With Xi Jinping as host, Narendra Modi and K P Oli are both attending the Shanghai Cooperation Council (SCO) meeting on 31 August. It would be appropriate if the diplomatic ‘sherpas’ were able to organise a joint meeting to overcome some sticking points that have emerged in the trilateral interface. These issues are relatively new, related to China’s <a href="https://nepalitimes.com/opinion/what-china-wants">economic and geo-strategic rise</a>, which has reversed its earlier disinterest on matters south of the Himalaya (other than concerns over Tibet activism). While Beijing’s leaders used to be standoffish on Nepal, even advising Nepali leaders to remain on good terms with New Delhi, they are now bullish while lacking full appreciation of <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">Nepal’s positions and interests</a>. Matters are complicated for Nepal by the fact that after decades of relative Indo-Chinese calm following the debacle (for India) of the 1962 war, the 2023 Galwan clashes led to a bilateral nosedive. Both neighbours entered a phase of hi-decibel rancour, with the Indian officialdom and media expecting Kathmandu to choose sides. New Delhi tends to hype any engagement by Kathmandu with Beijing as proof of a ‘China tilt’, or opportunistic use of the ‘<a href="https://nepalitimes.com/news/china-syndrome">China card</a>’. There is irony in this, of course, because China is India’s foremost trading partner, and a source for much that makes <a href="https://nepalitimes.com/opinion/india-has-arrived">India’s economy</a> hum, from pharmaceutical raw material to EV batteries, solar panels, integrated circuits, industrial machinery, etc.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250821100828_327349e434da4a44b12be66625d7a7b1b030c08e38b9a3a96734218e70929302.jpg" data-media-id="editor_4" data-image-id="20250821100828_327349e434da4a44b12be66625d7a7b1b030c08e38b9a3a96734218e70929302" data-rendition-name="original" width="2000" height="1333" loading="lazy" alt="When Xi meets Modi and Oli"> <figcaption>TERRITORIAL IMPERATIVE: Demonstrations in Kathmandu against India's opening of a new link road to Mansarovar of Tibet via Nepal's Lipulek in 2020. Photo: BIKRAM RAI/ NT ARCHIVE </figcaption> </figure>  While in an inextricable economic embrace with Beijing, New Delhi diplomats, media commentators and ‘think-tankers’ would want Kathmandu (and Dhaka, Colombo) to keep Beijing at arm’s length. Nor would they stop to consider that it was the Indian economic<a href="https://nepalitimes.com/opinion/aftershocks-of-the-blockade"> blockade </a>of 2015 that accelerated Kathmandu’s signing a slew of agreements with Beijing two years later on cross-border roads, transmission lines, bilateral trade, third-country transit, as well as the Belt and Road Initiative Framework. Chinese goods and services New Delhi analysts must abandon suspicions of foul play whenever a South Asian neighbour seeks out <a href="https://archive.nepalitimes.com/article/International/China,442">Chinese goods and services</a>, scientific advances, education, and bilateral and third-country trade. They also need to consider <a href="https://nepalitimes.com/here-now/looking-beyond-two-boulders">the advantages</a> of Nepal providing the most geographically practical surface connectivity between the Chinese mainland and the Indus-Ganga-Brahmaputra basin, using the railhead that has already arrived at Shigatse west of Lhasa. Of the 14 countries that China borders, and India’s seven, Nepal is unique for its open border to the south. New Delhi security experts constantly warn of third-country infiltration into India using the free passage, but if that is the case Beijing too will now have reason to feel vulnerable, given the possibility of quick south-to-north passage across Nepal on <a href="https://nepalitimes.com/banner/on-the-fast-lane-to-expressways">new highways</a>. Nepal is also unique in that its citizens have historically been allowed to join the Indian military, even though recruitment is halted since 2022 due to <a href="https://nepalitimes.com/news/lockdown-5-utlzqtvs">the Covid pandemic</a>, followed by India’s introduction of the Agnipath recruitment scheme. As is natural between any two neighbours, Beijing and Kathmandu have issues to sort out, such as: the mutual respect of Bon, Mahayana and Vajrayana communities across the Himalaya defiles, access to historically shared high pastures, unilateral closure of border points by Beijing that impacts<a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential"> tourism and trade</a>, and the occasional ill-considered statements regarding Nepal’s third-country relations that emerge from Beijing officialdom, such as on the US-funded Millennium Challenge Compact. It is a fact, however, that the Nepal-China relationship is clouded by diffidence of the Kathmandu polity in dealing with Beijing interlocutors. The Nepal side has been conditioned over the decades by the need for Kathmandu to prop up the China relationship as a counter to the overwhelming presence of India in the polity, which has meant more fawning northward than is healthy. Meanwhile, it would help for Chinese delegations not to insist on the Nepali side repeating ad nauseum its commitment to the one-China policy, or disallowing Nepali territory to be used against China. These are by now state policy, not requiring humiliating repetition. India-China-Nepal The <a href="https://nepalitimes.com/news/nepal-s-love-triangle-with-china-and-india-impacts-investment">India-China-Nepal</a> interface has not been discussed enough as a foreign affairs sub-discipline, mainly because of the timidity of Kathmandu’s officialdom and intelligentsia. In these times of ascendant China and defensive India, Nepal must place its concerns on the three-way table.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250821100856_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea.jpg" data-media-id="editor_12" data-image-id="20250821100856_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea" data-rendition-name="original" width="1108" height="1550" loading="lazy" alt="When Xi meets Modi and Oli"> </figure>  Limpiyadhura Triangle: The area in Nepal’s northwest encompassing 370 sq km between Limpiyadhura peak, Lipulek pass and Kalapani encampment is claimed by Kathmandu, the area having been incorporated in the 2015 Constitution. <a href="https://nepalitimes.com/banner/borderline-disorder">The Sugauli Treaty of 1816 </a>indicates Nepal’s western boundary as the Kali River, and Kathmandu claims the main river stem as starting from Limpiyadhura. Whereas, New Delhi claims that the smaller stream going straight north from Kalapani is the official Kali. Nepal is thus in a significant territorial dispute with India, a matter that was ignored by both New Delhi and Beijing when they reached an accord in May 2015 to regularise cross-border trade and pilgrim traffic via Lipulek. Prime Minister Sushil Koirala sent a protest note to both capitals. And yet, tone-deaf to Nepal’s position, foreign ministers Wang Yi and S Jaishankar on 19 August 2025 signed an agreement to resume border trade via Lipulek. Especially because he is scheduled to visit the SCO Summit in end-August and Bodh Gaya on 17 September, it is important for PM Oli to immediately send diplomatic notes to both capitals as did his predecessor PM Koirala. To recall, it was under Oli as Prime Minister that the Limpiyadhura Triangle was officially incorporated into Nepal’s Constitution in the Second Amendment of June 2020.&nbsp; Hydropower Exports: While there is a power trade agreement between Nepal and India, New Delhi has put regulations that restrict Kathmandu from exporting from hydropower plants that are funded, financed or constructed with Chinese involvement. This stricture even applies to the agreement to supply 40MW to Bangladesh via the Indian grid. New Delhi’s officialdom evidently believes that electrons have nationality, and anything with a whiff of Chinese involvement is to be rejected. This is an unfriendly position towards both Nepal and China, though one does not know whether Beijing is bothered enough as it seeks to woo India and its massive consumer market. Meanwhile, the restrictions on ‘China tainted’ energy exports have impacted Chinese FDI in Nepal’s hydropower sector. Airports and Airlines: The new international airports at Bhairawa and Pokhara have become a burden on the economy because of the in-country graft and malfeasance. Neither of the two airports has been able to ‘go international’ due to the government’s inability to plan ahead on air routes, passenger traffic and tourism. India has been least cooperative, however, disallowing instrumental landing system at Bhairawa on the pretext that it will interfere with flights at its nearby military airbase. This point is moot now because of satellite-aided navigation systems, but New Delhi officialdom continues to dissuade airlines from connecting Indian cities to both airports because of Chinese involvement in their construction. Sourcing international loans, grants and contractors is Kathmandu’s sovereign lookout, and it is improper for New Delhi to act so obstructionist. While Pokhara’s airport was built on a loan from the Export–Import Bank of China, Bhairawa was financed by the Asian Development Bank, with only the civil works carried out by a Chinese company responding to a global tender. At the upcoming summit of the Shanghai Cooperation Organisation, whose goal is “regional security, economic cooperation and cultural exchange”, PM Oli must remind both his host President Xi and fellow guest PM Modi that the China-India relationship even as it blows hot and cold can never be at the cost of Nepal. &nbsp;

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When Xi meets Modi and Oli

Will President Donald Trump give his Chinese counterpart Xi Jinping a gift? While Trump prizes unpredictability, Xi aims to position China as a force for global stability. Thus, there is a widespread assumption that China will rush to fill the vacuum left by an increasingly nationalist and isolationist United States.
The Chinese leadership has no interest in filling America’s shoes. Attempting to do so could cost China dearly just when it is undertaking a broader economic reorientation at home. The world may be tired of US interventionism – and, now, of <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trumpian aggression</a> – but that does not mean it is ready to welcome an abstemious superpower.&nbsp;
China has studiously avoided becoming involved in major crises beyond its <a href="https://nepalitimes.com/editorial/trans-himalayan-handshake">immediate neighbourhood</a>. Though it has proposed global initiatives on ‘development’, ‘security’, and ‘civilisation’, and articulated a vision of multipolarity in which all countries are treated equally, its efforts to realise these goals have not gone beyond economic statecraft.
While foreign commentators debate what <a href="https://nepalitimes.com/here-now/what-is-xi-jinping-s-big-surprise">China’s vision </a>entails – with some describing it as a potentially benevolent hegemon, and others as a malevolent one – Chinese authorities and intellectuals are more immediately concerned with weathering the storm that Trump has unleashed.
Viewed from outside, China’s core <a href="https://nepalitimes.com/here-now/staying-neutral-in-a-us-china-confrontation-8qni2ij1">national interests</a> seems straightforward: to replace the US as global leader. But pursuing that role may contradict other core interests, such as maintaining regime legitimacy and security, orchestrating a continuous rise in living standards, and reunifying Taiwan with the mainland.&nbsp;
These goals might best be served by maintaining a cold peace with the US, rather than embracing conflict with it.
Having watched the US, China knows all too well that being a <a href="https://archive.nepalitimes.com/news.php?id=4815">global superpower </a>would inevitably draw it into regional conflagrations that it would prefer to avoid. But China also knows that it has benefited massively from the relatively stable world economy that the US and its allies helped bring about.
China needs to retain enormous amounts of resources and manpower domestically to tackle its biggest challenges. Chinese leaders must <a href="https://nepalitimes.com/news/nepal-s-bubble-economy">manage an economy</a> that is no longer driven primarily by property development and exports, while preparing for the possibility that one of its largest trading partners could descend into total isolation.
Trump’s ‘Liberation Day’ tariffs and escalatory duties in response to Chinese countermeasures were a wake-up call. Whatever happens in the trade war, China urgently needs to rebalance its economy by stimulating greater domestic demand.
While Chinese leaders have long acknowledged the need for such a rebalancing, they have been slow to follow through with the necessary policies. Public messaging notwithstanding, they have continued to prioritise industrial output over living standards, and capital investment over consumer spending. But the prospect of losing one of its biggest export markets should change this calculation.
Read also: <a href="https://nepalitimes.com/opinion/turning-point-in-us-india-relations">Turning point in US-India relations</a>, Shashi Tharoor
Similarly, China has an interest in building resilient supply chains for critical technologies in order to circumvent US chokepoints. A significant share of national resources has already been redirected toward promoting domestic innovation.&nbsp;
With the Sino-American rivalry intensifying over the past decade, Chinese leaders have come to regard domestic innovation as a strategic necessity.
Beyond boosting domestic innovation, China is eager to seize opportunities to set the global governance agenda for emerging technologies.&nbsp;
Its recent successes in <a href="https://nepalitimes.com/here-now/nepal-needs-to-be-more-intelligent-about-ai">AI</a> – most notably <a href="https://nepalitimes.com/here-now/artificial-censorship">DeepSeek</a>’s release of low-cost models that rival those from top US developers – have created a strong impetus for China to amplify its voice. China’s message – that a handful of rich countries should not be able to monopolise the technologies that will determine everyone’s economic future – undoubtedly resonates with many around the world.
During the post-Liberation Day staring contest with the US, China convened an impromptu gathering of the all-powerful Politburo and Chinese ambassadors stationed abroad. The purpose was to assess China’s relations with its neighbours, and the stature of those in attendance spoke to the sense of crisis that had swept through the country’s top leadership.&nbsp;
More to the point, the meeting confirmed that China’s strategic orientation remains focused on its own region – not the global context.
Beijing remains fully committed to maintaining strong ties with the Kremlin, viewing Russo-Chinese alignment as a geographical and strategic necessity. The two countries’ 4,209km land border gives China more than enough reason to work with Russia.&nbsp;
China’s ultimate focus is not Russia but its long-term rivalry with the US. An axis with President Vladimir Putin’s regime might well offer a workable (if imperfect) solution to the containment strategy that America has been pursuing against China.
Likewise, China has been de-escalating tensions with India, another large, nuclear-armed neighbour. Both know that the structural and historical strains on their relationship – characterised by an obvious power imbalance and mutual mistrust – will not be easily eliminated. But both also know that predictable, stable ties will yield big benefits over time, especially in a new multipolar order.
PAX SINICA
Beyond managing relations with its immediate neighbours, China has sought to mobilise the Global South behind reforms to multilateral institutions.&nbsp;
When Chinese leaders and diplomats speak of ushering in an ‘orderly multipolarity’, they mean an international order in which the non-Western world has much more clout. Hence, China is a strong advocate of the recent BRICS expansion, and of proposals to redistribute voting shares within Western-dominated international financial institutions.
China has also sought to shape the agenda at United Nations-affiliated institutions where the US historically has had less influence, such as at UN Trade and Development and the South Centre. It can assume a limited leadership role without directly confronting the US and the rest of the G7.&nbsp;
China does have a foreign-policy interest in subtly countering US influence in the developing world, which is why it builds large-scale infrastructure and addresses long-ignored development needs there without making any demands about democracy, human rights, and accountability.&nbsp;
Instead of offering security guarantees, China offers roads and bridges. In exchange, it can secure access to critical raw materials and open new markets for its state-owned enterprises and private companies at a time when the US and Europe are closing their doors.
China did broker a modest rapprochement between Iran and Saudi Arabia, and its Global Security Initiative <a href="https://www.iiss.org/research-paper/2024/10/the-global-security-initiative-chinas-international-policing-activities/" target="_blank">aims to</a> foster international cooperation in counter-terrorism, cybersecurity, biosecurity, and emerging technologies.
But in the case of the <a href="https://nepalitimes.com/opinion/how-to-agree-an-armistice-in-ukraine?%2F=">Russia-Ukraine </a>and<a href="https://nepalitimes.com/opinion/mortality-in-the-gaza-israel-war"> Israel-Hamas</a> wars, it has avoided taking direct responsibility, let alone providing any security guarantees. Of course, China’s self-proclaimed neutrality on the war in Ukraine has not gone unchallenged.&nbsp;
In Gaza, China has criticised the US for supporting Israeli Prime Minister Binyamin Netanyahu’s agenda of continuing the war. But unlike Iran – which China relies on for oil – these other flashpoints have been kept at arm’s length.
Read also: <a href="https://nepalitimes.com/editorial/world-wars">World wars</a>
China would face three big challenges in pursuing even partial or limited global leadership. First, given America’s accelerated withdrawal from international affairs, China might struggle to sustain its commercial engagement with many parts of the world. After all, the US wants to impose drastic costs on those who do business with China, and it may well get its way.
Second, China cannot avoid engagement in dangerous security situations forever. Sooner or later, it will have to develop a truly global foreign policy. In fact, simply putting its own Global Security Initiative into practice would require it to do much more heavy lifting, not only in setting the agenda but also in terms of deploying security personnel and resources. America may be retreating, but that does not mean it will sit idly by and watch China try to increase its own influence.
Third, China still needs to orchestrate a domestic economic rebalancing – a process that will have enormous global consequences. Shifting from export-led growth to greater domestic consumption will take years, and the push to rebalance may run up against China’s ambition to remain a global manufacturing powerhouse.&nbsp;
The latter objective is already causing tensions with Europe and some developing countries whose domestic manufacturers are struggling to compete with Chinese national champions (such as the electric-vehicle maker BYD).
Even as its economy continues to grow, China will remain a largely self-centered and reluctant superpower. Unlike the US, its domestic political economy calls for a more restrained foreign policy, focused primarily on its immediate neighbours and commercial opportunities in the Global South.
As the world grapples with the decline of US power and the shift toward multipolarity, China will increasingly become the centre of gravity in the global economy. The rivalry between a political and military superpower and an economic one will be dangerous for everyone. Both must tread carefully to prevent economic warfare from escalating into a conflict that all would regret.
&nbsp;©Project Syndicate&nbsp;
Yu Jie is a senior research fellow on China in the Asia-Pacific Program at Chatham House.

What China wants

India’s relationship with the United States has long been a careful balancing act between shared democratic values and sometimes diverging national interests. But recent diplomatic tremors have unsettled India, prompting it to question whether the partnership has reached a turning point.&nbsp;
In what Indian officials view as an unsettling display of geopolitical grandstanding, President Donald Trump has <a href="https://www.thehindu.com/news/international/india-pakistan-would-still-be-at-war-if-not-for-his-intervention-trump-repeats-ceasefire-claim/article69865245.ece" target="_blank">taken credit</a> for halting <a href="https://nepalitimes.com/editorial/nukes-in-the-neighbourhood">recent hostilities between India and Pakistan </a>by threatening to disrupt trade ties.&nbsp;
India has bristled at Trump’s claims, not only because it is fiercely protective of its sovereignty, but also because they lack merit. As Prime Minister Narendra Modi and Foreign Minister Subrahmanyam Jaishankar have noted, Trump <a href="https://youtu.be/XNv61DN7foQ?si=GUP5aymVf5lLFS8B" target="_blank">did not even call them</a> during the conflict in May.&nbsp;
Bilateral trade was <a href="https://www.thehindu.com/news/national/ceasefire-had-no-linkage-with-us-trade-jaishankar-in-parliament/article69866620.ece#goog_rewarded" target="_blank">not mentioned</a> by any US official while the fighting was underway. Trump may well have pressed Pakistan to end <a href="https://nepalitimes.com/editorial/world-wars">the violence</a>, but India did not need persuading. As a status-quo power focused on its own economic development, the last thing India wanted was a protracted conflict.&nbsp;
It was always clear that ‘Operation Sindoor’ – which featured strikes on nine known terrorist basecamps and other facilities in Pakistani territory – was retribution against the terrorists who had targeted Indian tourists, not the opening salvo in a war against Pakistan.
When Pakistan retaliated with indiscriminate attacks, India initiated another decisive but carefully calibrated strike – this time, on 11 Pakistani air bases. It was this manoeuver – possibly coupled with US pressure on Pakistan’s government – that prompted Pakistan to seek a cessation of hostilities. Trump hardly deserves credit for this outcome, and yet, true to form, he has sought to claim it.&nbsp;
But India will not tolerate the implication that it succumbed to Trumpian threats or blandishments. This is not Trump’s only action that is giving India pause.&nbsp;
In June, he hosted Pakistan’s army chief, Field Marshal Asim Munir – whom India’s government and opposition parties alike regard as a hardline Islamist ideologue – at a White House lunch. Pakistan’s civilian leadership was not at the table.
Trump’s unpredictability vis-à-vis China is similarly troubling. Whereas he took a reliably hardline approach to the country during his first presidency, <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trump 2.0</a> blows hot and cold. One minute, he is imposing extreme tariffs against China, the next, he is <a href="https://www.reuters.com/world/china/us-china-hold-new-talks-tariff-truce-easing-path-trump-xi-meeting-2025-07-28/" target="_blank">seeking</a> to negotiate a trade truce and <a href="https://www.reuters.com/world/china/trump-says-he-is-not-seeking-summit-with-xi-may-visit-china-2025-07-29/" target="_blank">saying</a> that he might visit Beijing at Chinese President Xi Jinping’s invitation.
Where India fits into these calculations – if it factors into them at all – is a mystery. During Trump’s first term – as well as during <a href="https://www.project-syndicate.org/columnist/joseph-biden-jr" target="_blank">Joe Biden</a>’s presidency – the US regarded India as a vital partner in the Indo-Pacific and a democratic bulwark against China.&nbsp;
While India upheld its foreign-policy doctrine of strategic autonomy and avoided committing to any confrontation with China, it welcomed US engagement in the region, and supported the revitalization of the Quad, which includes Australia, Japan, and the US, in 2017.&nbsp;
After all, India has its own quarrels<a href="https://nepalitimes.com/opinion/chindia"> with China</a>, which has ramped up its encroachments on their disputed frontier in recent years and lent critical support to Pakistan.
Now, China is directly <a href="https://nepalitimes.com/opinion/india-has-arrived">undermining India</a>’s industrial ecosystem, by restricting the flow of engineers to the country and barring Indian factories’ access to high-end Chinese machinery. The impact on sectors like electronics and manufacturing is already visible.&nbsp;
China’s influence across <a href="https://nepalitimes.com/editorial/south-asia-2040-qxr16oup">South Asia </a>is also growing, extending from Bhutan and Nepal to Bangladesh and Sri Lanka.
Indian officials and businesses see China as a threat. But it is difficult to know where the US stands, especially after Trump opted not to rebuke China publicly for offering intelligence assistance to Pakistan, including real-time satellite data that <a href="https://www.business-standard.com/external-affairs-defence-security/news/china-provided-pakistan-with-satellite-support-says-indian-defence-group-125051900505_1.html" target="_blank">reportedly facilitated</a> Pakistani strikes on Indian military targets during the recent conflict.&nbsp;
When it comes to trade, moreover, Trump has often been tougher on partners than adversaries. This week he increased tariffs to 50% on Indian goods for its energy and military equipment imports from Russia.
<a href="https://nepalitimes.com/news/the-great-game-2nd-half">Trump’s capriciousness </a>has heightened India’s strategic anxieties. The US has proved to be an unreliable partner before, like during the 1999 Kargil conflict when it denied India access to vital GPS data.&nbsp;
Now, Indian decision-makers are split: Should India decouple from China, trusting the US to have its back, or pragmatically engage with it, for fear that the US will do the same? This raises an even more fundamental question: What is the value of a partnership that is subject to the whims of an outsize ego?
India will not panic, but it might pivot. Given its lack of treaty obligations, it has greater leeway to act independently than formal US allies like Japan or South Korea. It might use this manoeuvering room to adjust its foreign-policy orientation. Jaishankar’s July visit to Beijing pointed to a desire to broaden channels of communication with China.&nbsp;
While India is not downgrading its ties with the US, it is emphasising self-reliance. This may lead to a more transactional bilateral relationship, shaped less by ideals than interests.
Indian foreign policy will remain rooted in deterrence, decisiveness, and non-tolerance of terror, outlined in Modi’s newly articulated <a href="https://garhwalpost.in/the-modi-doctrine-indias-new-normal-in-a-fractured-world-order/" target="_blank">strategic doctrine</a>. As for the US, India will continue to walk the same tightrope, constantly aware that it may be fraying at one end.
©Project Syndicate 
 
 Shashi Tharoor is a former Indian Minister of State for External Affairs and is an MP for the Indian National Congress and Chairman of the Parliamentary Standing Committee on External Affairs. He is the author, most recently, of <a href="https://www.alephbookcompany.com/book/ambedkar-a-life/" target="_blank">Ambedkar: A Life</a> (Aleph Book Company, 2022).

Turning point in US-India relations

Described by its founding king 260 years ago as a “yam between two boulders” pressed on both sides by the Chinese Empire and British India, the metaphor has metamorphosed in the new geopolitical reality that Nepal faces. The gradual withdrawal of a distracted West, the rise of India and China, and emerging power of the Gulf states is also changing Nepal’s foreign policy outlook, and forcing it to reimagine its place in a multilateral world. After Donald Trump became president for the second time this year, geopolitics is going through a tectonic shift. Washington’s relations with New Delhi have recently become strained after Trump took credit for the ceasefire between India and Pakistan in May, and Trump dining with Pakistan Army chief Asim Munir at the White House. Then, Trump threatened to impose an extra tariff on 10 members of the BRICS bloc, which includes India. “Recent developments between India and the US are a result of President Trump’s reactive approach that did not meet Indian prime minister Modi’s expectations,” explains international relations expert Prakash Bhandari. If this pushes India closer to China, it may tip Kathmandu’s precarious balancing act between Beijing and New Delhi. Although Nepal has not suffered punitive US trade tariffs like other Asian countries, the closure of USAID projects and imminent mass deportation of Nepali TPS migrants will have far-reaching consequences. “There are multiple global crises happening at the same time. Any attempt to change Nepal’s non-aligned principle during this complicated phase of world politics will push us into a deep quagmire,” warns foreign policy expert Nishchal Nath Pandey. Shifting geopolitics could force Nepal to review its policy of neutrality and equidistance between its two giant neighbours to pursue a more pragmatic economic diplomacy that focuses on foreign investment, trade, tourism, and labour export. Experts have often joked that Nepal is not “landlocked but India-locked” since trans-Himalayan connectivity is much more difficult than the open border to the south. This has historically made Nepal more economically and politically dependent on India. “Whether like it or not, we are likely to lean more towards India,” says Santosh Sharma Poudel from Nepal Institute for Policy Research. “Even Chinese leaders have told Nepal’s rulers to maintain friendly relations with India.” This may therefore be the time for Nepal to look beyond the ‘two boulders’ to promote foreign direct investment from countries like Japan, Korea, the Gulf states and Europe. Besides serving as a destination for Nepali migrants, countries like Qatar, Saudi Arabia, UAE and Oman have untapped investment and tourism opportunities. “Sectors such as hydropower and trade have immense investment potential from countries beyond our neighbours,” says Poudel. Even so, the geopolitical reality is that India and China will always loom large. India has barely tolerated increased Chinese presence in Nepal’s hydropower and infrastructure, refusing to buy electricity and allow flights from projects with Chinese involvement. Nepal has felt squeezed by the two neighbours both when their relations are strained after border skirmishes, or when their relations are good.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025072809074_febdc8038cb5d4bca3d6fe5abafd2d0aa79ab6b9cafec54b8b58037514908220.jpg" data-media-id="editor_0" data-image-id="2025072809074_febdc8038cb5d4bca3d6fe5abafd2d0aa79ab6b9cafec54b8b58037514908220" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Looking beyond two boulders"><figcaption>Chinese President Xi Jinping's visit to Nepal, the first by a Chinese head of state in 23 years. Photo: NEPALI TIMES ARCHIVE</figcaption></figure>  India’s post-earthquake blockade in 2015 still rankles. Nepalis remember that China did not support their claim to the Limpiyadhura region, and that Beijing retroactively announced that Pokhara airport was under its Belt Road Initiative (BRI) even though Nepal took a hefty loan for it. The Sino-US Cold War has also affected Nepal with the orchestrated opposition in 2021 to the $500 million Millennium Challenge Corporation (MCC) project to upgrade transmission lines and highways. After Trump, the MCC faced uncertainty but it has been continued possibly because it is seen in Washington as a counter to China’s BRI in Nepal. The lesson is that Nepal cannot expect magnanimity or charity from its big neighbours, or the United States. Every country is looking out for its own national interest, and so should Nepal by asserting its independence and improving its governance to develop the economy. “India has its own place and China has its own place in terms of their relations with Nepal,” says Indra Adhikari from Policy Research Institute. “But it is true that Nepal has not been able to leverage its relations with both neighbours.” This does not mean playing New Delhi off against Beijing, but to get both powers to be twin locomotives pulling Nepal’s economy in the same direction. What Nepal definitely cannot afford is to have the two engines tugging the country in opposite directions. Adhikari adds, “It is natural that each country sees its own interest while investing in Nepal. We should be able to establish an environment of trust for countries which want to invest.” With Nepal on the pathway to transitioning from a Least Developed Country to a developing country by November 2026, it will have to plan for loss of foreign aid and higher interest rates on loans from international agencies. This means greater emphasis on improving the foreign investment climate to create domestic jobs and boost the economy. This requires a change in the mindset of Nepal’s politicians to understand the transformed geopolitical reality, and strategise accordingly. But, says Nischal Nath Pandey: “We have changed our political system often, but our geography has not changed.”

Looking beyond two boulders

They say you can choose your enemies, but not your neighbours. This rings true especially for small nation states bordering much larger ones.
And that is also what Mao Zedong told King Mahendra in Beijing in 1967, and it is the message successive Chinese leaders have given to Nepal’s rulers ever since: be clever, don’t rock the boat, learn to live with India.&nbsp;
In Beijing in 1988, Deng Xiaoping and Rajiv Gandhi demarcated each other's &nbsp;spheres of influence: south of the Himalaya India calls the shots, and north of it (including Tibet) China does.&nbsp;
Lila Nyaichyai, who did her PhD on Chinese Public Diplomacy in Nepal from Yunnan University, says China’s main concern in Nepal is stability.
“As a country grows to become a global power, its aspirations do too,” she says. “But China hasn’t cared much about whether Nepal is a monarchy, a democracy, or a federal republic as long as it is politically stable for development.”
Nepal’s royal rulers navigated the Cold War between the Soviet Union and the United States successfully, getting both to contribute to the country’s development. But the dramatic rise of India and China as global powers, and the fact that they are rivals in Nepal’s immediate neighbourhood has made the need for balance much more critical now.&nbsp;
A template could be the way Finland survived the Cold War between next door Soviet Union and the West. It did not join the Warsaw Pact, but its reference group was the other Nordics. The country decided to keep Moscow at arms length by appeasing it — a strategy that came to be called ‘Finlandisation’.
“Finlandisation was this attitude of yielding to pressure from a big brother,” Finnish journalist and author Katri Merikallio explained to me during a recent visit to Helsinki. “Finland remained independent, but its sovereignty was narrowed. There was a price to pay. We must acknowledge the risks that such a balancing involves, both for the sovereignty of a nation but also for internal politics.”
It was a survival tactic that saved Finland from being arm-twisted by the Soviet Union, like Hungary in 1956 and Czechoslovakia in 1968. But today with the Russian invasion of Ukraine, ‘Finlandisation’ is not in vogue anymore and Finland has joined NATO.
Nepal’s strategy of ‘equidistance’ between New Delhi and Beijing is somewhat similar to how Finland survived the Cold War. But it is a little more complicated than that. Indian strategists do not like the term ‘neutrality’ to characterise Nepal’s dealings with its regional rivals China and Pakistan.&nbsp;
South Asia is now in America’s blindspot with Trump’s turbulent second term, and without Washington’s countervailing presence geopolitics has become much more slippery than Prithvi Narayan Shah’s yam analogy.&nbsp;
Back in Kathmandu, former Foreign Minister Bimala Rai Paudyal of the UML contends that despite their differences, bigger countries do come to an understanding, often at the expense of smaller neighbours. An example of this is China’s refusal to get involved in Nepal's Limiyadhura dispute with India.
“It will not be easy, but we must maintain our policy of equidistance in dealing with India and China,” Rai Paudyal told us. “We must assure both that we are not a security threat, and that Nepal’s prosperity and stability is in their national interest as well.”
Nepal is the oldest nation state in South Asia, and has survived invasions, expansionist empires, and neighbours who do not see eye to eye with each other thanks to master strategists like Jang Bahadur Rana, Chandra Shumsher and King Mahendra.
Today, Nepal is one of the few remaining open societies in Asia with a free press, and a fragile yet rambunctious democracy. Yet feckless governments with leaders unskilled to steer a safe course in a volatile region means Nepal has never been as vulnerable to outside interference as it is today (page 1).
Here in Helsinki, NATO membership has finally finished off Finlandisation. It is a lesson for Nepal about how quickly the geopolitical terrain can shift and upend a nation’s established foreign policy doctrine. &nbsp;
Nepal needs to be supple and agile, pragmatic and self-confident. This will require monumental political reform marked by greater accountability, transparency, and good governance at home.&nbsp;
In other words, secure relations with our two giant neighbours needs sturdier domestic politics.
Sonia Awale in Helsinki

Love thy neighbours

Throughout its 260-year history, Nepal has tried to keep an equilibrium between its <a href="https://nepalitimes.com/latest/political-geography-of-india-nepal-china-ties">two giant neighbours</a>. Past rulers have tried to ensure friendly relations with India and China even if the two are not exactly friendly <a href="https://nepalitimes.com/opinion/chindia?%2F">with each other</a>.&nbsp;
But just how delicate this balancing act can be was thrown into sharp relief last week in two events.&nbsp;
A Nepali was among 25 killed in an attack in Kashmir <a href="https://nepalitimes.com/editorial/nukes-in-the-neighbourhood">last month</a>, and at a seminar on regional terrorism this week in Kathmandu foreign policy wonks felt Nepal needlessly irritated India by not being more forthcoming in its condemnation of Pakistan.
Then, at the annual Kathmandu International Mountain Film Festival (<a href="https://nepalitimes.com/news/festival-of-mountain-films">Kimff</a>) Chinese documentaries on Tibet were screened under a China-funded ‘Xizang Panorama’ showcase.
There was an immediate backlash against Kimff for accepting Chinese sponsorship and the use of ‘Xizang’, the Chinese name for Tibet. The films were said to be 'colonial propaganda', and Beijing’s attempt to erase Tibetan identity, independence, and self-determination.&nbsp;
'The term "Xizang" is not merely a geographic designation—it represents China's calculated campaign to replace "Tibet" in international discourse, seeking to erase a distinct and vibrant artistic, literary and spiritual identity,' a collective &nbsp;of Tibetan filmmakers and writers wrote to Nepali Times last week as Kimff was ongoing.&nbsp;
The Nepal government in its diplomatic language has started using ‘Xizang’ to refer to Tibet, and there was speculation that the Chinese lobbied with the government to pressure Kimff to show the films on Tibet. Kimff did not respond to our request for comment.&nbsp;
“While we can advocate for the rights and identity of the Tibetan community in activism and media, the reference to Tibet in our diplomacy will remain in line with our foreign policy with regards to China,” says international relations specialist Indra Adhikari.
The terrorism seminar and the film festival controversy were just the latest examples of how Nepal’s government and civil society are being increasingly squeezed by <a href="https://nepalitimes.com/opinion/borderlines/no-man-s-land">rival neighbours</a>.&nbsp;
The rollback of Pax Americana <a href="https://nepalitimes.com/opinion/trump-s-first-month">under Trump </a>means that emerging powers China and India are filling the gap. The result: a politically-weakened Nepali state is now more subservient than ever before.&nbsp;
Nepal’s strategy of equidistance is fraying at the edges as Kathmandu is buffeted by countervailing pressure from north and south.
“<a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">Nepal’s political leadership</a> in recent times has changed the definition of ‘national interest’ to suit its own circumstance,” explains former SAARC General-Secretary Arjun Bahadur Thapa. “This means our <a href="https://nepalitimes.com/editorial/at-home-and-abroad">foreign policy</a> tilts towards one neighbour or the other depending on which party is in power.”&nbsp;
To be sure, Nepal has asserted itself from time to time, eliciting Indian ire over the Limpiyadhura dispute, and Kathmandu’s refusal to directly condemn Pakistan on the Pahalgam attack even when one of its nationals was killed.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/balochistan-to-kashmir">Balochistan to Kashmir</a>, Shyam Tekwani
New Delhi has never liked the term ‘equidistance’, and there are also some in Nepal who want it redefined, taking into account proximity, &nbsp;cultural affinity, trade and economic <a href="https://nepalitimes.com/review/how-to-reboot-nepal-india-relations">relations with India</a>.&nbsp;
“Perhaps it is time that we move beyond equidistance to a more pragmatic approach,” says Adhikari. “<a href="https://nepalitimes.com/news/nepal-s-love-triangle-with-china-and-india-impacts-investment">Nepal’s relations with India and China</a> are different in nature, and our policy could reflect that difference.”
Meanwhile, Thapa is not so sure that growing American and Western disinterest in the region is making India and China more assertive towards smaller nations. &nbsp;
He says: “It is true there is declining Western interest in this region, but the US and Europe never really had more influence in Nepal than India and China.”
Speculation is also rife about how Nepal’s two neighbours regard the clamour on the streets and cyberspace for a restoration of a Hindu monarchy. The pro-monarchy RPP and RPP-N joined forces, but amidst shrinking turnout at their rallies decided to ‘decentralise’ protests to other parts of the country.
The Indian media has given wall-to-wall coverage to <a href="https://nepalitimes.com/news/republicans-and-royalists-on-nepal-s-streets">the royal rallies in Kathmandu</a>, almost at the level of its reporting on the cricket IPL. China has not said much, and seems more interested in trying to unite Nepal’s disparate Communist parties.
India’s ruling BJP and China’s CCP have their preferences for how and who governs Nepal, but that may not mean they are working at cross purposes. Both New Delhi and Beijing would prefer the buffer state between them to be politically stable.
Indra Adhikari says that sections of the BJP could want Nepal to become a Hindu state.&nbsp;
She adds: “Some in the BJP even want the reestablishment of a <a href="https://nepalitimes.com/editorial/nepal-party-reincarnating-hindu-monarchy">Hindu monarchy</a>. But China wants a stable and amenable government, preferably led by a leftist alliance.”

Shristi Karki

National insecurity

India and Pakistan are twins separated at birth. Tensions between them have been at a hair trigger ever since independence and has erupted into full scale conflict at least four times in the past 80 years.
The 22 April terrorist attack in Kashmir that killed 25 Indian tourists and a Nepali citizen, threatens to escalate tension between the two nuclear-armed nations. India has squarely blamed Pakistan for the attacks, and Prime Minister Narendra Modi has given his military “operational freedom” to respond. Pakistan has said it has credible intelligence of an Indian military strike and its officials have promised a “full spectrum” response — a code for a <a href="https://nepalitimes.com/editorial/thinking-the-thinkable">nuclear retaliation</a>.
For Nepal, the killing of its national in the Pahalgam attack comes as another stark reminder that in conflicts from Afghanistan to Iraq, from <a href="https://nepalitimes.com/opinion/how-to-agree-an-armistice-in-ukraine">Ukraine</a> to Israel, <a href="https://nepalitimes.com/news/10-nepalis-from-one-town-fighting-in-ukraine">Nepalis are getting caught in the crossfire</a>. The last time full-scale fighting broke out between <a href="https://nepalitimes.com/opinion/peacemongers-at-india-pakistan-border">India and Pakistan</a> on Kargil in 1999, at least 22<a href="https://nepalitimes.com/here-now/india-s-trial-by-fire-for-soldiers-from-nepal?%27%5C%22="> Nepalis fighting for the Indian Army</a> were killed in action.
Three of Nepal’s immediate neighbours (China, India, Pakistan) have nuclear weapons, and they do not have good relations. With China supplying weapons, <a href="https://nepalitimes.com/editorial/war-and-warming">missile technology</a> and other support to Pakistan, this triangular friction could set off a regional conflagration.&nbsp;
<a href="https://www.nature.com/articles/s43016-022-00573-0" target="_blank">Research at Rutgers University</a> has calculated that even a week-long tactical nuclear exchange between India and Pakistan would throw up so much smoke and debris into the atmosphere that it would block out the sun for years, and lead to a collapse of the <a href="https://nepalitimes.com/news/grow-nourish-sustain-together-world-food-day">global food system</a>. This does not take into account the radioactive fallout that prevailing winds would blow up to <a href="https://nepalitimes.com/here-now/lives-on-the-line-in-the-himalaya">the Himalaya</a>, contaminating glaciers that are the sources of <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">Asia’s main rivers</a>.
The impact of <a href="https://nepalitimes.com/news/climate-breakdown-linked-to-thame-flood">climate breakdown </a>on High Asia was already ringing alarm bells about its <a href="https://nepalitimes.com/news/himalayan-icecap-melting-faster-than-thought">shrinking ice cap</a> reducing the dry season flow of water downstream. Water was going to be the next strategic commodity, geopolitical experts warned, and the next wars in Asia would be over water.
That water war is already happening. India retaliated to the Kashmir attack by suspending the <a href="https://www.nytimes.com/2025/04/24/world/asia/india-pakistan-indus-waters-treaty.html" target="_blank">Indus Waters Treaty</a> of 1960 mediated by the World Bank that has withstood at least three wars between India and Pakistan. The treaty gives India control over the three eastern tributaries of the Indus (<a href="https://en.wikipedia.org/wiki/Beas_River" target="_blank">Beas</a>, <a href="https://en.wikipedia.org/wiki/Ravi_River" target="_blank">Ravi</a> and <a href="https://en.wikipedia.org/wiki/Sutlej" target="_blank">Sutlej</a>), while Pakistan got water from the Indus and two of its western tributaries (<a href="https://en.wikipedia.org/wiki/Indus_River" target="_blank">Indus</a>, <a href="https://en.wikipedia.org/wiki/Chenab_River" target="_blank">Chenab</a> and <a href="https://en.wikipedia.org/wiki/Jhelum_River" target="_blank">Jhelum</a>.
Pakistan was assured of 70% of the annual flow, and India could use a reasonable amount of water for<a href="https://archive.nepalitimes.com/news.php?id=15231"> irrigation and hydropower</a>. &nbsp;Within days of its threat, India stopped water flowing down to Pakistan from the Chenab river and is reportedly preparing to do the same on the Jhelum.
The sabre-rattling has reached a crescendo. Besides threats and counter-threats there are also symbolic drills, with the Indian Air Force practicing landing on an expressway in Uttar Pradesh by its Rafale, Su-30 and Jaguar fighter jets to demonstrate ‘operational readiness’. In response Pakistan test-fired its Abdali ballistic missile that can carry a nuclear warhead and has a range of 450km.&nbsp;
The danger is that with ultra-nationalist rhetoric and the beating the war drums by both sides, India’s government and Pakistan’s military may have to ‘do something’ to appease domestic public opinion. But any tactical strike, an artillery exchange, or territorial incursion could quickly escalate out of control.
Expecting an Indian retaliation for the Pahalgam killings, Pakistan is using<a href="https://nepalitimes.com/opinion/interfaith-collaboration-for-nuclear-disarmament"> nuclear deterrence </a>and warning of “catastrophic consequences”. The two neighbours came close to a nuclear exchange in 2019 after an attack on the Indian military in Kashmir, and prompt international intervention led by the United States cooled tensions.&nbsp;
This time, the <a href="https://nepalitimes.com/news/trump-shock-wave-hits-nepal">Trump administration</a> is too distracted and not as engaged. Pakistan has denied it was responsible for the terrorist attack and called on Washington to stop a possible Indian retaliation. India and Pakistan have stopped overflights by each other’s airlines, and some international carriers have even stopped flying over Pakistan fearing an air war.
Washington, Beijing, the UN and the EU have all urged restraint. Iran, which has good relations with both India and Pakistan has sent its foreign minister to urge both countries not to go into a tit-for-tat war. Iran has its own nuclear flashpoint to worry about with tensions in Israel, &nbsp;Yemen and Syria.
India and Pakistan both share similar problems of joblessness, <a href="https://nepalitimes.com/here-now/why-nepal-s-poverty-rate-is-stuck">poverty </a>and <a href="https://nepalitimes.com/here-now/climate-change-new-threat-to-nepal-s-rhinos">environmental threats</a>. Neither side needs the threat of a senseless war, and we in the neighbourhood do not need it either.&nbsp;
Kunda Dixit
This Editorial is brought to you by <a href="https://nepalitimes.com/" target="_blank">Nepali Times</a>, in collaboration with <a href="https://inpsjapan.com/en/" target="_blank">INPS Japan</a> and <a href="https://sgi-peace.org/" target="_blank">Soka Gakkai International</a>, in consultative status with UN ECOSOC.

Nukes in the neighbourhood

The armistice agreement that ended the Korean War in 1953 has been mentioned as a possible model for how to end the fighting in Ukraine. This makes sense. The <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trump administration</a>, however, seems to opt for a quick deal like the 1973 Paris agreement on Vietnam or the Minsk agreements of 2014–15, combining “ceasefires in place” with vain prospects of subsequently reaching a genuine <a href="https://nepalitimes.com/news/restorative-justice-for-peace-building">peace agreement</a>.
One lesson from the negotiations that led to the Korean armistice is that patient diplomacy is needed to end a stalemated war. When talks began in July 1951, the impatient Mao Zedong estimated that two weeks would be enough to conclude. The negotiations instead took two years.
The result was a long text, detailing the exact border line and establish a demilitarised zone across the peninsula under UN supervision. The stated intention was to follow up with a peace agreement. This came to nothing. The conference established for the purpose in Geneva decided instead to reach an agreement on Indochina, dividing Vietnam for the next 21 years and replacing the French with <a href="https://nepalitimes.com/opinion/the-world-9-11-made">American military forces</a>.
The biggest difference between the Korea and Ukraine wars is that the <a href="https://nepalitimes.com/opinion/comment/ukraines-lessons-for-sandwiched-nations-like-nepal">Ukrainians are fighting alone</a>, with only external military support, while the Korean War was primarily fought by American and Chinese forces on Korean soil.
Back then, the armistice agreement was concluded by the commanders of the US-dominated UN forces, the Chinese “volunteers”, and the North Korean army, against the wish of Syngman Rhee’s government in Seoul. He wanted to continue the fight for national reunification. Only after being offered a defence pact with the US did he accept the negotiated outcome, yet did not sign the agreement. South Korea has never signed the armistice that has prevented new <a href="https://archive.nepalitimes.com/news.php?id=2664">outbreaks of war</a>.
The key similarity between the Korean and Ukrainian wars is the prominent role of the USA as a supporter of the governments in Seoul and Kyiv. In both cases a condition for ensuring that an armistice can hold is that the US take responsibility for any agreement and joins up with others in providing security guarantees.
Read also: <a href="https://nepalitimes.com/opinion/is-the-time-ripe-for-an-end-to-the-ukraine-war">Is the time ripe for an end to the Ukraine war?</a> &nbsp;Herbert Wulf
A key reason why war has not resumed in Korea for the last 72 years is the continued US presence in the south. American troops act as a "tripwire," ensuring that any North Korean invasion would lead to a war it would surely lose. For the same reason, the US needs to have boots on the ground in Ukraine.
Another similarity is that any attempt to conclude a genuine peace agreement is futile. A genuine peace in Korea would require that North and South agree either on national reunification or on recognising each other as independent states, just as East and West Germany did in 1973.
A peace agreement was even more unthinkable for Syngman Rhee and Kim Il Sung in 1953–54 than it is for Seoul and Pyongyang today. It is just as inconceivable that President Vladimir Putin will withdraw voluntarily from Donbas and Krym as it is for President Volodymyr Zelensky to conclude a definitive peace agreement that does not recognise Ukrainian sovereignty to its entire territory.
To maintain the principle of national sovereignty and territorial integrity, it is also crucial for Europe and the UN that Russia’s violation of Ukrainian sovereignty is not internationally recognised. Therefore, just as the two Koreas, Russia and Ukraine must settle for something less than a peace treaty, namely an armistice. This may end the fighting and could save hundreds of thousands of lives but will not establish peace.
An armistice is not a simple ceasefire, where military forces are supposed to remain where they happen to be situated when the agreement is made. For a Ukrainian armistice to be respected, the Russian and Ukrainian forces must withdraw to either side of a clearly delineated demilitarised zone. This is complicated by the fact that the front lines are so long.
The easiest compromise would be for Ukraine to let Russia retain control over Krym, while Russia withdraws from Donbas. Third parties should put pressure on Moscow and Kyiv to accept that neat solution. To soften the pill, Ukraine could guarantee a high degree of local autonomy for Donetsk and Luhansk.
International monitoring with the use of satellite surveillance along the entire border would be needed. If one or both parties were to mobilise combat forces, launch drone attacks, or place rocket launchers on alert, warning signals should be triggered and international security guarantees enforced by robust multi-national forces.
A final similarity between Korea 1953 and Ukraine 2025 armistice is that both sides must abstain from any political interference at the other side of the agreed boundary. Russia and Ukraine must remain fully sovereign and independent states.
Any rapprochement between the two Korean states continues to depend on Seoul’s ability to convince Pyongyang that it does not seek regime change in the north and on the willingness of Kim Jong Un to abstain from provocative <a href="https://nepalitimes.com/editorial/thinking-the-thinkable">missile tests</a> and vocal threats.&nbsp;
Putin apparently wants an agreement to include a provision for new elections in <a href="https://nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard">Ukraine</a>, so he can interfere in Ukraine’s internal affairs and remove Zelensky from power. This is a destructive demand that should be consistently rejected by any mediating or facilitating party to talks. The Ukrainians must decide for themselves when to lift their state of emergency and hold<a href="https://nepalitimes.com/news/is-democracy-too-expensive-for-nepal"> democratic elections</a>.
<a href="https://nepalitimes.com/news/trump-shock-wave-hits-nepal">President Trump</a> has put pressure on Ukraine to agree to a ceasefire and has conceded on Ukraine’s behalf that it cannot get back all its lost territory or obtain NATO membership. He should now concentrate his efforts on convincing both sides to engage in negotiations for a strongly guaranteed and highly monitored armistice rather than a quick and fragile ceasefire or a dodgy settlement allowing one side to interfere in the other.
Stein Tønnesson is Senior Research Fellow (Peace and Security in Northeast Asia) at the Toda Peace Institute and Research Professor Emeritus, Peace Research Institute Oslo (PRIO).
This article was issued by the Toda Peace Institute and is being republished from <a href="https://toda.org/global-outlook/2025/how-to-agree-an-armistice-in-ukraine-lessons-from-korea.html">the original</a> with their permission.

How to agree an armistice in Ukraine

Last month, European Commission President Ursula von der Leyen announced that the first official <a href="https://nepalitimes.com/here-now/reaction-to-wang-yi-s-nepal-visit-in-chinese-media">foreign visit </a>of the commission in her second term would be to India. On the same day, Marco Rubio held his first bilateral meeting as US Secretary of State with India’s minister of external affairs, Subrahmanyam Jaishankar.
Prime Minister Narendra Modi’s two-day visit to Washington last month confirmed his country’s rising international profile. The visit ended with the promise of what Modi called a US-India “mega partnership.” He has committed to double trade with the US by 2030, increase <a href="https://archive.nepalitimes.com/regular-columns/half-full/A-carbon-neutral-Nepal-is-possible-clean-Nepal,1064">oil and gas imports</a>, and expand US military sales to India.
India is now the fastest-growing major <a href="https://nepalitimes.com/opinion/comment/how-nepal-can-avert-an-economic-crunch">economy</a>, with the IMF forecasting a 6.5% increase in GDP this year. India is expected to overtake Japan and Germany to become the world’s third-largest economy by 2030.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/india-s-election-and-its-economic-future">India’s election and its economic future</a>, Raghuram G Rajan
Despite its <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">vast potential</a>, India has long been overlooked by the West, both <a href="https://nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard">economically</a> and <a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">geopolitically</a>. But a fundamental global realignment is now underway. America’s ‘unipolar moment’ has given way to an era of great-power competition that, unlike during the Cold War, features demands by emerging and developing economies for a more <a href="https://nepalitimes.com/banner/making-nepal-accessible-to-all">inclusive </a>and representative multilateral system.&nbsp;
In this multipolar age, both the US and Europe see India, a neutral <a href="https://nepalitimes.com/editorial/no-binary-foreign-policy?fb_comment_id=3583384368393672_3586424038089705">foreign-policy </a>actor and dynamic<a href="https://archive.nepalitimes.com/news.php?id=18861"> emerging economy</a>, as vital to the future of their strategic priorities.&nbsp;
A founder of the Non-Aligned Movement, India has plenty of experience navigating precarious moments in <a href="https://archive.nepalitimes.com/news.php?id=4896">world affairs</a>. During the Cold War, it skillfully balanced its policies toward <a href="https://nepalitimes.com/here-now/america-nepal-and-the-royal-coup-qedzifz9">the US and the Soviet Union</a>.&nbsp;
When it engaged with <a href="https://nepalitimes.com/opinion/so-far-so-good/the-vagaries-of-fate">the Soviet Union</a>, from which it received considerable <a href="https://nepalitimes.com/banner/civil-military-synergy-in-disaster-management">military assistance</a>, it calibrated its approach to offset US support of Pakistan, without taking sides in the <a href="https://nepalitimes.com/opinion/the-rich-get-richer-and-more-powerful">great-power competition</a>.&nbsp;
India has since maintained this pragmatic balancing act, adapting its foreign policy to a shifting geopolitical landscape. Today, that means recognising its potential to shape global affairs, including by playing a leading role in building an efficient, realistic, and inclusive multilateralism.&nbsp;
This is reflected in Modi’s pursuit of a more assertive, internationalist foreign policy. Beyond building new partnerships and strengthening old ones, Modi has sought to increase <a href="https://nepalitimes.com/news/india-s-hindutva-politics-influencing-nepal">India’s influence </a>in traditional and emerging multilateral fora. In 2023 alone, India held the presidency of both the G20 and the Shanghai Cooperation Organisation (a Chinese creation, comprising nine Middle Eastern and Asian countries).&nbsp;
India plays a leading role in the BRICS, and is characteristically nuanced: whereas Russia and, to a significant extent, China see themselves as disruptors of the existing order, India views itself as a reformer. This enables it to maintain strategic flexibility as it advances its interests.&nbsp;
<a href="https://nepalitimes.com/news/india-china-rail-race">India’s relationship with China</a> is complicated by other factors. While the countries work together in some fora, they are also locked in protracted<a href="https://nepalitimes.com/news/india-bangladesh-border-talks-have-lessons-for-nepal"> territorial disputes</a> and a <a href="https://nepalitimes.com/news/the-race-for-shital-nibas">competition for leadership</a> in the so-called Global South.&nbsp;
India’s growing global clout, including its appeal to Western powers, stems in large part from its ability to act as a counterweight to China. It is indispensable to the Quad alliance with Australia, Japan, and the US, a grouping that is officially focused on <a href="https://nepalitimes.com/opinion/the-quad-maritime-security-and-climate-change">maritime security</a> and economic cooperation, though its members clearly seek to provide a buffer against China in the <a href="https://nepalitimes.com/editorial/between-two-oceans">Indo-Pacific region</a>. It is thanks to India that the Quad is not viewed as just another Western vehicle.&nbsp;
Modi has sought to bolster India’s Southern credentials, including by highlighting its status as the “mother of democracy”. By framing <a href="https://nepalitimes.com/news/is-democracy-too-expensive-for-nepal">democracy</a> as intrinsic to Indian civilisation, rather than a colonial legacy, he aligned India with ‘middle powers’ seeking to redefine global governance on their own terms.&nbsp;
To be sure, Modi has moved India away from the secular and pluralistic values that had flourished after <a href="https://nepalitimes.com/news/the-goal-is-empowerment-and-independence-of-women">independence</a>, in favour of assertive <a href="https://nepalitimes.com/news/unconventional-convention">Hindu nationalism</a>. So many international indices have downgraded India’s democratic status that he is now seeking to create his own.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/borderlines/demodification-of-india">Demodification of India</a>, Chandrakishore&nbsp;
Modi is the second leader of independent India (after Jawaharlal Nehru) to be elected to three consecutive terms, and remains a dominant force in <a href="https://nepalitimes.com/here-now/india-s-faith-in-politics">Indian politics</a>.&nbsp;
And at a time of <a href="https://nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">rapid geopolitical change</a>, he is committed to leveraging his position, and India’s profound strengths, to turn it into a global player. India has long had the potential to be an active shaper of international affairs. It has now arrived. &nbsp;&nbsp;© Project Syndicate
Ana Palacio, a former minister of foreign affairs of Spain and former senior vice president and general counsel of the World Bank Group, is a visiting lecturer at Georgetown University.

India has arrived

Till about 200 years ago <a href="https://nepalitimes.com/news/india-china-rail-race">China and India</a> were the world’s largest economies, and that helped Kathmandu prosper as an entrepôt between the two. We have now come full circle. China and India are ascendant once more, and the two giant neighbours can be the locomotives to pull Nepal along if we play our cards right. That is the message in former Kantipur editor <a href="https://nepalitimes.com/review/two-takes-on-the-nepal-india-nexus">Sudheer Sharma</a>’s omnibus edition of two books that explore the <a href="https://nepalitimes.com/opinion/so-far-so-good/nepals-history-through-art">historical</a> and <a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">geopolitical dimensions of Nepal</a>’s relations with China.&nbsp; The two Nepali language books, भिक्षु, व्यापार र बिद्रोह (Monks, Trade and Rebellion) and हिमालपारिको हुरी (Trans-Himalayan Hurricane) follow Sharma’s previous work प्रयोगशाला (Laboratory) which looked mainly at Nepal-India relations and was translated into English as The Nepal Nexus. The first book is predominantly about Kathmandu’s historical links with Lhasa, and by extension <a href="https://nepalitimes.com/editorial/beijing-30-zak6iu1w">Beijing</a>. Vajrayana Buddhism played a significant role in bringing the two sides of <a href="https://nepalitimes.com/here-now/lives-on-the-line-in-the-himalaya">the Himalaya</a> together, allowing social and trade relations to thrive.&nbsp; Princess Bhrikuti, King Narendra Dev and Arniko were prominent historical figures, but thousands of lesser known <a href="https://archive.nepalitimes.com/article/nation/monks-and-nuns-help-in-rescue-and-relief,2320">monks</a>, traders, and travellers also played their part in cementing Kathmandu-Lhasa ties. These connections were so strong that they endured three wars that the <a href="https://nepalitimes.com/banner/beginning-of-the-end-of-the-gorkha-empire">Gorkha Kingdom</a> and <a href="https://nepalitimes.com/here-now/gift-a-goat-to-tibet-nomads-in-nepal">Tibet</a> fought against each other in which <a href="https://nepalitimes.com/here-now/neither-side-lost-both-sides-won">Chinese emperors</a> sent military help to fight off the Nepalis. Although<a href="https://nepalitimes.com/news/nepal-assam-connection-revived"> Nepal’s historic connections</a> with Tibet waned after the Chinese annexation of the plateau in the 1950s, it is on that foundation that present day <a href="https://nepalitimes.com/news/nepal-china-agreements-are-stuck">Nepal-China relations</a> are built.&nbsp; Till today, Nepal is the only country with a consulate in Lhasa, and the only <a href="https://nepalitimes.com/news/kathmandu-airport-to-cut-flight-hours">international flights</a> from Lhasa are to Kathmandu. But as Sharma notes, even back then, Nepal’s proximity with northern India figured importantly in its<a href="https://nepalitimes.com/editorial/home-is-where-the-heart-is-yqkvf5vx"> socio-economic </a>and cultural connections with <a href="https://nepalitimes.com/banner/there-are-muslims-in-tibet-too">Tibet</a>. Nepal was the corridor for the exchange of trade and faith between the Ganga plains and <a href="https://nepalitimes.com/banner/it-is-getting-hotter-on-the-roof-of-the-world">the Tibetan plateau</a>. The road between Patna and Potala, Banaras and Beijing passed through <a href="https://nepalitimes.com/banner/bringing-silicon-valley-to-kathmandu-valley">Kathmandu Valley</a>. Sharma traces this socio-political landscape to explain how it went on to shape the country’s modern day relations with the neighbours.&nbsp; There were 2,000 Buddhist monks in Nepal during the reign of Lichhavi king Amshuverma, and Arniko established himself in the court of Kubulai Khan and took eight years to build the massive White Dagoba in Beijing. Read also: <a href="https://nepalitimes.com/here-now/the-life-and-times-of-arniko">The life and times of Arniko</a>, Sewa Bhattarai While Mahayana Buddhism spread from India, through Nepal to China and beyond, it was <a href="https://nepalitimes.com/editorial/crony-communism">Communism</a> that later came from China to Nepal. King Mahendra had great geopolitical savvy and navigated the complicated geopolitics of the <a href="https://nepalitimes.com/here-now/land-reform-in-cold-war-nepal">Cold War</a> to cultivate relations with both Nehru and Mao, while keeping both at arms length. Mahendra wrested aid to build infrastructure like the Kodari and Prithvi Highways from China, but also from India, the Soviet Union and the United States. In fact Nepal was only the eighth non-Communist country to receive foreign aid during Mao’s China.&nbsp; Read also: <a href="https://nepalitimes.com/editorial/the-new-equaliser">The new equaliser</a> But when <a href="https://nepalitimes.com/news/14-years-after-conflict-no-closure-in-nepal">Nepal’s Maoists</a> launched an armed struggle against <a href="https://nepalitimes.com/here-now/if-birendra-was-alive-nepal-could-still-be-a-monarchy">the monarchy</a>, China’s official media never called them ‘Maoists’. As far as Beijing was concerned, Mao was dead in his mausoleum. It was only later under <a href="https://nepalitimes.com/here-now/what-is-xi-jinping-s-big-surprise">Xi Jinping </a>that China warmed up to Pushpa Kamal Dahal’s ‘Maoist’ label.&nbsp; The first book takes us to the point when the Constituent Assembly <a href="https://archive.nepalitimes.com/article/from-nepali-press/Ftnp-abolishing,624">abolished Nepal’s monarchy</a> in 2008, and the second book, as the name suggests, looks at how the whirlwind rise of China has buffeted Nepal.&nbsp; Sharma encourages readers to abandon <a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/Prithvi-Narayan-Shah-a-visionary-leader,1102">Prithvi Narayan Shah</a>’s famous metaphor of Nepal being ‘yam between two boulders’ to it being more like a ‘narrow canyon’ between two big <a href="https://nepalitimes.com/banner/why-we-climb-mountains">mountains</a>, emphasising the challenges of maintaining sovereignty amid geopolitical pressures not just between India and China, but increasingly, with the United States. We have to see how the new Sino-US Cold War will evolve under <a href="https://nepalitimes.com/editorial/trump-s-second-coming">the second Donald Trump presidency</a>. The <a href="https://nepalitimes.com/news/the-great-game-2nd-half">suspension of the MCC</a> this week will be an opening for <a href="https://nepalitimes.com/editorial/crony-communism">China to push its own BRI infrastructure projects</a> in Nepal. It is not very helpful to see Nepal as being ‘squeezed’ between its giant neighbours, but leverage the country’s geostrategic location by being a connector between India and China. Both neighbours, naturally, have their own interests in Nepal as a buffer state, but both want stability. Kathmandu’s strategy should be to take advantage of the economic growth of its neighbours. Read also: <a href="https://nepalitimes.com/news/poor-cash-rich-nepal">Poor cash-rich Nepal</a>, Sonia Awale &nbsp; Both books look at the arrival of Tibetan refugees into Nepal from the late 1950s, and how this resulted in geopolitical push and pull. Although American support for Khampa guerrillas was cut off after Henry Kissinger’s secret visit to Beijing in 1971, US and western support for Tibetans in exile resumed after that.&nbsp; Nepal allowed the<a href="https://nepalitimes.com/news/mindfulness-about-bhutan-s-refugees"> refugees</a> to stay and work here, but under Chinese pressure Kathmandu adopted stricter measures — including <a href="https://archive.nepalitimes.com/news.php?id=2754">deporting Tibetans entering Nepal</a>. The Tibetan exile community remains one of Beijing’s biggest concerns in Nepal. Successive Kathmandu governments have been pressured to curb ‘anti-Chinese activities’ like celebrating the Dalai Lama’s birthday and other anniversaries.&nbsp; Sharma notes that so far Nepal has deftly balanced its support for refugees while keeping relations with Beijing on an even keel. It is significant that China has been surprisingly understanding of the presence of<a href="https://nepalitimes.com/banner/the-start-of-the-anglo-gorkha-war"> Gorkha soldiers from Nepal</a> in the Indian Army along the disputed border where India and China fought a war in 1962, and after which there have been frequent skirmishes.&nbsp; The two books should be read chronologically so as to track the trajectory of historical Nepal-Tibet ties right up to present-day Nepal-China relations. The most relevant concern for bilateral relations today, as Sharma points out, is <a href="https://nepalitimes.com/opinion/how-nepal-can-avert-an-economic-crunch">Nepal’s economic independence</a>, <a href="https://archive.nepalitimes.com/news.php?id=15973">sovereignty</a>, and role in a <a href="https://nepalitimes.com/opinion/guest-column/nepal-in-the-new-world-order">transformed world order</a>. &nbsp;&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250224140256_38f09c2f6dc3b7c79892cf556976fa9f7b3a2f43fb53bd7a248a6c6af3ba4715.jpg" data-media-id="editor_37" data-image-id="20250224140256_38f09c2f6dc3b7c79892cf556976fa9f7b3a2f43fb53bd7a248a6c6af3ba4715" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Sudheer Sharma 1"> </figure>  &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250224140256_c6eb78b8f59cfda4b3dae582212306fd3ea25b1973d554fdb7579b9d8f345969.jpg" data-media-id="editor_38" data-image-id="20250224140256_c6eb78b8f59cfda4b3dae582212306fd3ea25b1973d554fdb7579b9d8f345969" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Sudheer Sharma 2"> </figure>  &nbsp;

A past foretold

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

The final investigation report on the crash of a Saurya Airlines jet on 24 July 2024 at Kathmandu airport has revealed flaws in the carrier’s technical operation procedures, poor monitoring by the Civil Aviation Authority of Nepal (CAAN) and gaps in the airport’s emergency response. Eighteen people including a child were killed, and only the captain survived as the plane plunged seconds after takeoff, crashing within the airport perimeter. This was the latest in a series of aircraft accidents in previous years, and further tarnished Nepal’s already poor aviation safety record and contributed to the country being retained in the EU’s air safety list. &nbsp;&nbsp;&nbsp; The circumstances in the Saurya crash were different from the Yeti Airlines crash in Pokhara in January 2022 that killed all 72 on board, and two Tara Air crashes in February 2016 and May 2022 on approach to Jomsom that together claimed 45 lives. However, all four tragedies were a result of negligence of carriers and crew, failure to follow procedures, regulatory slackness, and overconfidence. The Saurya crash, especially, was a glaring example of how an ailing airline broke its own rules to allow passengers, including non-employees, a joy ride to Pokhara on a maintenance ferry flight. CRASH REPORT The Final Investigation Report prepared by the Aircraft Accident Investigation Commission and released on the first anniversary of the crash last week carried a long list of rules that were ignored or broken, and of regulatory failure. The first mistake was to cram spares, tools and inflammable chemicals needed for the aircraft’s C-Check in Pokhara into the cargo hold flouting its own ground handling procedures.&nbsp; There was no check-in of passengers, some of whom were not even employees – even though regulations say only flight and maintenance crew should be on board a maintenance positioning flight. Many brought their own luggage into the plane and stored it unsecured in the cabin. There was no flight attendant to give a safety briefing to passengers. The load and trim charts given to the flight crew were rough estimates, and the total takeoff weight of the plane was 18,300kg plus or minus 200 kg. That would still have been all right, but there was a glaring mistake in the speedchart Saurya pilots were using to calculate the minimum takeoff speed (known as VR), and it had been wrong ever since the 21-year-old aircraft entered service with the airline in 2017. FAULTY DATA&nbsp; The Commission probed Flight Data Recorder inputs from previous takeoffs of the Canadian-built CRJ200-LR in 2023-2024 and found that the undetected error in the speedchart had caused the plane to pitch up at an abnormal rotation rate at least 18 times on previous takeoffs.&nbsp; Any rotation rate more than 3°/sec is regarded as unusual. But on at least two occasions, this aircraft with tail number 9N-AME had rotation rates of 5.8°/sec and 5.5°/sec, the second one was when the pilot who survived was flying in March 2024.&nbsp; On this particular day, the plane’s rotation rate was 6.5°/sec, causing it to go into a deep stall soon after takeoff, the Commission report said. Essentially, the plane was not flying fast enough down the runway to take off safely.&nbsp; It is not yet clear whether excess weight, unsecured luggage, wrong centre of gravity were also factors, but relying on a faulty speedchart for the given takeoff weight, the captain flying pulled back on the yoke before the plane had reached takeoff speed and at a pitch angle that was too steep. The investigation report says the plane then went into a deep stall and started banking right with the stick shaking. At this point, the flight officer on the right hand seat is heard on the cockpit voice recorder saying: “Whoa, whoa, whoa. Sir, Sir, Sir…” It then banked left before the pilot flying turned the plane sharply to the right again in an evasive action to avoid the parking aprons of the international and domestic terminals. Had he not done so, there would have been a disaster of a much greater magnitude at Kathmandu airport that day. The plane scraped the runway with its right wingtip, collided with a container having helicopter spare parts, and plunged into a gully east of the runway, exploding in a fireball. The investigation also noted that the impact forces seemed to be survivable for some occupants. The fire trucks took unnecessarily long to reach the site even though it was inside the airport perimeter. The absence of an ICAO-standard runway strip, inadequate rescue drills, lack of training, and a blocked emergency service gate leading to the crash site were cited as other factors. &nbsp;&nbsp; <h2>Timestamp of a Disaster</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725.jpg" data-media-id="editor_0" data-image-id="20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725" data-rendition-name="original" width="778" height="826" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:10:34 - The Saurya Airlines CRJ200 on the takeoff roll from runway 02. It had a takeoff weight of about 18,300kg, but the pilot’s speedcard had a previously undetected mistake about the minimum takeoff speed. 11:10:55 -The plane with tail number 9N-AME goes into deep stall soon after takeoff because it does not have enough speed to lift its weight. The plane also has an abnormally steep nose-up attitude.&nbsp; 11:11:03 - Without enough speed to generate lift, the plane banks right, then left and right again in CCTV photos taken from the domestic apron (below). If it had not banked right, it could have hit the aprons and terminal buildings. Seen parked is Saurya’s other CRJ200 with tail number 9N-ANM.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd.jpg" data-media-id="editor_1" data-image-id="20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd" data-rendition-name="original" width="770" height="555" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:11:08 - The plane scrapes the runway with its right wingtip, and falls into the gully. The captain is thrown off the left side of the cockpit and survives. 11:11:15: Plane explodes in a fireball inside the airport perimeter. Firefighters take time to reach the site because of lack of access road and a blocked gate. Read the full investigation report <a href="https://www.tourism.gov.np/files/9N-AME%20AIC%20Final%20Report.pdf">here</a>.

Flouting rules caused Saurya tragedy

American artist Peter Makela was in Nepal in 2022 on a Fulbright scholarship when he experienced the Matya festival in Patan in which devotees made the rounds of the city’s shrines.&nbsp;
He joined the procession, walking through 2,600 stupa and 140 bahal of the town. That immersion left a lasting impression.
As part of Gallery Mcube’s international residency program in Patan, he put his inspiration to canvas in the exhibition Yala Yatra: Walking, Working, Worshipping. The exhibition also coincides with this month’s Matya festival.&nbsp;
Makela has visited Nepal often in the past 11 years but he mostly stayed in and spent his time around Boudha. “This time I stayed in Patan, put the sites I wanted to visit on my map, and off I went,” he tells us. “Each of my artwork is inspired by the stupas and shrines in Patan that I visited.”
The stupa and Ganesh are recurring motifs in his watercolours, and the elephant gods are located in chaityas — reflecting the interplay and blending of the Hindu and Buddhist faiths in Kathmandu Valley.&nbsp;
The stupas and Ganesh are painted in vivid red, yellow, blue and green against abstract backgrounds meant to represent the sky.
“I use the sky as a backdrop because the sky has no border,” says Makela. “The four colours represent the four elements, the different Buddha families and also lights bouncing off of a rainbow.”
The use of just four colours for all the artwork stands out, and combined with the absence of heavy canvases, frames or stands render Makela’s art striking in its simplicity.&nbsp;
The Ganesh is always holding something and the art also portrays the elephant god’s sacred vehicle, the mouse.
While his vibrant stupas and Ganesh reflect the tangibility of Patan’s tradition and heritage, it is as if the backdrops with their shades of grey and red and yellow capture the soul of the city’s shrines.
“If you look closely, there is a sense of form and formlessness at the same time,” he says.&nbsp;
Makela walked 108 kora around the shrines during his exploration of the town, and in the process developed a spiritual connection with Patan’s heritage and traditions.&nbsp;
The exhibition connects with visitors on a deeper, more spiritual, level as well. And with it, they feel a sense of pride as well as the need to urgently preserve Patan’s heritage for future generations.
“Peter’s inclination and approach towards Nepali art and culture is fascinating, and it reflects in his work,” says Mcube curator Manish Lal Shrestha, whose international artist residency program promotes Nepal’s cultural heritage. &nbsp;&nbsp;
Yala Yatra: Walking, Working, Worshipping
1-5 August&nbsp;
10AM-7PM
Gallery Mcube, Patan

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