International Relations and Foreign Affairs

News Brief

Former Chief Justice Sushila Karki has been appointed as the interim Prime Minister. After the September uprising, led by Nepali youths, ousted the former government, the parliament was dissolved, and the Karki Cabinet was tasked with holding elections in six months. Karki’s appointment has received support from the wider international community. India’s Prime Minister congratulated the newly appointed PM and vowed to continue India’s support to Nepal. China’s Foreign Ministry congratulated PM Karki, and the US conveyed its support as well. The interim government has also garnered support from Nepal’s development partners, including the UK, France, and the wider international community. Similarly, the Dalai Lama also extended his congratulations to the government. 

Following the September protests, Nepal’s traditional labor destinations, the UAE, Malaysia, Saudi Arabia, and South Korea, have tightened their visas for Nepalese. The government's crackdown on demonstrations led to prison breaks, with some 13,500 inmates escaping across 27 facilities. Migration officials say the visa restrictions are motivated by fear that fugitive inmates could flee abroad and participate in criminal activities. Meanwhile, Nepal’s Foreign Affairs Ministry has not received any formal notice about the visa changes and plans to summon ambassadors from the countries involved to seek clarification.

Nepal’s September 8–9 unrest highlighted a major national security failure. Despite clear warnings, the government did not prepare a coherent security plan, leaving critical areas unprotected. Security forces, weakened by decades of patronage and filled with hand-picked loyalists, were ill-equipped and untrained. They responded with excessive force in some areas while abandoning posts in others. The resulting looting of weapons, prison breaks, and uncontrolled violence showed how quickly order collapsed. Delayed army deployment and hollowed institutions displayed the Nepali state’s inability to safeguard national security during a crisis.

At the UN’s High-Level Solutions Dialogue in New York, Nepal called on the global community to triple adaptation finance and introduce innovative financial tools to help vulnerable nations address worsening climate impacts. Ambassador Lok Bahadur Thapa highlighted that despite Nepal’s negligible greenhouse gas emissions, the country is already suffering from melting glaciers, erratic monsoons, droughts, and frequent natural disasters. He pointed to Nepal’s ambitious NDC 3.0 commitments, including tripling renewable energy capacity, doubling clean energy use, and ensuring a just transition. Thapa further urged that at least USD 300 billion per year be mobilized under the new collective quantified goal, with half of all climate finance allocated to resilience efforts in the most vulnerable countries.

News Analysis

Nepal’s Custodial Foreign Policy in Times of Transition

When a government falls in the midst of a widespread protest, there could be an immediate foreign policy void. The interim government of Nepal, therefore, must prioritize urgent domestic issues, such as restoring order, holding free and fair elections, and responding to protesters' calls for accountability, while simultaneously managing its foreign policy direction. The way Kathmandu manages the transition will serve as a signal to its neighbors and partners, and remaining silent overseas will be interpreted as weakness. Hence, the current government must evaluate Nepal’s international image and recalibrate its diplomatic posture, balancing relations with India, China, neighbouring states, and the wider international community, while focusing on domestic stabilization. So far, the interim government has received measured support from international partners. However, Nepal’s foreign policy engagements are also inherently linked to the domestic demand for transparent, accountable, and open negotiations. Therefore, it is impossible to divorce Nepal's diplomatic practices from the country's citizens' larger desire for accountable and participatory governance. Nepal's allies must acknowledge this, and foreign engagements should follow suit. 

The interim authority is currently confronted with practical difficulties. First, when legitimacy and negotiation bandwidth are low, it is more difficult to maintain a balanced relationship with Nepal’s immediate neighbors. Second, there is an urgent need for labor and remittance diplomacy. Visa requirements have already been tightened in a number of destination nations. Nepalis' access to Malaysia, Qatar, Saudi Arabia, and South Korea has been restricted, and the UAE has essentially stopped granting them visitation and work visas. These actions necessitate quick labor diplomacy because they jeopardize household incomes and remittance flows, which constitute 33% of Nepal’s GDP. Third, Nepal's partners will assess the interim authority's capacity to maintain rule-of-law principles, conduct credible investigations into violence, and refrain from securitizing dissent. There will be diplomatic repercussions from the domestic justice procedures.

The interim government will put the domestic situation ahead of any drastic strategic changes. The external partners should anticipate the same. Restoring law and order and a clear election schedule, conducting an open investigation into the crisis, safeguarding migrant worker remittance corridors, and maintaining the technical capacity to participate in development negotiations are likely to be the top priorities for the current authority. Partners can provide high-value assistance right away through election monitoring, technical election assistance, and short-term liquidity support.

The interim government in Nepal is tasked with maintaining order rather than bringing about radical changes to the country's foreign policy. Protecting economic lifelines, stabilizing the domestic situation, and assuring allies through consistent, rule-based diplomacy are the top priorities. Kathmandu can maintain its credibility until an elected government takes power by acting with moderation, consistency, and openness both at home and abroad. Success during this transitional period will be determined by the government's capacity to uphold stability, protect Nepal's reputation, and keep the confidence of its neighbors and international allies rather than by geopolitical scheming.

Domestic Politics and Federalism

News Brief

On September 8th, thousands of Nepalese youth took to the streets of Kathmandu and other cities in what popularly came to be known as the “Gen-Z Protests.” The government had introduced new regulations under the ‘Directives for Managing the Use of Social Networks, 2023’, which required social media platforms operating in Nepal to register with the Ministry of Communication and Information Technology. Amid this backdrop, the ‘Nepo Baby’ trend gained momentum. Social media users began exposing the extravagant lifestyles of politicians’ children in contrast to the everyday struggles of ordinary citizens.

When companies failed to register within the 7-day deadline, the government issued a directive to block the apps that had not complied. The ban was met with outrage, particularly among the youth, who relied heavily on these platforms for education, networking, activism, entertainment, and livelihood. However, the ban merely acted as a catalyst for broader pent-up frustrations over years of rampant corruption and government mismanagement.  A group of young activists formed a Discord server called ‘Youth Against Corruption.’ 

On September 8th, the protestors assembled peacefully at Maitighar Mandala. However, as some protesters, alleged infiltrators, pushed past barricades and marched towards the Parliament gates, the situation quickly spiraled out of control. The police responded with tear gas, water cannons, rubber bullets, and eventually live ammunition. At least 19 protesters were shot and nearly 300 were injured. The government then lifted the social media ban, Home Minister Ramesh Lekhak resigned, and a curfew was imposed in Kathmandu and other areas.

However, violence continued on September 9th. Protestors enraged with the killings of innocent youth, torched, vandalized, and looted the private residences of politicians, party offices, ministry quarters, and government buildings, including Singha Durbar, the Parliament building, and the Supreme Court. Business establishments, seen as connected to political parties, were targeted. Media houses, including the Kantipur Media Group, Annapurna Post, and Thahakhabar were also targeted. By the afternoon, Prime Minister Oli announced his resignation. While his resignation was met with cheers, it did little to defuse the situation.

Army Chief Ashok Raj Sigdel addressed the nation at night, announcing army deployment to restore order by 10 p.m. He declared a nationwide curfew and appealed to citizens and protesters for a calm dialogue. Similarly, President Poudel also appealed to Gen Z to remain calm and come to the negotiating table. Army Chief held dialogues with Gen-Z representatives and later facilitated a dialogue between the youth and the President.

After rounds of discussions and voting on Discord, former Chief Justice Sushila Karki was appointed the interim PM on September 12th.  While the interim government’s primary mandate is to hold elections by March 5th, 2025, it has a lot to deliver in the coming six months. PM Karki has expanded her interim Cabinet, which currently comprises nine ministers. Since assuming office, Karki has made the decision to provide relief to the protest victims, declare those killed in the movement as martyrs, and provide the families Rs. 1 million as immediate relief. The government has also unveiled a wide-ranging economic relief and austerity package. President Poudel has issued an ordinance amending the Voter List Act, 2073, allowing new voter registration for the upcoming elections.

News Analysis

How the State Failed Its People

The protests and the aftermath revealed the glaring failures of the state. While the scale and speed of events caught many off guard, the government was not entirely blindsided. It had intelligence on public frustration and knew demonstrations were being planned. However, it underestimated the urgency of the people’s anger and went in without a security plan. The Home Ministry and Kathmandu administration failed to prepare a coherent strategy. Critical intersections lacked barricades, defenses were minimal, and security forces didn’t have proper training for crowd management. Instead, they resorted to excessive force, including the unlawful use of live ammunition. In fact, on the morning of September 8th, senior security chiefs were preoccupied with a parliamentary discussion on the police bill rather than overseeing the escalating crisis. The Home Minister convened the Central Security Committee only after dozens had already been killed. By then, the government’s violent crackdown had changed the trajectory of the protests and stripped away the last shred of its legitimacy.

The following day, as vandalism, looting, and arson continued, the state’s paralysis only deepened. Security forces abandoned their posts, leaving prisons unguarded and allowing thousands of inmates to escape in Kathmandu and other cities. Amid this breakdown, President Ram Chandra Poudel’s silence was deafening. He did not address the public until much later. The Army was also mobilized far too late. Army Chief Ashok Raj Sigdel only addressed the nation at night, announcing army deployment to restore order by 10 p.m. The power vacuum between these hours further eroded public confidence in the state.

The crisis Nepal faced on September 8th and 9th laid bare deeper structural weaknesses. Nepali institutions were hollowed out by decades of patronage politics. Political leaders prioritized loyalty and personal networks over merit, systematically eroding the capacity and professionalism of the bureaucracy, police, and administrative organs. This left institutions unprepared and incapable of responding when the crisis came. The instruments tasked with upholding order lacked competence, discipline, or autonomy to act effectively during the national emergency. Police, prisons, and administration failed to act when people needed them most. What should have been a contained protest spiraled into systemic collapse.

Economy and Development

News Brief

The September protests have inflicted a catastrophic economic blow, with high-end estimates placing total collateral damage at nearly Rs 3 trillion ($22.5 billion). In response to the widespread destruction and paralysis of government, economists have revised their annual GDP growth forecasts, projecting a collapse from a pre-crisis 4.6% to below 1% for the current fiscal year.

The interim government has launched a sweeping austerity program aimed at freeing up Rs 100-120 billion for reconstruction and snap elections scheduled for March 2026. Measures include the immediate halt of over 1,300 politically motivated "pork-barrel" projects and drastic cuts to recurrent expenditures. A national "Let Us Build Our Structures Ourselves" campaign has been initiated to channel domestic and diaspora contributions into a new Reconstruction Fund.

In a severe blow to Nepal's economy, the United Arab Emirates, Malaysia, Saudi Arabia, and Qatar have suspended or restricted new work visas for Nepali nationals, citing security concerns following the unrest and mass prison breaks. The move represents an alarming international "vote of no confidence," threatening the remittance flows that account for over a quarter of Nepal's GDP. South Korea has also suspended its E-7 skilled worker visa program.

The industry faces its largest event in history, with claims from arson and vandalism surpassing Rs 22.25 billion ($167.3 million) and rising. This figure already exceeds the total claims from the 2015 earthquake and represents more than half of the entire non-life insurance sector's annual premium collection, posing a systemic risk to the financial system.

The crisis struck at the start of the critical autumn tourist season, causing an immediate 58% drop in average daily tourist arrivals. With mass cancellations reported across the country and the destruction of landmark hotels, the sector, which contributes nearly 8% to GDP, faces billions in losses and thousands of immediate job cuts.

In a stark contrast to the physical destruction, Nepal's national data centers remained secure and operational, preventing a total administrative collapse and preserving the state's digital core. The banking system also showed resilience, with deposits reaching a record Rs 7.323 trillion (120% of GDP), providing a crucial liquidity buffer for the economy.

News Analysis

The Twin Crises: Rebuilding Nepal's Economy on Shaky Ground

The September 2025 "Gen-Z Uprising" has plunged Nepal into a dual crisis that is testing its economic foundation like never before. The challenge is not simply one of reconstruction but of survival, fought on two interconnected fronts. The first is an internal crisis of confidence, defined by the smoldering ruins of the state's physical infrastructure and a financial system teetering on the brink of contagion. The second is an external crisis of reputation, as Nepal's domestic instability is now viewed as an international security risk, threatening to sever the remittance lifeline that has sustained the nation for decades.

The internal crisis is starkly visible in the balance sheets. The physical destruction of government and private property represents a shock of historic proportions. But the most immediate danger lies hidden within the financial system. The unprecedented wave of insurance claims—exceeding $167 million—poses an existential threat to the insurance sector. This is not an isolated problem. As insurers face a liquidity crunch, they may be forced to liquidate their holdings of government bonds and bank deposits, sending shockwaves through the entire financial system. This creates a severe contagion risk: businesses that cannot get timely insurance payouts will be unable to rebuild or service their loans, leading to a cascade of defaults that could cripple the banking sector. The interim government's austerity measures are a necessary first step to signal fiscal discipline, but they cannot solve this looming financial emergency.

Even more perilous is the external crisis, where the ground has fundamentally shifted. The suspension of new work visas by the UAE and other Gulf states is a catastrophic development. For the first time, Nepal's domestic turmoil is being treated as a "contagion of caution" by host nations, transforming a political problem into a geopolitical threat to the nation's economic survival. With over a quarter of GDP dependent on remittances, this action threatens to choke off the flow of new migrant workers, creating a delayed but devastating economic time bomb. While current remittance flows may continue, the pipeline is being cut, which could trigger a balance of payments crisis within the next year.

These two fronts are locked in a vicious feedback loop. Domestic instability spooks foreign partners. Their reaction—the visa bans—weakens the economy by threatening the primary source of household income and foreign currency. A weaker economy, in turn, can fuel the very grievances of unemployment and lack of opportunity that ignited the protests in the first place. The interim government's challenge is to break this cycle. Success requires a two-front war: domestically, it must urgently backstop the insurance sector to prevent a financial collapse and pursue a transparent reconstruction to rebuild public trust. Internationally, it must launch a high-level diplomatic offensive to provide security assurances and protect its foreign employment channels. The crisis has created a tragic but unique "Year Zero" opportunity to address the deep structural flaws of the economy, but only if the immediate, twin crises of confidence and reputation can be overcome.

Environment and Climate Change

News Brief

World climate change congress kicked off in Kathmandu. Policymakers, scientists, and activists gathered in Nepal’s capital to discuss Himalayan vulnerabilities, adaptation strategies, and the role of mountain nations in global climate talks. 

Experts urged Nepal to move beyond pledges and put its National Adaptation Plan and carbon neutrality commitments into real implementation ahead of COP-30, turning climate policy into action.  

UN Women’s initiative for Feminist Climate Justice in Nepal. A regional initiative launched in Kathmandu highlighted how women bear the brunt of climate change and called for gender-responsive policies in adaptation and finance.

Continuous rainfall triggered slides along the Muglin–Narayangadh road and at Tuin Khola, halting traffic and cutting off supply chains to central and eastern Nepal, disrupting the major roads yet again.

UNDRR spotlighted Nepal’s community-led disaster preparedness initiatives, showing how local resilience can complement global climate diplomacy. 

Opinion writers stressed that Nepal cannot tackle climate disasters alone, urging stronger South Asian solidarity on climate change before COP-30. Despite increasing awareness, Nepal and other vulnerable countries face deep inequities in climate finance, especially in loss-and-damage reparations.

News Analysis

Nepal's Call for Climate Justice at COP-30: A Fight for Dignity and Survival

The recent climate debates in Kathmandu, including the World Climate Change Congress, have sharply highlighted a critical fault line in global climate politics: Justice. For Nepal, a nation tussling with the immediate and devastating impacts of climate change, this isn't an abstract concept but a matter of survival, visible in everyday realities like monsoon landslides, washed-away highways, and displaced families.

Nepal, a minimal contributor to global emissions, bears a disproportionate burden of the climate crisis. The recurring destruction of vital infrastructure and agricultural land underscores an urgent need for adaptation, which for Nepal, is not optional but existential. Yet, climate finance remains slow, insufficient, and weighted with conditions, forcing the nation to "seek" for funds to address a crisis it largely did not create. This dynamic fundamentally highlights the injustice at the heart of current global climate mechanisms.

As COP-30 approaches, Nepal's mission is to proactively reshape the narrative. The nation aims to transition from being a passive recipient of aid to a leading voice advocating for a new paradigm of climate justice. This involves pressing for a financing model that prioritizes vulnerability, rather than GDP, as the primary metric for support. It also means ensuring that women, farmers, and frontline communities are central to decision-making and benefit directly from climate initiatives. For Nepal, the pursuit of climate justice at COP-30 is not merely a diplomatic stance; it is a fundamental fight for dignity, fairness, and the very survival of its people. 

Gender, Social Inclusion & Human Rights

News Brief

In a historic move, Sushila Karki, Nepal's former Chief Justice, has been appointed as the country's first female interim Prime Minister following the Gen Z protest that led to the resignation of PM K.P. Sharma Oli. Her appointment, announced on September 12, 2025, aims to restore stability and address the grievances of the youth-led movement. 

Save the Children Nepal, in collaboration with 13 child rights organizations, presented a rapid assessment report to the National Human Rights Commission (NHRC) highlighting significant violations of children's rights during the recent Gen Z protests. The report calls for immediate government accountability, cessation of unwarranted force, mental health support, and the initiation of an independent inquiry into the protest violence.

In response to the deadly Gen Z protests that led to at least 74 people killed, the newly formed government has established a three-member judicial inquiry commission to investigate the excessive use of force by security agencies. Former judge Gauri Bahadur Karki leads the commission, which includes former Assistant Inspector General of Police Bigyan Raj Sharma and legal expert Bishweshwor Prasad Bhandari. The commission has been given three months to submit its findings to the government.

Nepal's interim Prime Minister Sushila Karki has appointed a total of nine ministers to her cabinet, including four new appointments on September 22. Despite her historic role as the first female prime minister, the cabinet remains exclusively male, raising concerns about gender inclusivity. 

News Analysis

Lack of Inclusivity in the Interim Cabinet

The newly formed interim cabinet under the leadership of the interim prime minister Sushila Karki  reveals significant challenges rooted in its lack of inclusivity and representation. Despite being an interim government, its composition excludes a single women leader, which highlights the persistence of entrenched hierarchies and prejudices within Nepal’s politics. The sidelining of capable professionals such as Dr.Sangita Mishra reflects how old networks, prejudice, and nationalist narratives continue to outweigh fairness, ability, and democratic principles in state affairs.

Such a formation weakens the spirit of inclusive democracy and sends the message that Nepal’s governance is still defined by exclusivity rather than broad representation. A cabinet should ideally mirror the social and cultural diversity of the country, but the dominance of high-caste men underscores the persistence of systemic inequalities. It also overlooks an opportunity to heal historical grievances and to reassure citizens, particularly marginalized groups, that the state is committed to fairness and reform.

By concentrating authority within a limited group, this interim cabinet repeats long-standing patterns of exclusion. A more inclusive and representative arrangement would have built confidence, strengthened transparency, and signaled a genuine break from past practices of discrimination.