KATHMANDU: Nepal’s foreign policy has been shaped by its unique geographical location, situated between two major powers—India and China—and its commitment to preserving sovereignty, independence, and national interests. As a landlocked nation with a small economy and limited military power, Nepal has tried to tackle the complexities of international relations by adhering to a foreign policy that emphasizes neutrality, nonalignment, and peaceful coexistence. Over the years, Nepal’s foreign policy has evolved in response to changing geopolitical dynamics, global challenges, and its internal political transitions. The guiding principles of Nepal’s foreign policy are enshrined in the country’s 2015 Constitution, which emphasizes sovereignty, territorial integrity, and the pursuit of global peace through multilateral cooperation.

In a world where global alliances and power structures are shifting, Nepal faces the dual challenge of balancing its relationships with neighboring countries, India and China, while also seeking to strengthen ties with the broader international community. This explainer examines the foundations of Nepal’s foreign policy, its key principles, historical context, and current challenges, providing insights into how the country navigates its diplomatic relations and maintains its sovereignty in an increasingly multipolar world.

What are the guiding principles and constitutional provisions shaping Nepal’s foreign policy?

Nepal’s foreign policy is built on a strong commitment to sovereignty, nonalignment, peaceful coexistence, and international cooperation. These principles have long been a cornerstone of Nepal’s diplomatic tradition and are deeply embedded in the country’s Constitution, guiding its approach to international relations. At the core of Nepal’s foreign policy is its commitment to nonalignment, a strategic choice that has been central since the Cold War era and continues to define its diplomatic stance today. Nepal has consistently sought to maintain neutrality, especially in navigating the competing influences of its two powerful neighbors, India and China. This approach has been reflected in Nepal’s historical participation in the Non-Aligned Movement (NAM), and in King Birendra’s 1975 proposal to declare Nepal a “Zone of Peace,” which, although endorsed by over 110 countries, was never fully supported by India and thus had limited practical effect. Nonetheless, the proposal remains a symbolic cornerstone of Nepal’s diplomatic identity.

Additionally, Nepal’s foreign policy is shaped by the Panchasheel principles—five principles of peaceful coexistence: mutual respect for sovereignty and territorial integrity, non-aggression, non-interference, equality and mutual benefit, and peaceful coexistence. These principles underscore Nepal’s goal of preserving its independence and avoiding entanglements in the great power politics that dominate regional and global diplomacy.

The Constitution of Nepal 2015 provides a clear legal foundation for the country’s foreign policy. In Part 4, which covers the Directive Principles, Policies, and Obligations of the State, the Constitution outlines both the aspirations and policy directions the state must uphold. Specifically, Clause 50(4) mandates that Nepal’s international relations should not only safeguard its sovereignty and national interests but also enhance its dignity on the global stage. Furthermore, Clause 51(m) lays out specific policies for international relations, including the conduct of an independent foreign policy based on the UN Charter, nonalignment, the Panchasheel principles, and international law. This provision also calls for the review of past treaties to ensure that future agreements reflect equality and mutual benefit, demonstrating Nepal’s intent to maintain a balanced and independent approach in a complex geopolitical environment.

Nepal’s Ministry of Foreign Affairs is responsible for implementing these principles, overseeing the management of diplomatic relations, fostering economic diplomacy, and coordinating international aid and development partnerships. The country maintains bilateral relationships with 182 countries and the European Union (as of second week of April) and is an active participant in key multilateral organizations, including the United Nations, the World Bank, the Asian Development Bank, The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the South Asian Association for Regional Cooperation (SAARC).

Despite these clear constitutional and policy frameworks, critics often point to implementation challenges. Nepal’s foreign policy is frequently seen as reactive, elite-driven, and lacking coherence, particularly when adapting to shifting global dynamics or regional diplomatic crises. While Nepal’s foreign policy foundations—sovereignty, neutrality, and peaceful engagement—remain intact, the country faces ongoing challenges in aligning its diplomatic actions with the evolving demands of global diplomacy. This remains a critical area for Nepal as it works to balance its domestic development needs with the complexities of its external relations.

How does Nepal’s location between India and China shape its foreign policy, and why is there a call for strategic hedging today?

Nepal’s geographic location between two powerful neighbors—India to the south, east, and west, and China to the north—has profoundly shaped its foreign policy. As a landlocked country, Nepal’s strategic position has placed it in the midst of significant geopolitical dynamics, making its foreign policy largely reactive and focused on maintaining sovereignty and neutrality. Over the decades, Nepal’s diplomatic stance has been driven by its need to navigate the competing influences of India and China, two regional giants with both historical ties and contemporary geopolitical interests in Nepal.

Historically, Nepal’s foreign policy leaned toward nonalignment, particularly after India’s independence in 1947 and China’s assertion of control over Tibet in 1950. Nepal sought to balance its relations with these two powers, emphasizing neutrality and sovereignty. This approach was formalized through Nepal’s participation in the Non-Aligned Movement (NAM) and the proposal to declare Nepal a “Zone of Peace” in 1975. While these positions helped Nepal avoid military entanglements, they also limited its ability to assert itself in global and regional affairs, keeping the country largely on the sidelines of larger international conversations.

India’s influence on Nepal has historically been stronger due to shared cultural, historical, and geographical ties, as well as Nepal’s reliance on Indian infrastructure for trade and sea access. However, China’s growing global influence has posed new challenges and opportunities for Nepal, especially with initiatives like the Belt and Road Initiative (BRI). Nepal’s dependence on both neighbors for trade, economic development, and security has made it imperative to maintain diplomatic ties with both while safeguarding its own interests.

In recent years, there has been growing recognition that Nepal’s traditional policy of neutrality and nonalignment is no longer sufficient in today’s rapidly shifting geopolitical landscape. The global order is now described as multipolar, with competing powers like the United States, China, India, and the European Union vying for influence in Asia. In this context, the call for a shift toward strategic hedging has gained traction.

Strategic hedging is a foreign policy approach that avoids exclusive alignment with any one power bloc while fostering relationships with multiple global and regional actors. For Nepal, this strategy provides a middle path: it allows the country to avoid over-dependence on either India or China while still engaging with emerging global powers to diversify its diplomatic and economic partnerships. This strategy seeks to minimize risks by creating a more flexible and balanced foreign policy framework.

Nepal has already made tentative steps in this direction. For instance, in 2017, Nepal joined China’s Belt and Road Initiative (BRI), seeking to develop much-needed infrastructure and enhance connectivity. This decision allowed Nepal to strengthen its economic ties with China while providing access to global markets. Similarly, in 2022, Nepal ratified the Millennium Challenge Corporation (MCC) compact—a $500 million U.S.-backed infrastructure project—despite opposition from China. These moves reflect Nepal’s desire to tap into multiple sources of development assistance and economic growth without committing fully to one side, though they also risk exacerbating tensions with its neighbors, particularly India and China.

While strategic hedging offers a potential solution for Nepal to manage its relationships with these powers, critics argue that for it to succeed, Nepal must clearly define its national interests and build the necessary institutional capacity to implement a nuanced foreign policy. Strategic hedging requires diplomats who are well-versed in the complexities of balancing relationships with multiple powers and can navigate the competing pressures from Nepal’s neighbors without alienating them.

Rather than abandoning its traditional neutrality altogether, scholars advocate for a more nuanced approach termed “constructive neutrality.” This model allows Nepal to maintain its sovereignty and independence while actively seeking economic, strategic, and developmental benefits from all sides. It enables Nepal to engage with global powers like China, India, and the United States, but in a way that prioritizes its national interests and ensures long-term stability.

Nepal’s location will always expose it to geopolitical pressures, but with strategic hedging, smart diplomacy, and a clear national vision, Nepal can transform its geographical vulnerabilities into strategic advantages. By engaging with multiple partners while maintaining diplomatic flexibility, Nepal can enhance its global standing and secure a more resilient future in a multipolar world. The key lies in clarity, coherence, and confidence in its foreign policy approach.

Why has Nepal’s foreign policy lacked coherence in practice despite its constitutional and policy clarity?

Nepal’s foreign policy framework, as outlined in its constitution, is anchored in robust provisions that emphasize sovereignty, nonalignment, and peaceful coexistence. Articles 50(4) and 51(m) of the 2015 Constitution of Nepal specifically call for a foreign policy that safeguards national sovereignty, promotes independence, and adheres to principles like nonalignment, the Panchasheel (Five Principles of Peaceful Coexistence), the UN Charter, and international law. While these constitutional provisions set a clear direction, the actual implementation of Nepal’s foreign policy has often been inconsistent, marked by politicization, institutional weaknesses, and reactive diplomacy.

A central challenge in Nepal’s foreign policy is that it is often shaped more by domestic political considerations than by long-term national interests. Since the restoration of multi-party democracy in 1990, Nepal has seen over 30 changes in its prime ministership, making it difficult to establish continuity in foreign relations. Each government has often reoriented foreign policy according to its political agenda, leading to reversals in key agreements or shifts in strategic priorities. This constant churn gives the impression of a foreign policy that is unpredictable and indecisive, which undermines Nepal’s credibility on the global stage.

Another issue is the lack of a strong, institutionalized foreign policy-making apparatus. The Ministry of Foreign Affairs (MoFA), while officially responsible for formulating and executing foreign relations, frequently plays a secondary role to the Prime Minister’s Office or political leaders. Major foreign policy decisions are often made on an ad-hoc basis, driven by political calculations or pressure from foreign powers, rather than through structured, deliberative processes led by career diplomats or foreign policy experts. This leads to ambiguity in Nepal’s international engagements, resulting in inconsistent messaging and a lack of strategic clarity.

For instance, Nepal’s decision to join China’s Belt and Road Initiative (BRI) in 2017 was initially welcomed as a potential game-changer for the country’s infrastructure development. However, progress remained sluggish in the years that followed. In December 2024, more than seven years after the original Memorandum of Understanding (MoU) was signed, Nepal and China finally formalized their cooperation by signing a BRI framework agreement during Prime Minister KP Sharma Oli’s visit to China.

The new framework outlines a three-year cooperation period, with an automatic extension for another three years unless either side opts to withdraw. Officials have clarified that the document is not a fresh initiative but rather a continuation of the commitments made under the 2017 MoU. Its primary aim is to establish clearer guidelines and implementation mechanisms for BRI-related projects in Nepal, which have long suffered from delays, ambiguity, and lack of coordination. Despite the promise of transformative infrastructure, BRI progress in Nepal has been hampered by funding uncertainties, a lack of clear project prioritization, and geopolitical caution.

Similarly, the Millennium Challenge Corporation (MCC) compact with the United States, which could have helped modernize Nepal’s electricity and road networks, faced years of political debate and protests before it was ratified. Both of these examples demonstrate how Nepal has been caught between competing geopolitical pressures without clearly articulating its own national interest.

A key factor contributing to the incoherence of Nepal’s foreign policy is the absence of a long-term foreign policy doctrine or strategic white paper. Unlike countries like India and China, which regularly publish comprehensive foreign policy strategies, Nepal lacks a publicly available and regularly updated foreign policy blueprint. Without such a framework, diplomats are often left to make decisions on sensitive issues without clear guidance or instructions, which results in inconsistent and reactive responses to international events.

The weak parliamentary oversight of foreign policy further exacerbates the problem. While treaties and international agreements require parliamentary ratification, the committees responsible for scrutinizing these agreements rarely engage in thorough analysis or help shape the nation’s foreign policy direction. This lack of accountability allows executive overreach and leads to fragmented and incoherent diplomatic actions.

Additionally, Nepal’s foreign policy suffers from a lack of investment in diplomatic expertise. Ambassadorial positions are often filled through political patronage rather than merit, sidelining career diplomats who possess the necessary institutional memory and global experience. This undermines Nepal’s credibility in multilateral forums and weakens its ability to pursue its national interests effectively on the global stage.

How does Nepal’s position as a buffer state between India and China shape its foreign policy?

Nepal’s foreign policy is profoundly shaped by its geographic position between two of the world’s most powerful and influential nations, India and China. Located between these two giants, Nepal finds itself in a unique and often precarious geopolitical space, where it must constantly balance the interests and influences of both neighbors. The country shares a 1,751 km open border with India and a 1,389 km mountainous border with China (specifically Tibet). While China’s influence is more strategic and less integrated into Nepal’s daily life, India’s presence is immediate and deeply ingrained in Nepal’s economic, political, and social fabric. Over 60% of Nepal’s trade is conducted with or via India, and the majority of the country’s imports, including fuel, food, and medicines, come through Indian ports and roads. Additionally, more than 4 million Nepali citizens live or work in India, thanks to the open-border migration facilitated by the 1950 Indo-Nepal Treaty. This deep structural dependence on India has made it Nepal’s dominant partner, but it has also led to occasional tensions, particularly when India’s influence extends into Nepal’s internal politics.

Historically, Nepal has played the role of a buffer state between larger powers. In imperial times, it acted as a zone of separation between the British Raj and Qing China. During the Cold War, Nepal maintained friendly relations with both communist China and democratic India, avoiding entanglement in the regional power struggles. King Birendra’s 1975 proposal to declare Nepal a “Zone of Peace” symbolized this desire to preserve neutrality and sovereignty. Despite garnering support from over 110 countries, the proposal ultimately failed due to India’s non-endorsement, reflecting Nepal’s ongoing challenge in balancing its relations with both neighbors. Nepal’s longstanding goal has been to maintain strategic autonomy amidst competing powers, a goal that remains central to its foreign policy.

In the 21st century, Nepal’s buffer status has become more complicated. With the intensifying rivalry between India and China, especially after events like the 2017 Doklam standoff and the 2020 Galwan clash, Nepal faces mounting pressure to pick sides, even though its official policy remains nonaligned. In 2017, Nepal signed an agreement with China to join the Belt and Road Initiative (BRI), which promised infrastructure investment and improved connectivity. However, this move raised concerns in India about China’s growing influence in South Asia. Conversely, Nepal ratified the Millennium Challenge Corporation (MCC) Compact with the United States in 2022, which aligns with Indo-Pacific strategies, leading to apprehensions in Beijing. These developments illustrate Nepal’s approach of “strategic hedging”—seeking to engage with multiple powers to maximize national interests without fully aligning with either side. However, this strategy carries risks, as it exposes Nepal to competing geopolitical pressures from both India and China.

Nepal’s geographic position also exposes it to significant vulnerabilities. In 2015, Nepal faced an undeclared blockade by India during a political crisis, which caused a humanitarian crisis by disrupting the supply of fuel and goods. This incident highlighted Nepal’s overdependence on India and the potential dangers of relying too heavily on one neighbor. Both India and China also maintain close surveillance of Nepal’s internal politics, with China playing an influential role in managing party unity within Nepal’s ruling coalition in recent years. Additionally, as part of the broader Indo-Pacific contest, Nepal increasingly finds itself in the crosshairs of strategic rivalry, where each diplomatic move is scrutinized for its implications in the great power competition.

Given these challenges, Nepal’s policymakers face a critical decision: should Nepal continue to function as a passive buffer, or should it rebrand itself as a “bridge state”? The concept of Nepal as a bridge state—acting as a diplomatic and economic link between India and China—has gained traction in recent years. Such a strategy could allow Nepal to foster cooperation between its two neighbors while preserving its sovereignty and avoiding entanglement in their rivalry. To successfully embrace this role, Nepal would need to improve infrastructure and connectivity across the Himalayas, foster balanced and transparent diplomacy with both India and China, and develop a consistent and coherent foreign policy free from domestic political shifts.

Why does Nepal lack a coherent and consistent foreign policy despite constitutional and institutional guidelines?

Nepal’s foreign policy, despite being guided by clear constitutional principles and institutional frameworks, has often been described as incoherent, inconsistent, and reactive rather than proactive. While the country has long maintained a policy of non-alignment, neutrality, and sovereignty protection, its foreign relations often appear to be shaped by domestic political fluctuations and external pressures. The lack of a cohesive foreign policy can be attributed to several internal and external factors.

Nepal’s Constitution of 2015 explicitly outlines the principles for its foreign policy. Additionally, the country’s foreign policy guidelines emphasize strategic autonomy—intending to avoid excessive dependency on any single power. However, these well-defined constitutional principles have often been undermined by inconsistent foreign policy decisions and a lack of long-term strategic direction.

One of the main factors contributing to the inconsistency of Nepal’s foreign policy is the political instability within the country. Since the abolition of the monarchy in 2008, Nepal has undergone significant political changes, transitioning from a constitutional monarchy to a federal democratic republic. The constant political realignments, coalition governments, and frequent leadership changes have made it difficult for any single government or leadership to formulate and implement a long-term foreign policy agenda. Each new government often brings its own priorities and policies, resulting in a lack of continuity in Nepal’s foreign relations.

Nepal’s foreign policy is also deeply influenced by its economic situation and dependence on its neighbors. As a landlocked country, Nepal is heavily reliant on India for trade and access to the sea. India provides essential goods, fuel, and transit for Nepal’s imports. On the other hand, China has emerged as an important partner, particularly in terms of economic opportunities, such as infrastructure projects under the BRI. Nepal’s leaders are often caught between balancing economic needs with national sovereignty, a delicate task made more complicated by external pressures. Nepal’s dependence on India for imports, transportation, and security assistance limits the flexibility of its foreign policy. Meanwhile, China’s growing influence through infrastructure investments and trade raises concerns that Nepal could become too reliant on China, particularly in light of the regional competition between China and India. These competing external influences often lead to fluctuating policies as Nepal seeks to appease both neighbors and balance their interests. Furthermore, Nepal is under pressure from global powers like the United States to align with certain geopolitical priorities, such as participating in the MCC program or supporting the Indo-Pacific Strategy.

Another contributing factor to the incoherency of Nepal’s foreign policy is the inefficiency of the foreign ministry and the lack of skilled diplomats. Despite having a Ministry of Foreign Affairs responsible for diplomatic relations, there is a noticeable lack of professionalism and expertise in foreign policy decision-making. Nepal’s foreign policy has often been reactive rather than proactive. This is reflected in the country’s tendency to respond to events as they arise, whether it is reacting to India’s concerns over Nepal’s engagement with China or responding to China’s initiatives in Nepal after the signing of the BRI agreement. The lack of long-term planning and an overreliance on short-term diplomatic responses has hindered the development of a more cohesive and strategic foreign policy.

The domestic political divide also plays a significant role in shaping the inconsistency of Nepal’s foreign policy. Political parties in Nepal often have differing views on how to approach relations with India, China, and other global powers. Pro-India parties tend to advocate for closer ties with India, emphasizing trade and security cooperation, while pro-China factions push for deeper engagement with China, particularly in terms of economic development. This ideological polarization within Nepal’s political landscape makes it difficult for the government to adopt a unified foreign policy. At times, policy shifts can be seen as attempts by the ruling party to consolidate domestic support by aligning with one foreign power or the other.

Given Nepal’s critical geopolitical position and its reliance on both India and China, it is essential for the country to re-engineer its foreign policy into a more coherent, consistent, and strategic framework. Overcoming domestic political fragmentation, strengthening institutional capacity, and prioritizing long-term national interests over short-term political expediency will be key. Nepal must define its national interests clearly and adopt a pragmatic, balanced approach in its dealings with both neighbors and global powers. Additionally, a professional and capable foreign service is necessary to execute this policy and engage diplomatically on the global stage. Only by addressing these issues can Nepal avoid the pitfalls of policy inconsistency and ensure that its foreign relations contribute to national security, economic development, and sovereignty.

How have Nepal’s relations with India evolved in recent decades, and what are the key challenges in the relationship today?

Nepal and India have historically shared strong cultural, economic, and political ties, grounded in centuries of mutual interaction. These bonds, however, have evolved significantly over recent decades, marked by periods of cooperation and tension. The dynamics of their bilateral relationship have been influenced by geopolitical developments, domestic political shifts, and economic concerns. While both countries remain close neighbors, their relationship has been characterized by various challenges that continue to shape their interactions.

Historically, Nepal and India have enjoyed a deep cultural, historical, and geographical connection. They have been linked through trade routes, religious ties, and social interactions, particularly in areas like the Terai and Ganga plains. The relationship was further solidified during the British Raj, when Nepal’s monarchy and India’s colonial administration cooperated, particularly through military alliances, including the recruitment of Nepali soldiers (Gurkhas) for the British Army. After India’s independence in 1947, Nepal and India maintained friendly relations, with India becoming Nepal’s primary trade partner and security ally. Nepal’s foreign policy was largely influenced by India due to their shared interests and geographic proximity. However, as Nepal began asserting its sovereignty more firmly in the latter half of the 20th century, tensions began to arise.

The signing of the 1950 Treaty of Peace and Friendship between Nepal and India marked a significant milestone in their bilateral relations. The treaty, which facilitated the free movement of people and trade, was intended to strengthen security cooperation. However, Nepal later felt that the treaty limited its autonomy, particularly in foreign policy matters where India exerted significant influence. The security provisions of the treaty also raised concerns in Nepal about becoming overly dependent on India.

In the 1980s and 1990s, Nepal began distancing itself from India’s influence, particularly as the country sought to assert its political independence. The 1989 blockade, imposed by India in retaliation for Nepal’s decision to import goods through China and revise its trade policies, was a major turning point. The blockade, which lasted for several months, led to significant strains in the Nepal-India relationship and fueled anti-India sentiment within Nepal. The 1990s also saw democratic reforms in Nepal, which improved relations with India, especially during King Birendra’s reign. Nepal’s push for becoming a Zone of Peace, proposed by King Birendra in 1975 and endorsed in the 1990s, was an attempt to distance Nepal from military alliances with both India and China. While many countries supported the idea, India was reluctant to endorse it due to security concerns in the region.

In the early 2000s, Nepal’s relationship with India began to change once again, partly due to domestic political turmoil. The rise of Maoist insurgency and the subsequent end of the monarchy in 2008 led to the establishment of the Federal Democratic Republic of Nepal. The 2006 People’s Movement (Jana Andolan II) and the consolidation of democracy resulted in a more diversified foreign policy. While India remained Nepal’s key trade and security partner, Nepal’s growing engagement with China, particularly through the signing of Belt and Road Initiative (BRI) agreements in 2017, raised concerns in India. India viewed Nepal’s increased ties with China, especially in infrastructure and trade, as a challenge to its regional influence.

A significant flashpoint in Nepal-India relations occurred in 2015 during Nepal’s promulgation of its new constitution. India criticized the constitution for not adequately addressing the concerns of Nepal’s Madhesi minority, who are ethnically and culturally closer to India. India also accused Nepal of not ensuring adequate political representation for the Madhesi people. This criticism led to diplomatic tensions, and Nepal accused India of imposing a border blockade to pressure Nepal into revising the constitution, although India denied these allegations. This episode deepened suspicions in Nepal about India’s influence in its internal affairs. The situation worsened further with the 2019 territorial dispute, when Nepal published a new political map that included the Kalapani, Lipulekh, and Limpiyadhura regions, areas claimed by India. India expressed concern, calling Nepal’s actions “unilateral” and in violation of established agreements.

In recent years, Nepal-India relations have been marked by both cooperation and continued tension. India remains Nepal’s largest trade partner, and both countries share strong cultural and people-to-people ties. They have cooperated in combating the COVID-19 pandemic and in economic initiatives such as infrastructure development and tourism. However, territorial disputes, economic competition, and diplomatic challenges have continued to strain their relationship. Nepal’s growing economic cooperation with China, including participation in the BRI, has been perceived as a direct challenge to India’s traditional sphere of influence.

Several challenges continue to affect Nepal-India relations today. The ongoing border dispute over the Kalapani region remains a major point of contention, with both countries having military deployments along the disputed areas, which has heightened tensions. Additionally, while Nepal relies heavily on India for trade, China’s expanding influence in Nepal’s infrastructure sector creates economic competition for India. Nepal’s desire to assert political autonomy sometimes conflicts with India’s strategic interests in the region, particularly as Nepal seeks to diversify its foreign relations. Nationalist sentiments in Nepal, fueled by past events like the 2015 blockade and territorial disputes, have resulted in rising anti-India sentiment among certain sectors of society.

Moving forward, Nepal and India must navigate these challenges through constructive diplomacy, mutual respect, and dialogue to maintain long-term peace and cooperation. Nepal’s foreign policy approach should continue to emphasize neutrality and strategic hedging while maintaining good relations with both India and China. As Nepal continues to assert its sovereignty and independence, it must work to bridge these diplomatic divides by fostering a balanced foreign policy that ensures both economic prosperity and national security.

What are Nepal’s relations with China, and how have they evolved in recent years?

Nepal’s relationship with China has evolved significantly over recent decades, transitioning from a passive partnership to a more active and strategic engagement, largely driven by regional geopolitics and economic needs. As Nepal balances its relationship with India, its southern neighbor, it has increasingly turned to China for economic opportunities, infrastructure development, and strategic engagement. This shift in Nepal-China relations reflects both historical ties and the country’s contemporary political and economic realities.

Nepal and China share a long history of interaction, primarily through trade routes passing through the Himalayan region. However, their relationship remained minimal and peaceful until the 1950s. Nepal officially established diplomatic relations with the People’s Republic of China in 1955, and the relationship gradually expanded. Despite this, Nepal’s close cultural and political ties with India often meant that Nepal’s relationship with China was secondary. Nonetheless, China has always maintained an interest in Nepal due to its strategic location between China and India, as well as its potential as a trade route into South Asia. In the years following the establishment of diplomatic relations, Nepal remained largely aligned with India, with China being seen as a secondary partner. However, over time, Nepal began exploring alternative sources of economic and political support, particularly in light of its evolving internal political landscape.

The 1990s marked a pivotal period in Nepal-China relations as Nepal began its transition to democracy. With the end of the Panchayat system and the establishment of multiparty democracy in 1990, Nepal started diversifying its foreign relations. Although the country’s foreign policy remained heavily influenced by India, Nepal began to engage more actively with China, particularly in trade and infrastructure development. A significant milestone was the 1996 trade agreement between Nepal and China, which allowed Nepal to access Chinese markets directly and reduce its dependence on India. However, trade volumes remained relatively low. During this period, Nepal continued to tread carefully, balancing its diplomatic ties with both India and China, ensuring that its foreign policy did not antagonize its larger neighbor to the south.

The 2010s marked the most significant shift in Nepal-China relations. The abolition of the monarchy and the establishment of the Federal Democratic Republic of Nepal in 2008 created new opportunities for Nepal to rethink its foreign policy. Amidst the need for economic development, Nepal increasingly turned to China for both political and economic partnerships. The launch of China’s Belt and Road Initiative (BRI) in 2013 was a catalyst in this transformation, offering Nepal an attractive avenue for economic growth through infrastructure development. In 2017, Nepal formally signed a framework agreement with China to participate in the BRI. This agreement focused on enhancing infrastructure connectivity, trade, and investment, marking a departure from Nepal’s traditional dependence on India for economic and infrastructure support. The BRI agreement opened up possibilities for Chinese financing for critical projects in Nepal, including roads, railways, and hydropower plants. In December 2024, more than seven years after the original Memorandum of Understanding (MoU) was signed, Nepal and China finally formalized their cooperation by signing a BRI framework agreement during Prime Minister KP Sharma Oli’s visit to China. The new framework outlines a three-year cooperation period, with an automatic extension for another three years unless either side opts to withdraw.

Nepal’s engagement with China has deepened significantly in recent years, driven not only by economic factors but also by a shift in Nepal’s foreign policy priorities. The BRI agreement has enabled China to undertake a series of major infrastructure projects in Nepal. Notably, the Tibet-Nepal railway project, which aims to link Lhasa in Tibet to Kathmandu, holds the potential to significantly enhance trade and mobility between the two countries, improving Nepal’s connectivity with China. In addition to infrastructure, Nepal has sought to increase collaboration with China in areas such as tourism, education, and cultural exchange. The expansion of people-to-people exchanges and scholarships has further strengthened the relationship, fostering deeper cultural diplomacy between the two nations.

Additionally, Nepal’s growing economic dependence on China raises concerns about sovereignty and debt sustainability. While Chinese investment has been crucial for Nepal’s infrastructure development, critics warn that Nepal may fall into a “debt trap,” where it struggles to repay loans and becomes politically and economically indebted to China. This concern is particularly pertinent as Nepal’s reliance on Chinese financing grows, and there are fears that Nepal could lose its economic autonomy in the long run.

China’s engagement with Nepal is driven not only by economic interests but also by broader strategic considerations. Nepal holds significant geopolitical importance as a buffer state between China and India. By deepening its relationship with Nepal, China seeks to increase its influence in the region and reduce India’s dominance. Nepal’s proximity to the disputed Tibetan region makes it strategically important in China’s broader efforts to assert its influence in the Himalayas and counter India’s strategic ties with the United States and other Western powers. Furthermore, Nepal is an essential part of China’s broader plans for regional connectivity, particularly in the context of the China-Pakistan Economic Corridor (CPEC). Nepal could play a key role in facilitating trade and transport links between South Asia and China, contributing to the growth of the wider South Asia-China trade network.

In recent years, Nepal’s relationship with China has grown in importance, with Nepal seeking to diversify its foreign relations and reduce its dependence on India. China provides Nepal with significant opportunities for economic development, particularly through infrastructure projects and investments. However, this relationship also brings challenges related to sovereignty, territorial disputes, and the risks of becoming overly reliant on Chinese influence. As Nepal continues to navigate its delicate position between two major powers, it must carefully balance its relations with both China and India. By leveraging its partnerships with both neighbors and engaging with other global powers, Nepal can safeguard its sovereignty and pursue economic development without being caught in the crossfire of larger geopolitical rivalries.

How does Nepal approach multilateral organizations like the United Nations, and what role does it play in global diplomacy?

Nepal has long maintained an active presence in various multilateral organizations as a key component of its foreign policy strategy. This engagement aims to strengthen its diplomatic standing, ensure sovereignty, and promote global peace and security. Nepal’s participation in these global institutions reflects its commitment to non-alignment, peaceful coexistence, and the promotion of a rules-based international order.

As a founding member of the United Nations (UN) since 1945, Nepal has been a staunch advocate for the UN Charter, consistently emphasizing sovereignty, territorial integrity, and human rights. The UN provides Nepal with an essential platform to raise concerns about a range of global issues, including climate change, human rights, and disarmament. Nepal’s foreign policy has consistently supported the UN’s peacekeeping efforts and international diplomacy, with the country actively participating in efforts to resolve global conflicts. One of the most significant aspects of Nepal’s relationship with the UN is its substantial contribution to peacekeeping missions. Since the 1950s, Nepalese soldiers have been involved in peacekeeping operations around the world, particularly in regions like Africa, the Middle East, and the Balkans. Nepal’s role in these missions not only demonstrates its commitment to global peace and security but also enhances its international reputation, providing opportunities to foster bilateral ties and engage with a diverse range of nations.

A core aspect of Nepal’s multilateral diplomacy is its commitment to non-alignment, which has been central to the country’s foreign policy. During the Cold War, Nepal adeptly navigated its position between two superpowers—the United States and the Soviet Union—while being surrounded by the major powers of India and China. This non-alignment policy continues to be a cornerstone of Nepal’s global diplomatic stance, despite the evolving dynamics of international relations. Nepal is also a member of numerous other international organizations, including the South Asian Association for Regional Cooperation (SAARC), the World Trade Organization (WTO), the World Health Organization (WHO), and the Asian Development Bank (ADB). These memberships enable Nepal to maintain important diplomatic relations with various countries and focus on national interests in critical areas such as trade, economic development, climate action, and humanitarian efforts.

Nepal’s foreign policy also emphasizes global cooperation on key issues such as climate change. The country has aligned itself with international frameworks, especially the Paris Agreement, advocating for climate justice for mountain states like Nepal that are disproportionately affected by global warming. Nepal has been an active participant in discussions on sustainable development and peace-building at the global level, consistently advocating for policies that benefit both its own citizens and the broader international community.

Despite its active participation, Nepal faces challenges in asserting its voice in multilateral diplomacy. As a small, landlocked country with modest economic and military resources, Nepal often has to work harder than larger powers to secure its interests in international negotiations. Nonetheless, Nepal uses its diplomatic channels to advocate for smaller and developing nations, emphasizing the importance of a rules-based international order and regional stability.

How should Nepal’s foreign policy evolve to meet future challenges?

As Nepal navigates an increasingly multipolar world, marked by rapidly shifting global alliances and geopolitical tensions, its foreign policy must evolve to safeguard its sovereignty, ensure economic growth, and foster regional peace. Nepal faces external challenges from its powerful neighbors, India and China, as well as internal issues related to political stability and development. To address these challenges, Nepal should focus on several key aspects in its foreign policy approach.

First, Nepal’s long-standing policy of non-alignment has served it well in the past, but given the changing geopolitical dynamics, it may be time to reconsider this strategy. Instead of adhering strictly to traditional neutrality, Nepal could adopt a more flexible approach, such as strategic hedging. This strategy would involve maintaining cordial relations with both India and China while diversifying Nepal’s foreign relations with other global and regional powers. Strategic hedging would allow Nepal to balance its foreign policy, preventing over-reliance on any single country or bloc. Practically, this means continuing to engage with India and China, while also building deeper relationships with global powers like the United States, the European Union, and Japan. Nepal should also work to enhance its role in multilateral organizations and regional cooperation forums, such as the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

Second, regional cooperation and economic diplomacy should be prioritized. Nepal’s strategic position as a landlink between India and China offers significant opportunities to foster cross-border trade, investment, and infrastructure development. Strengthening its relationships with both of these neighbors is crucial for Nepal’s economic growth and security. Nepal can use its position to advocate for peaceful resolutions of regional disputes and to promote stability. In terms of economic diplomacy, Nepal must focus on attracting foreign investment, improving trade relations, and diversifying its economy. As a landlocked nation, Nepal has limited access to international markets, so it should leverage its natural resources, such as hydropower, to secure international partnerships in this sector. The potential for Nepal’s hydropower industry is immense, and developing this sector could be a significant driver of economic growth.

Given Nepal’s vulnerability to climate change, environmental diplomacy should also be a central component of its foreign policy. Nepal must actively participate in international climate change negotiations and advocate for the rights of small and vulnerable states. Nepal can position itself as a leader in promoting sustainable development and climate justice, particularly given its role in the mountain ecosystems of the Himalayas. Its participation in global environmental forums will enable Nepal to address climate challenges and advocate for solutions that protect vulnerable regions, both within Nepal and globally.

Finally, for Nepal to maintain an effective foreign policy, it must strengthen its domestic institutions and ensure political stability. A stable domestic governance structure is essential for Nepal to navigate complex international issues effectively. This includes continuing efforts to consolidate democratic institutions, address political divides, and strengthen the rule of law. Additionally, Nepal must enhance the capabilities of its Ministry of Foreign Affairs, improve diplomatic training, and build a more dynamic and responsive foreign service.