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Nepal in the Geopolitical Whirlpool

Dr. Bishnu Raj Upreti

On the map of global politics, although Nepal is a relatively small country geographically, it stands at a major crossroad of geopolitical, geostrategic, and geo-economic complexities. Nestled in the lap of the Himalayas, this beautiful nation today stands at the forefront of Asia’s most complex balance-of-power dynamics.

The strategic interests of China, India, and the competing soft/hard powers of the United States and Europe run deep in Nepal. However, Nepal’s current situation is by no means accidental. The rapid shifts in the global order—alongside China’s position at the forefront, India’s ambitions for regional leadership, the expanded Indo-Pacific Strategy amidst intense US-China competition, fluctuations and rapid restructuring in global supply chains, and new equations in energy security—do not merely exert direct and indirect influences on Nepal. The probability of Nepal’s political and economic future being thrown into complete uncertainty is growing rapidly.

Currently, a fundamental and sensitive question arises: Does Nepal’s present capacity, style, and commitment enable it to transform its geography into an opportunity, or will the current domestic political instability turn Nepal into merely a battleground and playground for superpower competition? The future of our country hinges on the answer to this very question.

Historically, Nepal was described or understood as a "buffer state"—a protective zone between two major powers. Although Nepal managed to evade colonial subjection by maintaining a cautious neutrality between British-ruled India and Tibetan-Chinese influence, today it faces unimaginable challenges. In the 21st century, the concept of a buffer state has grown obsolete. Modern infrastructure, technology, digital networks, and globalization have shattered archaic borders. Therefore, Nepal now has opportunities to become a "bridge" rather than a "buffer." However, this requires a fundamental transformation in the mindset, working style, and behavior of current rulers and political parties.

If the right policies are adopted, Nepal can serve as a bridge for trade, energy, and mutual benefit among Nepal, China, and India. Conversely, if we fail to adopt the correct policies, our very geography could become a flashpoint for power-state pressure and competition. Therefore, it is imperative for our rulers to act with extreme sensitivity, prudence, and balance in steering our foreign relations forward.

The biggest reason our geography is becoming a target for power-state pressure and competition—both globally and regionally—is the perennial weakness observed in domestic politics. As Nepal's strategic importance increases, its internal political condition appears extremely fragile, irresponsible, and self-centered. This contradiction constitutes Nepal's greatest risk. Over the past decade, our country has experienced frequent, unnatural changes of government, with national interests often being compromised for short-term political ends. Because coalition governments change constantly, policy continuity is lacking, and the bureaucracy has proven uncooperative. Furthermore, mounting intra-leadership factionalism and mudslinging have rendered state policies ineffective.

This persistent weakness in domestic politics has birthed three major issues:

1. Uncertainty in economic policy: Investors seek long-term stability, but priorities shift every time the government changes in Nepal.
   
   
2. Administrative paralysis: Our bureaucracy is a primary driver in deteriorating state-citizen relations. The general perception is that officials will not make decisions unless they see direct or indirect personal gain, will not solve ordinary citizens' problems without bribes, and intentionally delay development projects. Consequently, citizens have grown frustrated, ultimately becoming anti-government and anti-party.
   
   
3. Erosion of public trust due to extremely weak service delivery: Public sentiment has increasingly shifted against democracy itself.
   
   

Driven by a lack of employment opportunities or sheer frustration with governance styles, millions of Nepali youth are migrating abroad. Although their remittances form a massive chunk of the national economy, this provides only short-term relief and is not a viable alternative for long-term development. Unless sufficient employment opportunities are created domestically, youth migration will persist. Creating those opportunities requires strengthening domestic institutions, ensuring the rule of law, and controlling corruption. If the current style of governance continues without establishing good governance, Nepal runs a high risk of being caught in the vortex of external power interests.

Nepal’s current governance status and geographic location serve as the primary triggers for geostrategic interest among major powers. In this context, Nepal has repeatedly suffered due to open borders with India, unequal power relations, and India's strategic interests. The relationship between Nepal and India is unique. Despite open borders, familial ties, shared culture, and labor mobility binding the two nations closely, Nepal has been repeatedly troubled by India's stubborn mindset and insistence that Nepal align with its strategic interests.

India views Nepal through the lens of its northern security perimeter, holding an implicit belief that the Himalayas should serve as its natural security wall. India perceives growing influence from China and Western powers in Nepal as a direct security and strategic challenge to itself. Economically, Nepal remains heavily dependent on India; most of Nepal's trade passes through India, which supplies its oil, food, medicine, and raw materials. This reliance forms a core driver of Indian influence.

Furthermore, India treats Nepal's water resources as a component of its own energy security. When Nepal attempts to develop hydroelectricity through other nations, India erects various obstacles. Whether by stoking border disputes, imposing blockades, changing governments, or playing indirect roles in splitting political parties, India seeks to keep Nepal under its control. When pushback emerges from within Nepal, India becomes even more assertive. Why has India been unable to maintain harmonious relations with its neighbors? Why do good neighbors like Bangladesh, Nepal, Sri Lanka, and the Maldives end up wary of India? India does not appear to conduct an objective review of these questions, opting instead for power-centric behavior.

In recent decades, China appears to have prioritized Nepal, yet its role in strategic matters remains equally self-centered. Evidence of this was seen when China signed a trade border agreement with India using the Lipulekh pass in Nepal without addressing Nepal's concerns. China knowingly ignored Nepal's voice on this matter, even though Nepal had alerted China after India encroached upon Nepali territory (Limpiyadhura, Lipulekh, and Kalapani). The tri-junction border point between Nepal, India, and China remains unresolved, yet China remains silent and takes no initiative. Despite this, China appears positive about connecting Nepal to its Trans-Himalayan Multi-Dimensional Connectivity Network under the Belt and Road Initiative (BRI). Successfully implementing this would expand connectivity; Chinese investments in infrastructure like roads, railways, and airports hold long-term strategic value that Nepal must leverage in its own interest.

In Nepal's context, China appears to have four main concerns:

1. Economic access to South Asia.
   
   
2. Balancing Indian influence in Nepal.
   
   
3. Security and stability related to Tibet.
   
   
4. Countering anti-China activities by Western powers operating within Nepal.
   
   

The United States remains active in Nepal through energy infrastructure, governance reforms, transparency, institutional capacity building, and security sector engagements. Nepal is linked to American strategic interests encompassing China and South Asia. Recent US activities in Nepal have focused on these strategic objectives. Lately, the US aims to leverage Nepal's geographical position to strategically balance the growing influence of India and China, driving its active engagement.

Nepal's true power lies in its geo-economic potential. Hydropower, tourism, agriculture, transit trade, mining, and natural resources form the foundation of its geo-economic development. If Nepal becomes an exporting country, it can secure sustainable revenue and strategic advantages. Transforming into a transit hub would allow Nepal to serve as a bridge between two giant markets. However, this potential can only be realized through stable governance, transparency, good governance, and policy continuity.

Various global powers appear to promote populism in Nepal to further their strategic advantages. Populism is a style that frames society as a conflict between "ordinary people" and the "ruling elite," seeking to turn public discontent, emotional expectations, and insecurity into political capital. Populist leaders claim to be the sole representatives of the people, seeking popularity through simple slogans, demagogic language, and promises of immediate benefits. However, these tactics carry a high risk of undermining long-term national policy, institutional stability, and evidence-based decision-making.

When external strategic interests mix with public discontent, populism takes root in politics. Populist forces (new political entities) emerge by fueling distrust toward established parties, positioning themselves as champions of change, and leveraging social media to challenge traditional parties. Yet, lacking institutional structure, experience, and realistic commitments, these sudden arrivals often fail to resolve core issues. Their mindsets clash with state mechanisms, and resources prove insufficient. Because they rely heavily on individual leadership and weaken existing institutions, they fall into a trap without solving long-term problems. In a geostrategically sensitive country like Nepal, populism fuels further instability and risk.

On one hand, established political parties have failed to deliver good governance, youth frustration is mounting over unemployment, and the administrative machinery—which should serve as the bridge between government and citizens—has become inefficient, bloated, politicized, and ineffective. On the other hand, a surge in geopolitical interest has fueled the birth and growth of populistic trends. This reflects the reality of Nepal today.

It is under these complex conditions that the country moves toward elections. In this scenario, the decisive power to determine whether to bring political stability and economic prosperity or to deepen instability lies with the voters.

India, China, the United States, and European nations all hold deep, competing interests in Nepal, continually attempting to expand their influence. This is a natural reality of international politics. However, Nepal's future ultimately rests in the hands of Nepalis—especially its responsible political parties. If these parties refrain from repeating past mistakes, internalize the youth's demands for good governance, transform themselves, strengthen state institutions without politicizing them, and maintain stable governance alongside balanced diplomacy, Nepal can navigate its position at the geopolitical crossroad successfully. Failing to do so carries a grave risk of deepening political instability and leaving Nepal caught helplessly in the geopolitical whirlpool.