Stratfor (subscription recommended) has the following to say about Nepal:
Former Nepalese Prime Minister and Nepalese Congress Party President Girija Prasad Koirala was released from house arrest April 1 after he and hundreds of other political activists were jailed during King Gyanendra's royal takeover in February. Gyanendra is clearly using this gesture as an overture to India in hopes that New Delhi will resume military assistance in the king's fight against the Maoist insurgency in Nepal. New Delhi, however, will keep to its hard-line stance against the king's power grab until Nepal's state of emergency expires at the end of April -- when India can afford to offer some degree of legitimacy to the Hindu kingdom.
India is not in a rush to resume military aid to Nepal, however, and plans to teach the king a lesson by sticking to its hard-line stance and refusing to legitimize the royal government until democracy is restored in the kingdom. When Kathmandu's emergency rule expires at the end of April, India will expect the king to bend to international and domestic pressure and bring back multi-party democracy rather than risk isolating Nepal even further by toying with the constitution and extending emergency rule by six months. India then could champion itself as the regional superpower with the capability to police the subcontinent at the upcoming South Asian Association for Regional Cooperation summit, thus overriding Pakistan's recent attempts to project regional influence.
Time is not on Gyanendra's side. Unable to fully rely on Pakistan's assistance, he faces a Maoist insurgency that is far from resolution and an increasingly untenable domestic opposition, now that democratic parties in Nepal have found common cause to resist the royal government with the Maoists. Considering the costs and benefits of extending emergency rule, the king is more likely to seek India's support by restoring democracy in Nepal.
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