Who Is Shaping Nepal’s Future Politics? The Grayzone Revelations, U.S. Strategy and the Question of Sovereignty

Prem Sagar Poudel

It is becoming increasingly difficult to explain Nepal’s recent political transformation solely through public disenchantment with traditional parties, youth dissatisfaction and the influence of social media. When the materials published by the American investigative publication The Grayzone, earlier programmes of U.S. government agencies, grant records of democracy-promotion institutions and recent formal statements by American officials are placed on the same timeline, many serious questions arise. The question is not merely whether any particular leader was under American influence. The question is how deeply foreign institutions had become involved in identifying and training Nepal’s future political leadership, building networks and studying the political environment.

The Grayzone, citing leaked documents related to a 2019 CEPPS work plan, has claimed that Balen Shah, Rabi Lamichhane, Sagar Dhakal and Sudan Gurung were identified as “catalytic civic leaders” and that there was a plan to support them. Today, some of these individuals are connected to the centre of Nepal’s executive power, parliament and emerging political power structure. The appearance of a name in a document is not sufficient to prove that anyone was a foreign agent. But the question of why they came under the strategic attention of a foreign government-funded structure years before reaching decisive positions in national politics, how they were selected and what kind of support was envisaged for them is not an ordinary one.

The strongest basis for this debate is not The Grayzone’s political interpretation, but the public record of American institutions themselves. USAID’s approximately $20 million “Niti Sambad” programme worked with parliament, the Election Commission, political parties, citizen participation and institutional political capacity development. The International Republican Institute, the National Democratic Institute and the International Foundation for Electoral Systems were active under CEPPS. American assistance was not limited to Nepal’s roads, health sector or development projects. Political institutions, parties, parliament and future leadership development were also within its scope.

This process goes further back. As early as 2012, the National Democratic Institute, through its Future Leadership Academy, provided young activists from different parties with training in leadership, communication, negotiation, policymaking and internal party democracy. Its purpose was not only to improve individual skills, but also to build relationships and networks among future leaders from different parties. Therefore, the long-term engagement of American democracy-promotion institutions with Nepal’s future political generation was not an accidental project.

The alleged 2019 work plan cited by The Grayzone is said to have included plans to expand youth leadership programmes, increase contact with emerging leaders from different parties, challenge traditional political hierarchies and increase the representation of a new generation. It is also said to have included the concept of providing emerging lawmakers with capacities in public relations, social media, public speaking and leadership. If the original document is authentic, this is a matter related to the development of political human resources, different from election management or ordinary civic education.

Another leaked material related to “Yuva Netritwa” claims that Nepali youth were trained in public speaking, strategic messaging, resource mobilisation, advocacy, campaign management and the role of leadership in political change. Such training is not in itself a crime in a democratic society. But when political dissatisfaction, leadership capacity, campaign strategy and public mobilisation are linked within a programme financed by a foreign government, it is natural to question its strategic meaning.

An even more significant fact appears in 2024. The National Endowment for Democracy provided the International Republican Institute with $500,000 to conduct programmes for emerging party leaders in Nepal on policy development, strategic planning, democratic decision-making and constituency outreach. The same structure also conducted a national public-opinion survey intended to be useful for the communication strategy of political parties. In that survey, 62 percent of respondents said they wanted a new political party, while the desire for a new political force was even stronger among younger groups.

Conducting a survey is not the same as creating a party. Providing training does not mean exercising control. But when the same broad institutional structure measures the public’s political demand, trains emerging leaders, produces public-opinion data for communication strategy and expands political networks, it is not enough to describe it merely as a neutral observer of democracy. It is understanding both the demand in the political market and the potential supply of leadership.

This is where the real question of the “political supply chain” arises. Modern political influence does not always operate by distributing money, issuing secret instructions or through military intervention. The political environment is measured, potential leaders are identified, training is provided, connections are established with international networks, communication capacity is developed, the direction of social dissatisfaction is understood, and at a favourable moment previously prepared structures seize the political opportunity. Direct documents are required to prove such a process, but modern influence-building operates through precisely such multiple layers.

The NED has compared its own grant philosophy to “venture capital for democracy,” meaning early-stage risk capital for democracy. It says it makes early investments in civic leaders, political participation and democratic change. American institutional documents themselves also contain language stating that democracy-promotion programmes support long-term U.S. interests and the strategic priorities of the U.S. administration. Therefore, treating such activities merely as philanthropic practices completely unrelated to American national interests does not accord with the facts.

In this context, the February 2026 U.S. congressional hearing on South Asia is extremely important. U.S. Assistant Secretary of State for South and Central Asia S. Paul Kapur presented the political changes in Nepal and Bangladesh as examples of “youth movements” that removed older governments. He argued that the geographic position of smaller South Asian countries, including Nepal, gives them strategic importance far greater than their size and that the United States should remain active in the balance of power in the region.

This was not an isolated comment. At the same hearing, Bill Huizenga, chairman of the U.S. House Subcommittee on South and Central Asia, described the removal of Nepal’s government by young people as a new opportunity for engagement in South Asia for the United States. He also argued that the new generation was more attracted to Western culture and values than to China’s authoritarian alternative and said U.S.-led strategic diplomacy could exert influence in the region.

At the same hearing, senior Democratic member Sydney Kamlager-Dove presented the political transitions in Nepal and Bangladesh as a rare opportunity for the United States to strategically use its “democracy assistance.” This statement is particularly significant. When a senior member of the U.S. Congress herself describes democracy-assistance programmes as leverage that can be used for American strategic interests, the argument that there is no relationship between foreign political assistance and U.S. national strategy becomes weaker.

U.S. Representative Young Kim had earlier described targeted American assistance in developing countries, including Nepal, as an instrument of U.S. “soft power” and national security, warning that if the United States withdrew, China would fill the vacuum. Here too, assistance was not presented merely in the language of development. It was directly connected with power competition with China, American influence and the regional security structure.

Following Nepal’s political transformation, U.S. Secretary of State Marco Rubio supported the Nepali people’s aspiration for transparent government and linked Nepal’s future with regional security and the stability of South Asia. Such diplomatic support after a change of government is not unusual. But when viewed alongside the language used in the U.S. Congress about a “youth movement,” “strategic importance,” “democracy assistance leverage” and competition with China, a larger American policy picture emerges.

Another point deserves attention: even before the political upheaval, the U.S. State Department had been increasing direct contact with Nepal’s young political leadership. During the visit of U.S. Special Envoy for Global Youth Issues Abby Finkenauer, the programme included meetings and cooperation with young political leaders, alumni of U.S. exchange programmes, the Embassy Youth Forum, Emerging Leaders Academy, the U.S. Youth Council and social-media influencers. This was not a reaction after the movement, but an official youth-leadership engagement programme that had already been underway before it.

There was an institutional foundation for this as well. The U.S. State Department’s Bureau of Democracy, Human Rights and Labor had allocated funds for programmes in Nepal and Bangladesh aimed at youth mobilisation, leadership development, youth-led networks, advocacy, coalition building, policy change and greater participation in decision-making. The language used here is itself important. Young people were envisaged not merely as voters or citizens, but as “catalysts” for change in public American programmes.

To call all these facts evidence of a single covert conspiracy would go beyond responsible research. But to say that all of them are entirely unrelated events would also be inconsistent with the facts. Leadership identification, youth mobilisation, political training, public-opinion polling, capacity development of emerging parties, institutional political transformation after the movement and the subsequent description in the U.S. Congress of Nepal’s transformation as a strategic opportunity may represent different layers of the same long-term American democracy-and-influence structure. This relationship requires an impartial national investigation.

Nepal’s internal political development cannot be separated from this. As Maoist power weakened, a large space for alternative political energy opened up. Corruption, unemployment, youth migration, frustration with governance and the repetition of old political parties created a genuine social basis for the search for a new force. The Rastriya Swatantra Party rapidly filled this vacuum. This domestic cause is real. But it is also necessary to compare its timeline with the fact that external institutions were conducting parallel studies and investments in new leadership, public sentiment and emerging political forces.

There is insufficient public evidence to say that the RSP was created while sitting inside a foreign office. But if a political vacuum emerges, foreign institutions have already measured the potential for new leadership, emerging leaders are being trained, and public demand for a new party is being systematically surveyed during the same period, it is also inappropriate to dismiss all of this as mere coincidence.

This issue is not confined to Nepal. In my study, the United States is now moving beyond the old model of working in South Asia only through India. Although India is its principal strategic partner, India’s strategic autonomy, relationship with Russia, role in BRICS, independent energy policy and cooperation with China when necessary have prevented Washington from becoming fully dependent on India. Therefore, the United States is moving in the direction of maintaining various structures of influence inside India while partnering with India, and expanding direct political, security, technological and institutional channels in other South Asian countries, including Nepal.

India’s traditional influence over Nepal is no longer as uncontested as before. Meanwhile, Russia has begun activating its old relationship with Nepal through new diplomatic, economic and cultural dimensions. Israel also appears to be becoming more active in South Asia through cooperation in security, cyber, AI, agriculture and technology. These are not all parts of a single plan, but there are clear signs that the old regional power structure is being realigned.

China views this change with even greater sensitivity. Nepal directly borders Xizang. It would not be realistic to assume that Beijing regards the history of external intelligence support for Khampa activities, Tibetan political networks, the U.S. Indo-Pacific strategy, military contacts, digital structures and Western political-leadership development programmes as entirely separate events. China becoming more alert as direct American presence inside Nepal increases is a natural consequence of this security geography.

For this reason, the Grayzone controversy should not be reduced to an anti-American campaign. The United States is an important friend of Nepal. Nepal has benefited from American assistance, education, technology and development cooperation. But friendship does not mean refraining from asking questions. Genuine friendship becomes stronger when sovereign boundaries are clear.

The same standard should also apply to China, India, Russia, Israel and Europe. If China trains leaders of Nepali political parties, the details should be public. If India uses political networks or exerts influence on domestic decision-making processes, that too should be examined. If any Western or other foreign institution makes financial or institutional investments in political parties, potential leaders, candidates, media organisations or civic campaigns, the amount, purpose and beneficiaries should be public. Selective nationalism does not protect sovereignty.

Factual discipline is equally necessary. The social-media claim that U.S. Congressman Michael McCaul is associated with The Grayzone is incorrect. He is a critic of that media outlet. Likewise, The Grayzone cannot be treated as the source of final truth. CEPPS, NED, USAID, IRI, NDI and IFES are separate legal and institutional structures, even though their activities overlap in many areas within the American democracy-promotion ecosystem. One institutional error does not make an entire document false, and one correct document does not automatically prove every political conclusion.

Nepal therefore now needs investigation rather than accusation. A national record should be prepared of foreign political-assistance programmes since 2010, including their participants, beneficiaries, training, foreign travel, public-opinion surveys, leadership development, digital campaigns, policy consultation and institutional partnerships. If individuals currently holding senior positions benefited from foreign political-assistance programmes, public disclosure would be the best way to build trust.

Parliament should enact a clear transparency law on foreign political assistance and leadership development. Political parties, candidates, ministers, lawmakers and senior officials should be required to disclose training, grants, travel, polling support, campaign communication, leadership mentoring and political-network assistance received from foreign governments or organisations financed by them. The Election Commission should record not only election expenditure, but also foreign-backed political capacity-building undertaken before elections.

The Grayzone report is not the final verdict. But it has opened a closed file. Official American documents and public statements in the U.S. Congress now make it difficult to close that file simply by describing it as the story of an alternative media outlet.

The most serious question is larger than the guilt or innocence of four individuals. If foreign institutions can identify potential leaders before the Nepali state, train them more systematically than Nepali parties, measure political opinion more deeply than the Nepali government and, after the transformation, describe that same transformation as their strategic opportunity, Nepal must redefine its concept of the security of its political system.

It is the job of great powers to pursue their own interests. The United States pursues American interests. China pursues Chinese interests. India, Russia and all others pursue their own interests. Nepal’s failure is not that others make strategies; it is that Nepal does not make its own strategy.

The election may be Nepali. The ballot may be Nepali. The face of the government may be Nepali. But if the process of identifying, preparing and making political alternatives effective becomes excessively dependent on foreign capital, training, data and networks, the question of sovereignty arises not at the border, but at the very centre of the political system.

Nepal does not need to seek hostility with anyone. But it must not allow its future leadership, political consciousness and process of change in power to become anyone’s strategic laboratory.

About the Author: Prem Sagar Poudel is a senior journalist and international relations analyst from Nepal. He has conducted in-depth studies on Nepal-China relations, the geopolitics of the Himalayan region, and Asian security issues.