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Nepal is reimagining its relationship with China. What this means for India

Observers in Kathmandu suggest that for Nepal, the central question should not be whether India approves or disapproves, but whether such projects are beneficial to its development.

Nepal’s Foreign Minister, Shishir Khanal, paid a four-day visit to China from 14–17 June, marking the highest-level Nepali visit to China since the formation of the new government under the leadership of Prime Minister Balendra Shah. His agenda included meetings with his Chinese counterpart, Wang Yi, and with Wang Huning, Chairman of the National Committee of the Chinese People’s Political Consultative Conference.

While Nepal’s ties with China have historically been shaped by religious and cultural links through Tibet, the economic relationship has become increasingly important. The bilateral trade between the two countries stood at $ 2.16 billion in 2024, with Nepal’s exports to China at a very meagre $10 million, resulting in a trade deficit of $2 billion. Beijing’s highest-value exports include electrical and electronic equipment. China has also promoted people-to-people connectivity, with Chinese tourist arrivals rising steadily in recent years.

In Nepal’s foreign policy calculus, China is seen as a valuable development partner. Governments over the past decade have tried to frame ties with Beijing as an independent bilateral relationship rather than as leverage against India, but with limited success.

For instance, the Communist regimes in Nepal, especially under the leadership of former Prime Minister KP Sharma Oli, made the China card a prominent driver of Nepal’s regional foreign policy. Political instability and short-term policymaking often turned ties with China into a vehicle for nationalist politics. Under Prime Minister Balendra Shah, that approach may be changing.

In its first 100 days in office, the Rastriya Swatantra Party (RSP)-led government under the leadership of Balen Shah has guided Nepal’s foreign policy with planning, patience, partnership, and progress. Recent engagements between India and Nepal exhibit all of these. Kathmandu would like to bring the same energy with China.

Also read: Rabi Lamichhane’s high-profile Delhi visit shows Nepal’s two-layer India policy

For many in Nepal, Foreign Minister Khanal’s visit to China is a product of meticulous planning—something the past government always struggled with. Previous Prime Ministers often made hasty visits to either China or India, indicating what was a priority for a landlocked country. This time, however, it is the RSP leadership and the foreign minister who have laid the ground for major diplomatic exchanges with the two neighbours, before the Prime Minister makes his first foreign visit.

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