Nepal’s Contentious Move Toward China’s BRI: Geopolitical Risks and Strategic Shifts

GG News Bureau
New Delhi, 31st Dec. Nepal Prime Minister K P Sharma Oli’s decision to align with China’s Belt and Road Initiative (BRI) marks a bold, yet contentious move in the country’s foreign policy. The agreement has been heralded by some as a transformative leap for Nepal’s development, while others fear its potential impact on the nation’s sovereignty and regional stability.

The signing of the BRI is seen as a challenge to U.S. strategic interests in South Asia, deepening China’s regional influence. The United States, focused on countering China’s growing global presence, may view Nepal’s participation in the initiative as a setback to its Indo-Pacific strategy. Washington could respond by increasing economic aid and security cooperation with Nepal, promoting democratic governance, and leveraging soft power to offset Beijing’s influence. Additionally, the U.S. may collaborate with India to jointly address the strategic implications of Nepal’s alignment with China.

For India, Oli’s embrace of the BRI presents a significant challenge. Nepal, which has traditionally enjoyed close ties with India, is now deepening its relationship with China, a country with whom India shares a complex and often contentious relationship. The BRI, which seeks to improve global connectivity through infrastructure projects, has raised concerns about its long-term economic and geopolitical risks. Critics of China’s BRI point to its debt-trap diplomacy, in which countries become ensnared by unsustainable loans from Beijing.

Nepal, with its fragile economy and growing debt burden, risks falling into a similar trap. Already owing $3 billion to China, Nepal’s participation in the BRI will further strain its finances, which stand at a total of $38 billion in debt. The fear is that Nepal may find itself vulnerable to Beijing’s economic and political leverage, as seen with Pakistan, where involvement in the China-Pakistan Economic Corridor (CPEC) has ballooned the country’s debt to an estimated $25 billion.

In contrast, India has offered Nepal approximately $1.5 billion through grants and loans, focusing on health, education, and infrastructure projects. This approach has emphasized trust-building and cooperation, in stark contrast to China’s loan-based model.

Oli’s alignment with China presents a significant departure from Nepal’s long-standing foreign policy of maintaining a delicate balance between India and China. This shift has raised concerns in New Delhi, which fears that Nepal’s pivot towards Beijing could undermine its historical influence in the region. Nepal’s participation in the BRI is seen as a direct challenge to India’s strategic interests, especially in the context of the Trans-Himalayan Multi-Dimensional Connectivity Network, which aims to turn Nepal into a regional connectivity hub.

Domestically, Oli’s pro-China stance has polarized Nepal’s political landscape. The Nepali Congress, which has traditionally aligned itself with India, has expressed strong reservations about the BRI, citing the dangers of unsustainable debt and a loss of strategic autonomy. The Nepalese public is also divided, with concerns over the environmental and social impacts of large-scale infrastructure projects associated with the BRI.

Additionally, Nepal faces growing tensions along its Himalayan border with China, where reports of encroachments and infrastructure developments have raised alarms about Beijing’s intentions. Oli’s silence on these incursions has only heightened concerns about his government’s commitment to protecting Nepal’s sovereignty.

For Nepal, the BRI offers the promise of economic growth, improved connectivity, and access to global markets. However, the country must carefully navigate the risks associated with mounting debt and the potential loss of political and economic autonomy. The experiences of other countries like Sri Lanka and Pakistan serve as cautionary tales for Nepal, highlighting the dangers of over-reliance on Chinese capital.

Oli’s decision to align with China has significant implications not only for Nepal but for the broader South Asian geopolitical landscape. India’s challenge is to respond proactively, strengthening its ties with Nepal through strategic investments, cultural diplomacy, and timely project execution. The United States, too, must reassess its engagement strategy in Nepal, offering alternatives to China’s growing influence.

In conclusion, Nepal’s participation in the BRI represents a high-stakes gamble that could reshape its geopolitical identity. The decisions made by Nepal’s leadership will have far-reaching consequences, not only for the country’s future but also for the broader regional balance of power. The key challenge for all stakeholders—Nepal, India, China, and the U.S.—lies in striking a delicate balance between economic development, sovereignty, and regional stability.