The army row gives us a glimpse of India's concerns, its power and limits. The Maoists have been relatively successful in portraying the opposition to sacking General Katawal as India-inspired. They are convinced Delhi's suggestions and warnings constitute an unacceptable interference in Nepal's internal affairs. The Maoists then tell their support base that they have not been able to effect any change because of the power exercised by "expansionists and feudal collaborationists".

What they forget is that they would still be in the jungles fighting an unwinnable war if not for India's mediation. If Nepal's political class had succeeded in mounting a solely domestic opposition to the royal regime, if the parties and Maoists had not needed India to act as 'facilitator' for the 12 point-agreement, if they had not rushed to Delhi to instrumentally use India to advance their own partisan interests, and if they had tried to be more self-reliant, they could have told the Indians to keep away.

The reality is that this peace process is essentially a compact between India (which acted as a guarantor of the 12-point deal and later got the army on board), the Maoists (who promised to accept multiparty democracy) and NC (which agreed to dump the monarchy). And now, the Maoists suddenly remember that domestic political decisions are none of India's business.

You cannot be selective about a foreign role. If they used Delhi at some point, when Delhi feels its interests are at stake, it will get involved. All politicians are aware of this reality so whipping up a frenzy about the Indian role without tackling the fundamentals of national politics and economy is hypocritical, futile and opportunistic.

The real question is why did the Indians assert themselves this time around? Since November 2005, India's role has been critical but low-key. There have only been three occasions when Delhi stepped in visibly.

When the Maoists walked out of government in September 2007, Shyam Saran rushed in as the PM's special envoy to push all parties to go for polls. When the second Madhes movement threatened to derail the April polls, a meeting was held at the Indian ambassador's residence between Madhesi leaders and government representatives, preparing the basis for the eight-point deal. This had the unfortunate consequence of reinforcing the image of Madhesi leaders as Indian puppets, but passed a powerful message to the palace (which saw that movement as the last hope to prevent elections) about where India stood.

This is the third time. Delhi feels that the balance of power on which the peace process rests will collapse if the Maoists sack Katawal and appoint a more pliable chief. The institutional structure would be shaken and the party would dictate terms to the army. They see it as a sub-plot of the larger Maoist plan to back away from the commitment to multiparty democracy.

And there is an underlying China dimension. Beijing is quite happy with the Maoists for having delivered on its promise to stifle Tibetan dissent. China feels that the top echelons of the Nepal Army are dominated by officers close to India and the US. It has already backed the integration process and would be happy to see Maoist commanders occupy strategic positions in the NA.

India wants 'controlled stability' in Nepal to protect its security interests. But not only does lasting stability look elusive, even the control and influence they exert would get steadily diluted if the Maoists take over the army. The aim of co-opting and 'taming' the Maoists would fall flat.

However, Lainchaur did go overboard in passing the message. The nature of the present envoy has not helped either. A senior NC leader, considered to be close to India, said: "Rakesh Sood lacks the patience and clarity of Shyam Saran, or the warmth and empathy of Shiv Mukherjee. His inter-personal skills are weak and no one trusts him."

What is clear is that this episode has harmed ties between India and the Maoist-led government. There will not be an immediate reaction if the Maoists go ahead, but a policy review when a new Indian government comes in is certain.

And don't be surprised if sections in the Indian establishment who have criticised the 12-point agreement, and who prefer to play the 90s game of breeding instability as a way to keep Nepali political actors in check, gain ascendance.