will be brought up, according to people familiar with the matter. New Delhi and Kathmandu could agree to absorb some Gurkha soldiers into the police and paramilitary organizations after they finish their army service, similar to their Indian counterparts, they said. 

Nepalis make up about 60% of India’s 44 Gurkha battalions, which each comprise of a thousand soldiers. These battalions continually rotate through India’s western and northern borders with Pakistan and China, making them a significant part of India’s military planning. 

India’s Ministry of Foreign Affairs and the Nepal Embassy in New Delhi declined to comment. In an earlier statement, the ministry said the meeting continues the tradition of high level exchanges between India and Nepal. 

Path of Fire

Gurkha troops have been part of the subcontinent’s military since 1815 when the British East India Company and the Kingdom of Nepal signed a peace treaty, opening the doors for enlisting them. An agreement between London, New Delhi and Kathmandu after India’s independence in 1947 allowed India and Britain to continue recruiting Gurkha fighters into their armies

The battalions are also made up of Indian Gurkhas who are also unhappy over changes in the recruitment policy called Agnipath or “path of fire.”

The shorter terms triggered unrest across India with angry youth facing bleak job prospects, began blocking rail traffic and highways in many states for days. Some even set trains on fire.

With Dahal’s first visit to New Delhi since becoming prime minister again in December, India is looking to work on the economic front which includes givingg Kathmandu a chance to be part of a highway network connecting Bhutan and Bangladesh for seamless cargo and passenger traffic.

China has been far ahead though, offering Nepal in 2018 a rail network tunneling through the mountainous Tibetan plateau that opens an alternative trade route under Beijing’s flagship Belt and Road Initiative. However, the trans-Himalayan rail network is delayed over concerns about financing, giving temporary relief to New Delhi, officials tracking the development said. 

India could announce a 25-year agreement to purchase electricity from Nepal, increasing air traffic between the nations and launch an inter-country digital payment system, the people said. Building a cross-country petroleum pipeline into Nepal, and pushing a trilateral electricity trade pact with Bangladesh are also likely to figure, they added. 

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