Between Optimism and Skepticism

In the aftermath of the ‘September revolution’, and the formation of a new interim government in Nepal under the leadership of former Chief Justice, Sushila Karki, there are concerns and apprehensions about the trajectory that Nepal will adopt in the coming months and the interim government’s ability to successfully organise fresh elections in March 2026. While these factors are important domestically, there are also questions about how the country’s foreign policy will reorient in the backdrop of this overhaul of the country’s governance. This question of reorientation becomes more pronounced in the case of two of Nepal’s most influential neighbours- India and China. On September 18, Prime Minister Narendra Modi held a telephone conversation with the interim Prime Minister in Nepal. The call followed the meeting between the Indian ambassador to Nepal and Sushila Karki on September 16 and the statement of support extended by India after the formation of the interim government on September 12. During the call, Prime Minister Modi offered his condolences to the people who lost their lives in the protests and expressed India’s support in the interim government’s efforts to establish peace and stability. On the same day, the Chinese Ambassador to Nepal, Chen Song, also met Nepal’s interim Prime Minister. He expressed support for the development and political path chosen by the people of Nepal and further committed to strengthening the bilateral relationship. Beijing also expressed support to the formation of the interim government, albeit a bit delayed, and offered to work with Nepal based on the five principles of peaceful co-existence. Historically, Nepal’s geographical location has had a significant influence on how other countries have engaged with it. For both India and China, the proximity to Nepal makes the cultivation of this relationship indispensable. For the political parties in Nepal as well, ties with India and China are intertwined with their domestic constituencies. China considers Nepal important from the perspective of security, as the country borders Tibet and also acts as a gateway for China to connect with South Asia. Thus, Beijing has historically tried to cultivate strong ties with Nepal. A manifestation of this was the signing of the framework agreement of the Belt and Road Initiative (BRI) in 2017 to further enhance connectivity between the two sides and augment Nepal’s infrastructure development. China has also invested in building its ties with the elites in Nepal, particularly the leaders of the communist parties, as they have similar ideological moorings. It has relied on these ties to further expand cooperation. It is because of the enormous stakes that it has in the relationship and in Nepal’s internal affairs, that its response to the recent protests was interpreted as ‘cautious’ and ‘muted.’ A day after the protests turned violent, China’s spokesperson released a statement hoping for social order and stability to be restored soon. Its response reflected a wait and watch approach, in anticipation of how the situation will develop in the coming days and weeks. India and Nepal on the other hand boast of a very rich historical relationship which has transformed into a bilateral relationship focused on mutual convergences and working towards expanding trade and connectivity cooperation between the two sides. While Kathmandu and New Delhi have tried to emphasise more on areas of cooperation, the long-standing grievances related to the border issue and about India’s apparent ‘interference’ in Nepal’s internal affairs have all resurfaced time and again and shaken up the relationship. These grievances have been leveraged by different political factions to solidify their control over the country. Former Prime Minister K.P. Sharma Oli was expected to travel to India in September in what would have been his first visit to India in his latest term. While the two sides continued regular engagements in the past year, through visits by senior leadership on both sides, a formal invitation to the CPN (UML) leader was elusive. While Prime Minister Modi had met Oli on the sidelines of the BIMSTEC summit in April, ties between the two had been frosty. Since assuming power, the CPN-UML and Nepali Congress coalition have had a tilt towards China. This was further compounded by Oli not visiting India in a year since he assumed power. In December last year, he visited China as part of his first trip abroad and signed another cooperation agreement on BRI, pushing for its implementation. A day before the protests erupted, the two sides began a joint military exercise called Sagarmatha Friendship 2025. Thus, for Beijing, the previous administration under Oli was favourable. For India, the current as well as the previous administrations under Oli have seen a concerted effort to cultivate support by fomenting anti-India sentiment on issues related to the border and other topics of contestation between the two sides. Even though the protests and its subsequent violent escalation did raise security concerns for New Delhi, the leaders’ decision to connect over a call and the Nepali PM’s positive disposition towards her Indian counterpart showed that the two sides didn’t want to waste any time in establishing the first contact. A few weeks before the erstwhile coalition government under K.P. Sharma Oli was forced to hand in his resignation; he was in Tianjin to attend the 25th summit of the Shanghai Cooperation Organisation, of which Nepal is a dialogue partner. During his trip, he held a meeting with Xi Jinping and also stayed to participate in the victory day celebrations by China, commemorating 80 years of the second world war. His visit was criticised for three reasons- for attending the victory day parade and indirectly taking a strong anti-Japanese stance, for failing to address Nepal’s concerns about the opening of the Lipulekh pass and for not calling out Beijing for falsely including Nepal under the Global Security Initiative (GSI), as well as the Global Civilisational Initiative (GCI), both of which it has refused to join. Both the opposition parties as well as members of his own coalition criticized Oli for catapulting to Beijing's whims and fancies. The government did not lodge a protest against this claim even as they agreed that this was not discussed in the meeting. Now as the Gen Z population of Nepal have overtly made their stance against the entrenched elites of the country clear, and shown them to the exit doors, it is to be seen how Beijing and New Delhi would follow the pursuit of their ties. The consecutive changes in governments in the region, in Sri Lanka, Bangladesh and then Nepal through mass revolts does raise a lot of concern and uncertainty. In Nepal, it is still circumspect as to how the younger generation perceive China’s infrastructure investments, a lot of which have been marred by corruption allegations. Instances of interference in the country’s internal affairs, the pressure on Nepal to acquiesce to Beijing’s demands over the GSI and the GCI, something that China could get away with because of established norms can all be put to test now. Beijing’s ties with Nepal were to an extent predicated on the presence of a coterie of elites in power- in the absence of whom it will have to wait and see how to engage with the new power brokers. For New Delhi as well, there is an urgent need to introspect on these protests in its neighbourhood and take stock of the situation but also look towards developing a policy targeted at all stakeholders- as its experience with other countries shows. As India’s prompt response to the change in government signals, its emphasis should be on building a multi-faceted relationship based on trust and mutual respect with efforts to understand how this emerging generation of young leaders want the ties between the two countries to develop.