Nepal, China, India and the Regional Balance of Power: Challenges and Opportunities for Nepal

# Prem Sagar Poudel

In September 2025, when Nepal’s first female Prime Minister, Sushila Karki, took office, the congratulatory messages she received from Indian Prime Minister Narendra Modi and Tibetan spiritual leader the Dalai Lama went beyond mere courtesy. These messages, on the one hand, reflect the interest of regional and spiritual leaders for Nepal’s political stability, while on the other hand, they re-expose Nepal’s diplomatic sensitivities and the challenges of international balance.

In his message, Prime Minister Modi expressed his “commitment to further strengthen historical and cultural ties with Nepal” and said that “India will always stand by Nepal in its pursuit of stability, prosperity and democratic consolidation.” While such a statement may seem friendly on the surface, the message behind it within the diplomatic ranks holds deep meaning for Nepal, especially when its context is also linked to a recent statement made by Indian Foreign Minister S. Jaishankar.

The message given by the Dalai Lama carries even deeper symbolism. He praised Nepal’s democratic maturity and tolerant political tradition, and hoped that “Nepal will become an example to the world for peace, compassion, and harmony.” Such a spiritual perspective is a belief in human values that transcend geographical boundaries, which can also be politically sensitive in the context of a powerful neighbor like China. Therefore, it is important to view these messages not as mere diplomatic formalities, but as a context tied to Nepal’s strategic situation.

Indian Foreign Minister S. Jaishankar’s recent public statement that “India is closely observing the developments in Nepal” seems consistent with the message of good wishes, but it also reveals concerns about India’s strategic awareness and control over Nepal. While India’s interest in Nepal is natural under its “Neighborhood First” policy, the question of how much independent decision-making it allows remains unanswered.

India has a history of directly and indirectly influencing Nepal’s internal politics in the past. Issues like the blockade, the Madhesi movement, and disagreements over constitution-making are not just disputes, but also signs of an imbalance of power in Nepal-India relations. Against such a background, Modi’s message of good wishes can be understood more as a ‘sign’ than ‘cooperation’, a continuation of India’s vigilant monitoring of the path Nepal chooses.

The Dalai Lama’s message is special because it not only wishes for peace, but also signals to make Nepal’s character and role “anti-China in the world.” And in China’s eyes, showing the Nepalese government’s closeness or sympathy with the Dalai Lama indicates that it is playing against China from Nepali soil. Nepal appears to have been committed to One-China in the past on the issue of Tibetan refugees. Therefore, the Dalai Lama’s message has created a serious diplomatic and strategic conspiracy to push Nepal towards Ukrainianization.

India is a traditional regional power in South Asia, and with China’s rise as a global superpower, the balance of power equation is becoming more complex. Such expressions are not just of diplomatic interest, but also have deep geopolitical implications, which is a sensitive issue that could have a long-term impact on Nepal. Nepal’s geographical location between India and China is not only a source of problems; it can also be a source of potential. But for that, strategic clarity, strengthening of diplomatic capacity, and transparency in decision-making are indispensable.

Nepal has adopted a strategy of seeking diverse cooperation and partnership opportunities with both India and China over the past two decades, which some analysts call a “balanced foreign policy.” But in practice, Nepal does not seem to have been very successful in maintaining such a balance. Nepal’s participation in China’s Belt and Road Initiative (BRI) and subsequent obstacles, the Kalapani-Lipulekh dispute with India, and the ambivalence seen on issues such as the MCC, all of these show that Nepal’s foreign policy has not yet become institutionalized and visionary.

The power competition between India and China is not limited to economic or military borders; it has begun to affect domestic politics, infrastructure development, information flow, and public opinion formation. Nepal’s governing mechanism, ideological ambiguity of parties, and internal factionalism seem to weaken its ability to protect the country from such geopolitical competition. In such a situation, Nepal risks being limited to the role of a mere reactionary nation.

The main challenge for Nepal today is to establish strategic clarity based on national interests. That clarity should not be guided by anti-India or pro-American sentiment; rather, it should stand for Nepal’s own long-term independence, economic prosperity, and political stability. Nepal’s geography can become a suitable ‘bridge’ for multilateral cooperation rather than a one-sided ‘alliance’; if diplomatic skills, institutional capacity, and national unity are maintained.

The impact of concepts like the Indo-Pacific Strategy, Quad, BRI, and GSI (Global Security Initiative) is no longer limited to oceanic and power nations; its influence has spread to the mountainous countries as well. If Nepal understands its sensitive situation, it can protect its land from the threat of being turned into a battlefield of competing influences.

Nepal needs to pay immediate attention to the following issues: We must expand free and mutually beneficial relations with all, including India, China, the United States, and the European Union. We must protect the decision-making process from foreign influences and interests by bringing transparency into policy-making through strengthening the constitution and legal system. We need to bring forward skilled, trained, and strategically minded diplomats and enable the Ministry of Foreign Affairs to formulate research-based policies. It is also necessary to include the voice of the people in foreign policymaking by promoting open debate and public awareness about foreign interference and influence. And finally, excessive dependence on foreign grants and loans can pose a threat to a nation’s policy independence; hence, the need to build a self-reliant structure in the long term.

Nepal’s sovereignty is not only secured by protecting its borders, but also by strategic thinking, autonomy of policymaking, and the collective consciousness of the people. It is important to maintain relations with a neighbor like India, but that relationship must be balanced, transparent, and based on Nepal’s interests. Jaishankar’s statement is not just a sign of caution for Nepal; it is also an opportunity to strengthen its own independence and foreign policy.

The messages received by Prime Minister Sushila Karki not only mark Nepal’s diplomatic trajectory but also raise serious questions about the nation’s decision-making capacity and self-identity. Will Nepal repeat history or open the door to a new era? This decision is the collective responsibility of the Nepali leadership, institutions, and people.

(The author is a senior journalist, political analyst, President of the Nepal-China Mutual Cooperation Society, and an expert on international affairs.)