On the diplomatic front, the flurry of high-level foreign visits and engagements indicate that Nepal has once again found itself amidst heightened geopolitical activity. While Foreign Minister and State Councilor Wang Yi’s visit after the ratification of the MCC compact was more symbolic in nature, there was little headway on BRI. Prime Minister Deuba’s visit to India right after the departure of Chinese Foreign Minister Wang Yi was his first foreign trip after assuming office in 2021. The visit was seen as an attempt to reset ties, regain Indian confidence, and reduce the trust deficit between the two countries by addressing Indian concerns and priorities. Bishnu Puskar Shrestha was nominated as Nepal’s ambassador for China making his nomination notable for reasons because he is primarily a teacher by profession along with being a human rights activist and conflict victim of the decade-long Maoist insurgency without a background in diplomacy. Nepal’s current foreign policy behaviour also demonstrates a tilt towards the United States and India and away from China. Nepal hosted a US Congressional delegation of four, led by Senator Kirsten Gillibrand who arrived for a four-day visit. The visit comes at a time when Nepal and the United States are celebrating 75 years of friendship.

Timeline of Major Events

Nepal-China

The Chinese Foreign Minister, Wangi Yi’s visit in late March demonstrated that despite differences over issues such as the ratification of MCC, border row in Humla, and BRI, China wants to continue engaging Nepal. For instance, in a recent interview with Global Times, the Chinese Ambassador to Nepal, Hou Yanqi stated that “Nepal should become a demonstration garden for friendly cooperation among countries, not a fighting ring for geopolitical games”. Thus, it is likely that traditional Chinese assistance through aid and cooperation on construction and military support will continue upon the agreed frameworks.

Although Nepal featured heavily in China’s ambitious Belt and Road Initiative in South Asia, there has been little headway on the project. The Chinese Foreign Minister’s visit to Nepal in late March sparked debated deliberations over whether it would move forward. However, further developments on BRI seem less likely as commercial loan based development projects seem unaffordable given Nepal’s economic priorities. Furthermore, in a press conference, the Chinese ambassador to Nepal, Lou Hanqi, clearly stated that BRI was a loan based project and would not be possible under frameworks of traditional assistance or aid while sharing her views on the bilateral cooperation between the two nations. When asked about the construction of the cross border railway, she said that the project is geologically complex, therefore China and Nepal need to come to agreement on the technical and financing aspects, mentioning that a feasibility study alone for a project of that scale would take upto 6 years. She also reiterated the “Three Supports” statement released by the Chinese Foreign Ministry after Foreign Secretary Wang Yi’s visit to Nepal. While China has time and again asserted that it supports Nepal in its path to economic development, bilateral initiatives and projects have failed to pick up pace including BRI.

Appointment of New Ambassador to China

The government of Nepal recommended a list of ambassadors for 20 countries on April 8 after a long hold up. Shankar Sharma and Sridhar Khatri were recommended as ambassadors to India, the United States respectively on October 28 2021, without a nomination for China because of the lack of consensus over the candidates among the ruling parties. This makes the recent appointment of Bishnu Puskar Shrestha notable for various reasons. Shrestha is a human rights activist and conflict victim of the decade-long Maoist insurgency, without a background in diplomacy. Therefore, his appointment as the ambassador to China, a country often in headlines for its alleged human rights violations, seems odd if not an uninformed foreign policy choice. A Wechat media page also noted that the appointment of the new Nepali ambassador to China is unprecedented in Nepali politics and describes him as an “ordinary person who is relatively unfamiliar in foreign affairs and relations with China”.

Nepal-India

Prime Minister Deuba’s visit to India right after the departure of Chinese Foreign Minister Wang Yi was his first foreign trip after assuming office in 2021. The visit was seen as an attempt to reset ties and regain Indian confidence which had been shaky since the border row at Kalapani in 2020. It was marked by the signing of traditional agreements and inaugurations and was also described by analysts as a “major breakthrough in Nepal-India relations”. Prime Minister Deuba and his Indian counterpart, Narendra Modi discussed bilateral cooperation on energy trade, hydropower development, and connectivity.

According to reports, both Prime Minister’s also agreed to resolve the long outstanding border dispute over Kalapani, Lipulekh, and Limpiaduria areas through bilateral dialogue. The Foreign Secretary of India Harsh Vardhan Shringla further stressed the importance and effectiveness of diplomatic dialogue, citing that the border dispute between Bangladesh and India was successfully resolved through bilateral dialogue. He also urged that the border row not be politicized. The comment was possibly in reference to Nepal’s upcoming elections wherein such issues become a part of a politician or party’s agenda and border related disputes tend to flare up.

The most notable development between the two countries was the finalization of a vision statement to strengthen cooperation on the joint development of power generation projects in Nepal for mutually beneficial cooperation on hydroelectricity generation, transmission and cross-border trade. Kul Man Ghising, the Managing Director of Nepal Electricity Authority noted that India’s positive attitude towards energy cooperation and trade with Nepal is “an important milestone for Nepal’s power sector development”. This is a departure from India’s previous reluctant position on the matter as it is now openly endorsing the prospect of bilateral and multilateral cooperation on energy trade. Furthermore, Nasrul Hamid, state minister for power, energy and mineral resources of the Bangladeshi government also remarked that Bangladesh can import surplus electricity from Nepal during the summer and monsoon seasons and both of them will benefit if they take electricity from Bangladesh when Nepal’s power generation decreases in the winter season”. Such developments are a positive step towards the revitalization of regional and sub-regional frameworks such as BBIN and BIMSTEC, important for Nepal to expand power trade beyond India and invite foreign investment in hydropower projects in Nepal.

Certain aspects of the trip were more symbolic in nature. For instance, Prime Minister Deuba and his wife Arju Deuba visited Banaras and offered prayers at the Kaal Bhairav and Kashi Vishwanath Temples. Arju Deuba remarked on the cultural oneness between India and Nepal. Prior to the visit to Banaras, Prime Minister Deuba and Mrs. Arju Rana Deuba had visited the headquarters of Bharatiya Janata Party (BJP), the very day they landed in Delhi. This marked the first time a Nepali politician and sitting Prime Minister has visited a political party office in India. Although Deuba has long been viewed as being close to New Delhi, it was associated with the linkages to the Indian National Congress (INC). Therefore, the visit to BJP headquarters appears all the more notable. Overall, Prime Minister Deuba demonstrated earnest efforts to reduce the trust deficit between the two countries and regain Indian confidence by addressing Indian concerns and priorities.

Nepal-US:

A US Congressional delegation of four, led by Senator Kirsten Gillibrand arrived in Nepal on 22 April for a four day visit. The American delegation’s visit came a month after the Foreign Secretary of China, Wang Yi’s three-day visit to Nepal in late March followed by Prime Minister Sher Bahadur Deuba’s visit to India in early April. While the Senators held talks with Prime Minister Deuba in Baluwatar, they also met with KP Sharma Oli, former Prime Minister and chair of the main opposition, CPN-UML and also called on Pushpa Kamal Dahal, former Prime Minister and chair of Maoist Centre.

The formal visit to Nepal was to cover a wide range of agendas such as bilateral cooperation and economic development, traditional aid and assistance, Tibetan refugees, and climate change. The Senators thanked Nepal for the ratification of the highly politicized MCC compact. Since the visit was also a part of the delegation’s international tour in show of solidarity for Ukraine, the US lawmakers thanked Nepal for voting in favor of Ukraine in the United Nations General Assembly.

Nepal will be hosting the Under Secretary for Civilian Security, Democracy, and Human Rights Uzra Zeya who is currently serving as the United States Special Coordinator for Tibetan Issues. She set to arrive right in Kathmandu before the local elections on May 13. Her visit comes at a time where United States has been exerting pressure to provide identity cards to Tibetan refugees living in Nepal. However, Nepal has been treating the Tibetan issue with caution. Nepal acknowledges that Tibet is China’s internal matter which makes it a geopolitically sensitive issue for Nepal. Thus, issuing refugee cards could result in major repercussions for Nepal and its bilateral ties with China.

The flurry of high level foreign visits and engagements indicates that the tumultuous US-Nepal relationship before the ratification of the compact has been thawing. This is also a good opportunity for Nepal to capitalize on the United States’ increasing geopolitical interests and engagements towards fulfillment of Nepal’s national interests, pursuit of economic advancement and infrastructure development.

Nepal has once again found itself amidst heightened geopolitical activity with various powers trying to find an equilibrium. While the ratification of MCC and the Prime Minister’s visit to India at its heels demonstrates Nepal’s tilt towards the United States and India, it does not necessarily mean it has fallen out of favor with China because China has shown consistent efforts to continue engaging Nepal despite setbacks. Nepal must avoid mistakes of the past and respond in a way that it can capitalize off of great power interest. This is as an opportunity to formulate a synthesized, consistent and balanced foreign policy that best serves Nepal’s national interests and development goals with consensus among all political parties.