International Relations and Foreign Affairs

News Brief

Nepal’s government has intensified enforcement of its diplomatic code of conduct. The Shah government aims to regulate how officials engage with foreign diplomats. Earlier, PM Balendra Shah restricted meetings with foreign envoys, opting for a single joint meeting with 17 ambassadors and avoiding further individual engagements. The Ministry of Foreign Affairs conducted training for ministers and officials to ensure uniform adherence to diplomatic protocols. The revised enforcement expands oversight to meetings, communications, and correspondence involving diplomats across all levels of government.

US Assistant Secretary of State Samir Paul Kapur concluded a visit to Nepal, holding high-level meetings focused on expanding investment, trade, and technology cooperation. His visit emphasized strengthening Nepal’s investment climate and deepening ties in sectors such as ICT and policy reform. Shortly after, US President Donald Trump’s special envoy Sergio Gor arrived in Kathmandu for a high-level visit amid increasing diplomatic engagement. Gor sought a meeting with Prime Minister Balendra Shah, though the meeting had not been confirmed at the time of his arrival. 

Nepal objected to China’s construction of a safety wall along the Bhote Koshi River. The government asked China to immediately halt the project, citing concerns that it could alter the river’s course and cause damage on the Nepali side. The issue was first reported by local authorities in Sindhupalchowk and later escalated through the Home Ministry to the Ministry of Foreign Affairs. Officials stated that such construction without prior consultation may violate the 1963 boundary protocol between Nepal and China. 

Nepal decided to seek heavy-lift aircraft from the United States for the Nepal Army. The US offered six helicopters under a $100 million grant. The government plans to send a counter-proposal, arguing that heavy-lift “aerial crane” aircraft better match Nepal’s infrastructure and logistical needs in remote mountainous areas. Officials noted that the initially proposed helicopters were not a priority and would involve high maintenance, fuel, and training costs. 

MoFA announced plans to open ambassadorial appointments to public competition for the first time in its diplomatic history. The move aims to make the selection process more transparent and merit-based. The decision comes as Nepal faces numerous vacant ambassadorial positions and broader calls for reform in its diplomatic service. 

News Analysis

Kathmandu sees a new phase of geopolitical competition  

Kathmandu is experiencing a new wave of geopolitical competition. The recent events demonstrate that this competition goes beyond economics. It involves influence, boundaries, and diplomatic symbols. US Assistant Secretary Samir Paul Kapur’s visit focused on investment, trade, and technology. However, it also included a meeting with the Tibetan community and a request for improved support for Tibetan refugees, which made the trip politically sensitive in Kathmandu.

China responded quickly to protect its interests. During talks with Nepali officials, Chinese Ambassador Zhang Maoming urged Kathmandu to avoid Tibetan and Taiwanese activities. He raised concerns about the registration status of Tibetan refugees and warned against Nepali participation in the Tibetan leadership swearing-in ceremony in Dharamshala. Shortly after, a Chinese delegation met with Foreign Ministry officials and cautioned Nepal about US-linked initiatives like the MCC, the State Partnership Program, and Starlink.

India’s foreign secretary Vikram Misri is expected to visit Nepal in early May. His agenda will likely include discussions on bilateral relations, PM Balen Shah’s India visits, and Indian-funded projects. This means Kathmandu is being courted by all three major powers at once, each with its own priorities and expectations.

Nepal is once more becoming a battleground for strategic competition, rather than simply a recipient of aid and visits. This situation is reminiscent of earlier periods, such as 2018, when analysts observed that India and China were vying for influence due to Nepal’s left-wing political consolidation.

For the new government, the challenge is to navigate this attention without being drawn into a single agenda. It needs US investment, Chinese cooperation, and Indian goodwill, while also safeguarding its sovereignty. It must avoid framing Tibet as a bilateral dispute and coordinate foreign policy through the state instead of relying on sporadic political gestures. Striking this balance will be one of the government’s first major tests.

Domestic Politics and Federalism

News Brief 

The first session of the House of Representatives was held on 2nd April at the multipurpose hall of the under-construction Federal Parliament Building at Singha Durba. Chaired by the senior-most member of the house, Arjun Narsingha KC, the meeting quickly became heated. CPN-UML acting chairperson and parliamentary party leader Ram Bahadur Thapa (Badal) launched a sharp attack against the newly formed government, criticising the arrest of Oli and Lekhak and describing RSP’s electoral success as an illegal ‘color revolution.’ His remarks led to a controversy within his party, and an emergency secretariat meeting was called the next day.

Oli and Lekhak were released on bail following a Supreme Court order, but are required to be present before authorities when required. Meanwhile, authorities have issued arrest warrants for former PM Sher Bahadur Deuba and his wife, former foreign minister Arzu Deuba, in connection with the ongoing money-laundering investigation.

The Office of the Prime Minister and Council of Ministers published the property details of PM Shah and his ministers. Their assets, including land, cash, gold, investments, and vehicles, have drawn widespread public concern and criticism.

The order of the cabinet was reshuffled, just eleven days after the ministers were appointed. Minister for Labor, Employment, and Social Security Deepak Kumar Sah was dismissed by PM Shah. Meanwhile, Minister for Health and Population Nisha Mehta was issued a warning. Two new ministers were appointed, with Gauri Kumari Yadav taking charge as Minister for Industry and Ramji Yadav as Minister for Labor.

Home Minister Sudan Gurung resigned from his post, following reports of his links to businessman Deepak Bhatta, who is in custody for a money-laundering case. Gurung is reported to be a shareholder in a company where Bhatta is a partner, and is also associated with Star Micro Insurance Company Ltd alongside Bhatta and Sulav Agarwal of the Shankar Group, who is also under scrutiny in the ongoing money laundering case. Businessman Shekhar Golchha was taken into custody in connection with the same case. Following Gurung’s resignation, PM Shah has taken charge of the Home Ministry.

The Rastriya Swatantra Party appointed Kabindra Burlakoti as its Chief Whip and Prakash Chandra Pariyar and Krantishikha Dhital as whips. The party has decided to begin its district convention from April 28 and deploy proportional representation lawmakers to election constituencies, where the party does not have directly elected representatives.

The government unveiled an 18-point National Commitment based on the manifestos of six parties represented in parliament, and invited suggestions and feedback from political parties and stakeholders by April 23.

Dol Prasad (DP) Aryal of RSP was declared the unopposed speaker of the house.  He is the first non-Communist to hold the position in eighteen years. Ruby Kumari Thakur of the Shram Sanskriti Party was elected as the deputy speaker of the house, making her the youngest to hold the position at 25 years old. The HoR formed 10 thematic committees and 2 joint committees, and announced their chairs. The committees are responsible for evaluating the government’s performance and finalizing bills through detailed deliberations.

The three ordinances presented by former Home Minister Sudan Gurung, the Citizenship (First Amendment) Ordinance, 2082; the House of Representatives Member Election (First Amendment) Ordinance, 2082; and the Nepal Special Service (Third Amendment) Ordinance, 2082, were approved by the HoR. The government is also preparing drafts of 45 bills to be submitted to the federal parliament in the upcoming budget session. President Ram Chandra Poudel, on the recommendation of the Council of Ministers, has postponed the Federal Parliament session.

News Analysis

Early Challenges of the New Government

It has been a month since the Balendra Shah led government took office, and it has projected itself as energetic, assertive, and reform-oriented. While the government has moved quickly to signal intent and establish authority, the pace of its decisions raises questions about whether enough consideration is being given to how they will play out on the ground. Early steps such as dismissing ministers, issuing warnings, and accepting resignations indicate an effort to signal accountability and set ethical standards. However, these developments raise questions about how thoroughly ministers were vetted in the first place. Frequent changes in ministers create an impression of instability, especially when the election results had raised expectations of a more steady and predictable government.

The government’s push to remove politically affiliated student and employee unions from universities is another key challenge. While it reflects an attempt to depoliticize academic institutions, it also enters a highly sensitive and deeply entrenched space. Student organizations have opposed the move, calling it undemocratic and protesting. Nepal Sanskrit University Vice-Chancellor Professor Dr. Dhaneshwor Nepal reported receiving threats for following the directive. In this context, the government will need to manage the situation through dialogue and consultation with stakeholders.

The handling of squatter settlements has emerged as another test of the government’s capacity. The decision to begin clearance in areas such as Thapathali, Gairigaun, Sinamangal, and Manohara shows intent to address a long-standing issue. However, the implementation appears to be rushed. Displaced families have been moved to multiple temporary locations, and the proposed relocation to apartments in Nagarjun has raised concerns about living conditions and suitability for families. There is also uncertainty around whether residents will be granted ownership, which adds to the insecurity. These gaps in planning and implementation have drawn criticism and risk undermining the credibility of the initiative.

The government has imposed strict customs duties on goods worth more than Rs. 100 brought from Indian markets, with security personnel and customs officials stepping up checks at major crossings. This move has had a visible and immediate impact across several border points, with local residents expressing frustration at the added financial burden amid already rising prices. Tensions have increased, and protests have broken out in Birgung and Kathmandu. Janmat Party spokesperson Chandan Singh framed the policy as anti-Madhesh, the Nepali Congress has called on the government to withdraw its decision immediately, and some MPs of the RSP have also expressed their concerns about this move. The government must strive to balance its regulatory and revenue priorities with the socio-economic realities of its border citizens. Taken together, these developments point to a broader challenge of carrying out a reform-oriented agenda while carefully navigating politically and socially sensitive issues.

Economy and Development

News Brief

The war in the Middle East is having widespread impacts on multiple sectors of Nepal’s economy, with the most immediate effect seen in fuel prices. Nepal has increased its fuel price for the fifth time in 31 days. Now the price of diesel, fuel used for mass transportation, is more expensive than petrol. 

Rising fuel prices are driving up costs across sectors.  In trade, the freight price has increased by three times which can escalate the market prices up to fifty percent. In tourism, amid increased air fares, travel demand has decreased. Ticket booking has crashed sharply as both national and international travellers cancel or postpone trips. 

In agriculture, the increased fuel prices have raised the cost of farming. Fuel, especially diesel, is used widespreadly for powering generators, machinery and farm equipment.The increased cost of diesel has trickled down to the grassroots and has had an immediate impact on citizens. The rise in fuel prices, combined with fertilizer shortages and a weak monsoon, is creating a compound shock for the agriculture sector.  The middle east crisis is just not limited to fuels but also fertilizers. The fertilizer prices are expected to rise by 31 percent in 2026, driven by a 60 percent jump in urea prices.

Nepal’s steel industry is being severely affected by Indian safeguard duties. The imposition of import duties have sharply reduced export competitiveness and led to a massive decline in shipments. As exports to India have fallen by over 77 percent, the sector is facing significant revenue losses and a broader industrial slowdown. 

The government has opted for some strict measure on cross border trade. The strict imposition of custom duties on purchases above NRs. 100 has impacted the daily shoppers at Nepal-India border. The implications of the decision have generated widespread frustration and anger among borderland communities.

News Analysis 

Customs Crackdown at the Border: Revenue Recovery at What Cost ?  

The Middle East crisis and surge in fuel prices have exposed the vulnerability of Nepal’s economy, with impacts cascading from macroeconomic sectors to individual households. People are bound to pay high prices for daily consumption goods, due to the increased costs and black marketing. Although the government has removed taxes on petroleum products, the primary benefit has been the reduction of losses at the Nepal Oil Corporation without significantly benefiting the consumers.

In principle, cross-border purchases are subject to customs duties. It is a major source of revenue for the government and it also helps to protect national industries and manufacturers. However, cross-border small scale trade and currency diplomacy is one of the economic practices of Nepal’s borderland communities. Citizens from the southern border often visit the market on the other side of the border to acquire their daily consumption products, because of the price differences and product variability. But, the government seems to be inefficient in realising the ground reality.

The government's decision to enforce taxation on every cross-border purchase above NRS. 100, shows how the government is insensitive of the livelihood of its citizens. Videos surfaced on social media have shown the frustration and anger of the citizens. People are being interrogated and questioned for purchasing daily consumer goods like fruits, packaged foods,  edible oil etc.

Such measures, while intended to curb revenue leakage, risk producing counterproductive outcomes. Instead of strengthening fiscal stability, they are intensifying public discontent and disrupting long-standing socio-economic practices. Effective policy should balance revenue needs with ground realities, ensuring that enforcement does not disproportionately burden vulnerable communities or undermine local economic systems. 

Environment and Climate Change

News Brief

Kathmandu's AQI reached 247, placing it behind only Lahore on IQAir's global rankings. PM2.5 hit 161.7 µg/m³, over 32 times the WHO guideline. The Department of Environment cited dry conditions, forest fires, agricultural burning, and vehicular emissions. Nepal's Ministry of Health estimates air pollution causes around 42,000 deaths annually and shortens life expectancy by roughly 4 years.

An unstable serac in the Khumbu Icefall blocked the only viable route to Camp I, stranding 400+ permit holders at Base Camp. Aerial surveys and drone mapping found no safe alternative. On April 28, an unofficial Sherpa team established a path that Icefall Doctors then formalised, accepting residual risk to salvage the narrowing summit window.

ICIMOD's Snow Update Report 2026 found HKH snowpack 27.8% below the long-term average, the fourth straight year of decline. Ten of twelve major river basins are below normal. Snowmelt contributes up to 77.5% of annual runoff in some basins. ICIMOD warned of imminent water shortages for nearly 2 billion downstream people.

Fires swept 14 communities and blocked forests in Banke district over roughly a week. Prolonged drought drove fire into remote terrain, making containment difficult. A 14-person response team was deployed. Wildlife habitats across affected forests face severe damage. Three people were arrested for killing a spotted deer displaced by the fires.

Nepal's largest steel company stands accused of occupying over 25 bighas of Parsa National Park land and enclosing the Bhangre River within its perimeter, converting a wetland into an industrial wastewater site. Despite a complaint filed in February 2024, government departments such as the CIAA have only circulated the file without conducting any land measurement. 

News Analysis

The HKH Snowpack Crisis: From Regional Warning to National Risk

The recent ICIMOD Snow Update Report 2026 outlines a severe structural issue for Nepal. The Hindu Kush Himalaya snowpack currently shows a 27.8% deficit over four consecutive years. This ongoing decline is gradually transitioning from a temporary issue into a compounding system failure that directly impacts the country's water, energy, and agriculture sectors.

Nepal's economy is highly vulnerable to this shift. Over 90% of the country's electricity comes from hydropower, which relies heavily on dry-season river flows from melting snow. As these baseflows decrease, power generation drops. This directly threatens Nepal's long-term strategy of exporting clean energy to India. At the same time, the agricultural sector is facing a severe crisis. Farmers must now handle the ongoing snowpack deficit, a weak monsoon forecast, and a projected 31% increase in fertilizer prices all at once. This creates a significant squeeze on rural livelihoods and food production.

The regional geography creates a significant structural disadvantage for Nepal. While the country contributes minimally to the emissions affecting the Himalayan cryosphere, it acts as the primary buffer for a watershed that impacts nearly 2 billion downstream people. Currently, there is no binding governance framework to manage the shared resources of the Hindu Kush Himalaya region. Downstream nations, including India, Pakistan, and Bangladesh, possess greater negotiating power and lack any structural incentive to financially support upstream communities. Consequently, Nepal is forced to absorb the early and severe economic costs of climate degradation entirely on its own. This leaves the country highly exposed, severely straining domestic resources and long-term planning capabilities.

The pre-monsoon months of 2026 will serve as a critical indicator. If river levels do not recover and the monsoon underperforms, Nepal will face a difficult second half of the year. The combination of energy shortfalls and food price inflation presents a clear and immediate risk to national stability.

Gender, Social Inclusion and Human Rights 

News Brief

Sexual violence survivors of Nepal’s 10-year-long armed conflict organized a mass gathering and gave a 10-point declaration of demands for justice, to call to account, and reparations. Meanwhile, victims of the insurgency era called on a visiting UN special rapporteur not to sanction the ongoing process of transitional justice, as it risks giving impunity to those who committed the atrocities. 

Several national celebrations were observed in April across Nepal. People welcomed the Nepali New Year 2083 BS across the country. In the Terai, people observed Jur Sitla with rituals dedicated to the sun god and the preparation of traditional foods. In Bhaktapur, the Bisket Jatra was celebrated with large chariot processions and drew crowds from across Nepal. 

Shifting gender norms are becoming more visible in Nepal as women in Biratnagar form Naumati Baja groups despite long-standing cultural restrictions. Their participation reflects growing inclusion and challenges traditional gender and caste barriers. In another positive step, a new scholarship scheme has been introduced to support women’s access to higher education. The program provides financial assistance to women students from disadvantaged backgrounds, promoting greater educational equity.

A charge sheet has been filed against four suspects in the rape and murder case of 16-year-old Inisha BK in Surkhet. The District Government Attorney’s Office has charged all four with sexual assault and murder, citing the severity of the crime. 

According to the report by the Human Rights Watch, the progress of transgender rights in Nepal has become stagnant, as transgender people continue to be discriminated against in healthcare, employment, and documentation despite transgender people being legally recognized. In a similar report, Human Rights Watch urged the Balen government to implement human rights reforms on account of evictions and lack of accountability. 

News Analysis

New Government Must Deliver Caste and Gender Justice

Despite legal progress, there is a clear gap between what the law promises and what citizens, especially the marginalized communities, actually experience in Nepal. While the Supreme Court has scrapped discriminatory laws, and the ruling party issued a formal apology for the historic injustice to the Dalit community, discrimination and caste-based violence are rampant across the country. In Sindhuli, a Dalit man died in police custody, while in another case, an 11-year-old Dalit boy was brutally assaulted for simply entering a local resident’s house. Such incidents underscore a deeper reality of how marginalized communities continue to face discrimination and violence in their everyday lives.

The government’s decision to clear informal settlements has had serious consequences for vulnerable groups, particularly new mothers and children, who have been forced into temporary shelters with poor living conditions. This raises concerns about the lack of preparedness and the absence of gender-sensitive planning in relocation efforts. The situation reflects a broader failure to account for the specific needs of women and children in policy implementation. 

Moving forward, the new government must move beyond symbolic gestures and focus on what its citizens actually experience on the ground. It needs to prioritise accountability for caste-based violence, ensure that existing legal protections are meaningfully enforced, and integrate gender-sensitive approaches across all levels of policy and implementation. Most importantly, the government must work towards building inclusive systems that work for all.