Between Two Giants: Nepal’s Struggle to Preserve Strategic Autonomy in an Era of India-China Rivalry
NEW DELHI – When twenty Indian soldiers died in hand-to-hand combat in the Galwan Valley in June 2020, the shock registered far beyond Ladakh. For Nepal, landlocked between Asia’s two ascending giants, the clash was a reminder that the Himalayan frontier it had long treated as a protective buffer was hardening into a fault line. Six years on, even as New Delhi and Beijing edge toward a fragile thaw, Nepal’s cherished doctrine of balanced neutrality looks more strained than at any moment in its modern history.
The thaw itself is real but shallow. The October 2024 agreement to disengage at Depsang and Demchok, followed by the Modi-Xi meeting on the sidelines of the BRICS summit in Kazan, restored a measure of calm to the Line of Actual Control. Yet the underlying territorial dispute remains unresolved, and the contest has simply migrated from the trenches to the economic and diplomatic arena, precisely the arena in which small states like Nepal are most exposed. When elephants reconcile warily, the grass between them still gets trampled.
Nepal’s response to this predicament is written into its founding document. Article 51 of the 2015 Constitution commits the state to an independent foreign policy grounded in the UN Charter, non-alignment, and the five principles of Panchsheel. It is an admirable legacy, tracing back to Nepal’s participation in the 1955 Bandung Conference. But a constitutional clause is only as strong as the politics that uphold it, and here the gap between principle and practice has widened alarmingly.
That gap is most visible in Kathmandu’s perennial domestic tug-of-war. Nepali politics has long been split between factions that lean toward New Delhi, with which Nepal shares an open border, a common faith, deep kinship ties, and the bulk of its trade, and communist factions that have courted Beijing as a counterweight.
The tilt was unmistakable in December 2024, when then-Prime Minister K.P. Sharma Oli broke with tradition by signing a Belt and Road framework cooperation agreement with China during a state visit to Beijing, rather than making India his customary first stop as Nepal’s prime minister, as had been convention for decades.
The political ground has since shifted dramatically. The Gen Z protests of September 2025 toppled Oli, and the March 2026 election swept the reformist Rastriya Swatantra Party and its young leader, Balendra “Balen” Shah, into power. Shah’s generation is less wedded to the old India-versus-China binary, but it inherits a state whose finances and infrastructure have already been quietly mortgaged.
Nowhere is the danger of an unbalanced tilt clearer than in Nepal’s experience with Chinese capital, and this is precisely where neutrality must be defended with open eyes. The flagship Pokhara International Airport, built with a loan of roughly $216 million from China’s Export-Import Bank, has become a cautionary tale: a parliamentary committee uncovered massive corruption, the runway’s design has drawn scrutiny over its ability to handle wide-body jets, and it sits largely idle while Kathmandu services the debt.
Beijing has cast the airport as a flagship Belt and Road Initiative project, a label Nepal has resisted formally embracing, in part to avoid straining ties with India and to avoid dragging a domestic boondoggle into a geopolitical contest. The parallel to Sri Lanka’s Hambantota is not lost on anyone in Kathmandu.
The pattern extends beyond balance sheets. In the far-western district of Humla, reports of Chinese construction encroaching onto Nepali territory have repeatedly been met with official reticence rather than firm public protest, a troubling concession for a state whose constitution makes territorial integrity its first duty.
By contrast, India’s disagreements with Nepal, though real, have been aired openly between two democracies with established channels to resolve them. The asymmetry matters: a neighbor that buries inconvenient facts is far harder to hold accountable than one that argues with you in public.
This is the crux. Non-alignment was never meant to be neutrality between right and wrong, nor a posture of passive equidistance. It was meant to preserve Nepal’s freedom of action.
When loans arrive without transparency, when border encroachments are hushed up, and when infrastructure is retroactively conscripted into someone else’s grand strategy, neutrality erodes, not because Nepal chose a side, but because it failed to guard the ledger. China’s debt-fueled model, built on expediency over transparency, corrodes the very autonomy Nepal claims to prize.
Can balanced neutrality survive? It can, but only if Nepal stops mistaking silence for sovereignty. The Shah government has a rare opening: a popular mandate, a thawing regional climate that lowers the temperature, and a public increasingly impatient with corruption dressed up as connectivity.
Genuine non-alignment now demands transparent loan terms, parliamentary scrutiny of every cross-border megaproject, the diversification of trade and energy partners, including the electricity exports already flowing south to India and Bangladesh, and the plain courage to name encroachment when it occurs.
The Himalayas have always offered Nepal a measure of protection. But geography alone no longer suffices. In an era when its giant neighbors compete by other means, Nepal’s autonomy will be defended not on the ridgelines but in its budget hearings and its boundary commissions. Neutrality remains viable, but only as an active discipline, never again as a comfortable silence.
Ashu Mann
Ashu Mann is an Associate Fellow at the Centre for Land Warfare Studies. He was awarded the Vice Chief of the Army Staff Commendation card on Army Day 2025. He is pursuing a PhD in Defense and Strategic Studies at Amity University, Noida. His research focuses include the India-China territorial dispute, great power rivalry, and Chinese foreign policy.
- Ashu Mann#molongui-disabled-link
- Ashu Mann#molongui-disabled-link
- Ashu Mann#molongui-disabled-link
- Ashu Mann#molongui-disabled-link
