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.

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India has arrived

It has been four days since Donald Trump officially re-entered the White House, and he has already signed executive orders and pardoned dozens of his storm troopers. The best thing you can say is that at least he keeps his promises.
<a href="https://nepalitimes.com/news/trumpet-call">America’s election</a> is not just about the United States. The rest of the world does not vote for American presidents, but what they do and do not do has far-reaching consequences for the planet. Quitting the climate deal in the middle of the Los Angeles wildfire calamity, and dropping out of the World Health Organization (WHO) as the world prepares for the next pandemic is not even in America’s own self-interest.
The presence at the swearing in of tech billionaires, who were seated in front of Trump’s own cabinet picks, rammed home the point that America is now an oligarchy. The tech and business world have fallen in line, with global implications. Meta’s announcement that it will stop fact-checking on Facebook and Instagram will impact Nepali society and politics .&nbsp;
Trump spoke with Chinese president Xi Jinping before his inauguration, and it seems to have been a meeting of minds between the two authoritarians: the TikTok ban was immediately halted. For all the bluster and brinkmanship, those threats against China appear to be just bargaining.&nbsp;
Trump invited President Xi for his inauguration, who sent his deputy Han Zheng. India’s External Affairs Minister S Jaishankar was also present.&nbsp;
For Nepal, the impact of Trump’s second term will be governed by how US relations with India and China develop in the next five years. Having said that, the US Embassy in Kathmandu has always held importance beyond Nepal to serve as a Tibet listening-post. If the Trump-Xi bonhomie grows, it will affect US support for the Tibet freedom movement, and the Dalai Lama succession question.
On India, the Trump administration is expected to continue Joe Biden’s strategy of holding a slightly reluctant India in its Indo-Pacific embrace to counter China’s increasing economic and military influence in the region.&nbsp;
Trump has not followed through on his threats of tariffs on Chinese imports from “day one”. This suggests a less hostile and more pragmatic approach towards Beijing. That did not mean he held back criticism of China in his speech: notably when he blamed China for being a big polluter, and not paying more to WHO.&nbsp;
“The United States will not sabotage our own industries while China pollutes with impunity,” Trump said after announcing the withdrawal from the Paris climate agreement and revoking the Biden administration’s EV mandate.&nbsp;
It is true that China has become the world’s largest greenhouse gas emitter, although in per capita terms it is still much below the US. China also leads in global renewable energy efforts, it is the biggest manufacturer and exporter of EVs, and has made photovoltaics, lithium batteries and wind turbines affordable to the world.
One can dismiss territorial claims on Panama, Greenland and the ‘Gulf of America’ as deranged, but his “drill, baby, drill” and “frack away, Pennsylvania” all promise to keep America as the biggest producer of fossil fuels. &nbsp;
As a consequence, America itself will see more intense hurricanes, coastal erosion, wildfires and weather extremes. But it will be countries like Nepal at the frontlines of the climate emergency that will pay the heaviest price.&nbsp;
Last year was the warmest year on record as global temperatures exceeded 1.5°C above pre-industrial level for the first time – that target was set to be met by 2050 in Paris ten years ago. Nepal has experienced its warmest January yet this year, and the wildfire season has started early.
Another direct impact on Nepalis will be Trump’s executive order to end birthright citizenship for children of undocumented immigrants. The crackdown at the Mexican border will affect hundreds of Nepalis taking the backdoor routes to reach America. Stricter immigration will also affect tens of thousands of Nepalis who are currently in the US or are planning to go study there.&nbsp;
Budget cuts of USAID for reproductive health, human rights and social welfare, and US withdrawal from being the largest donor of WHO will mean less funding for healthcare and the social sector in Nepal.&nbsp;
Washington will further lose its moral high ground in Nepal on issues like transitional justice, human rights, democracy and press freedom. Nepal was already feeling less pressure from the West, and it is now steadily aligning itself with curbs in resurgent India and China.&nbsp;
It will be even more hypocritical for the US to espouse freedom and democracy in the rest of the world after its refusal to call Israel out on its war crimes in Gaza. Trump will take credit for the Gaza ceasefire, and will lean on Ukraine to accept peace terms with Russia.
By the looks of it, Trump is just getting started.&nbsp;
Shristi Karki

Trump’s Second Coming

There is cautious optimism after the Indian election results that the semi-comatose <a href="https://www.saarc-sec.org/index.php/media-centre/press-releases" target="_blank">South Asian Association of Regional Cooperation (SAARC)</a> can be revived. The Kathmandu-headquartered bloc has been in limbo since November 2016, when Pakistan was set to host its 19th Summit, but India pulled out after <a href="https://www.thehindu.com/news/national/Militants-attack-Army-headquarters-in-Uri-near-LoC/article55941862.ece">an attack on its military in Kashmir</a> which it blamed on Pakistan. "Bilateral grievances should not stand in the way of advancing the cause of a regional organisation,” says Arjun Bahadur Thapa, who was Secretary General in 2014 when the last SAARC summit was held in Kathmandu. ”India’s foreign policy is not dictated by politicians, but by its powerful bureaucracy. Modi's decreased political clout may dent his confidence on the global stage, but will most likely not impact India’s stance towards Pakistan, or SAARC." In the past 10 years, New Delhi has bypassed SAARC to pivot eastwards through overlapping sub-regional fora like BBIN (Bangladesh, Bhutan, India, Nepal Initiative) and <a href="https://www.bimstec.org">BIMSTEC</a> (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) that includes Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.&nbsp; The new SAARC Secretary General Golam Sarwar from Bangladesh has been touring South Asian capitals to try to resuscitate the regional organisation. This week he was in <a href="https://www.saarc-sec.org/index.php/press-release/354-the-foreign-minister-of-sri-lanka-reaffirms-sri-lanka-s-unwavering-commitment-to-saarc">Colombo</a>, after visiting <a href="https://www.saarc-sec.org/index.php/press-release/348-secretary-general-s-engagements-in-new-delhi-and-islamabad">Islamabad and New Delhi</a>. “To interpret the recent elections in India as a defeat of the BJP and the weakening of PM Modi will be a faulty approach to suggest a revival of the SAARC process,” says Nishchal Pandey at the Centre for South Asian Studies in Kathmandu. “India pays the biggest chunk of the annual SAARC budget and it is therefore also in the interest of Indian taxpayers to see that a Summit is held." Indeed, as long as SAARC is held <a href="https://nepalitimes.com/news/indo-pak-tension-hits-saarc-climate-action">hostage by geopolitics, not much may change</a>. New Delhi prefers bilateral dealings rather than multilateral ones, and India-Pakistan tension as well as turmoil in Afghanistan have kept SAARC in limbo.&nbsp; “Modi 3.0 has great power ambitions for India including redefining India’s identity on the world stage,” Pandey adds. “But this will not be achieved unless long-standing disputes are resolved.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240621050636_4679d14e0718498e63bd52bf32dd13f940c83e1aa7dfd42f502259e3ae18e550.jpg" data-media-id="editor_6" data-image-id="20240621050636_4679d14e0718498e63bd52bf32dd13f940c83e1aa7dfd42f502259e3ae18e550" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="SAARC Secretariat NT"> <figcaption>SAARC Secretariat in Kathmandu. Photo: SUMAN NEPALI</figcaption> </figure>  India’s preference for BIMSTEC serves to strengthen ties with ASEAN, and also offset <a href="https://nepalitimes.com/opinion/the-india-us-nepal-china-quadrangle">China’s growing influence</a> in the region. Other countries like Nepal which are members of both SAARC and BIMSTEC <a href="https://nepalitimes.com/editorial/sorry-state">have also been pulled along</a> by New Delhi.&nbsp; “For Nepal, SAARC seems to have taken a back seat to partnerships like BBIN and BIMSTEC as we look towards sub-regional alliances rather than regional ones,” said Nepali Congress leader Minendra Rijal at a geopolitical conference in Kathmandu last week. “But we do not get to hear a lot from the Pakistanis, who have a very different perspective on SAARC.” After being elected for the first time in 2014, Modi invited all SAARC leaders to his inauguration, announcing India's ‘Neighbourhood First’ policy. For his second swearing-in in 2019, he invited only <a href="https://nepalitimes.com/multimedia/bimstec-facelift#">BIMSTEC members</a>, extending India’s regional policy to ‘Neighbourhood First and Act East’. This month, Modi invited neighbouring country leaders, but added Mauritius and Seychelles to the list, indicating another geopolitical priority: the Indian Ocean. “Global challenges demand collective action,” Secretary General Sarwar told a recent Indian Ocean Conference in Perth. “Investing in international partnership, diplomacy, and development initiatives foster peace, stability and shared prosperity.” Pessimists say SAARC is <a href="http://archive.nepalitimes.com/regular-columns/GUEST-COLUMN/forget-SAARC-go-for-bilateralism-or-sub-regionalism,402">as good as defunct</a>, but optimists still see a role for the group since many of the region’s problems can only be resolved through cross border collaboration in improving connectivity, trade, poverty, and coping with the climate crisis. Other foreign policy experts see <a href="https://nepalitimes.com/opinion/hindutva-juggernaut-hits-a-speed-bump">a weaker BJP</a> forcing Modi to mitigate attacks on minorities and the media at home, but may compensate by being more hawkish on Pakistan and in the neighbourhood. As current chair and the site of its headquarters, Nepal should be playing a catalytic role, says Pandey: “It is the obligation of the chair to ensure that the organisation is not dismantled through inaction and indecision. We must be able to impress upon the Indian leadership that it has been a decade since Nepal has been chair and we need to earnestly pass on the baton to the next country.”&nbsp; Bangladesh was a prime mover of SAARC when it was founded in 1985 in Dhaka. Zafar Sobhan, founding editor of the <a href="https://www.dhakatribune.com">Dhaka Tribune </a>brought his family for a holiday to Nepal this week and told us: “The disintegration of SAARC has been a tragedy for all South Asian countries. It would be in everyone's interests to revive it, but with the prevailing political winds in India, I don't see it happening. We are all the poorer for this loss, both literally and figuratively.”&nbsp;

Shristi Karki

Retrofitting SAARC

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413118/63722fef9c7e80680e0c253ejpeg.jpg" alt="" width="3821" height="2788"/><figcaption>Pushpa Kamal Dahal with Jagat Prakash Nadda, national president of BJP. Photo: JAGAT PRAKASH NADDA/TWITTER</figcaption></figure>Barely days after Pushpa Kamal Dahal met the visiting head of the International Liaison Department of the Communist Party of China, Liu Jianchao in Kathmandu, he was off to New Delhi.The undisputed supremo of Nepal’s Maoists has been known to play all sides before, but this puts his balancing act on a whole new level. It also shows that Nepal’s giant neighbours are engaged in a tug-o-war as the country heads for federal and provincial elections on 18 November.Ever since Nepal was founded as a nation state, the country had to do  a tightrope between British India and the Chinese Empire. Recognising this, Prithvi Narayan Shah famously compared Nepal to a yam ensconced between two boulders, and laid out the doctrine of equidistance.Inspired by Mao Zedong, Dahal took on the mantle of ‘Prachanda’ to wage an armed struggle that killed 17,000 Nepalis. At the time, Dahal paraphrased Nepal’s founding king, to describe the country as a “dynamite between two boulders”.Here is a man who in 1998 declared a ‘tunnel war’ to prepare for an Indian invasion, but who spent eight of the ten war years at a safe house in a New Delhi suburb.After the conflict ended in 2006, Dahal has been prime minister twice. The first time, he had to resign after barely a year in power after overstretching his hand in an unsuccessful bid to sack Nepal Army chief Gen Rookmangud Katuwal in 2009, and replace him with a yes-man.It did not go unnoticed that President Ram Baran Yadav had to force him out after some critical late night intervention from New Delhi.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413118/63722ff39c7e80680e0c253fjpeg.jpg" alt="" width="1000" height="600"><figcaption>Head of the International Liaison Department of the Communist Party of China, Liu Jianchao with Pushpa Kamal Dahal in Kathandu last week.</figcaption></figure>Last week’s visit by Liu Jianchao and Dahal’s sudden air dash to Delhi prove once more that Nepal’s domestic politics is, more than ever, a reflection of regional geopolitics.The Chinese, who had so far been content with letting Nepal languish in New Delhi’s sphere of influence have, since Xi Jinping, been taking a keener interest in micro-managing Kathmandu's power corridors.Beijing’s real worry is not so much about India as it is heightened American activities in Nepal, mainly vis-a-vis Tibet. The active lobbying by the Chinese against the US-supported Millennium Challenge Corporation (MCC), and lately the scrapped State Partnership Program (SPP) pointed to this.The Chinese have openly expressed their <a href="https://www.nepalitimes.com/latest/one-party-two-countries/">desire for Nepal’s Communist parties to unite</a>, and actually fulfilled that wish with the merger of the UML and the Maoists into the Nepal Communist Party (NCP) after the alliance’s overwhelming victory in the 2017 election.And when Dahal fell out with prime minister K P Oli and the power struggle threatened the NCP, Chinese Ambassador Hou Yanqi shuttled between the Oli and Dahal residences in Kathmandu to patch up their differences.As it turned out, not only did the NCP split, but so did the UML, the MCC was ratified, and the ruling coalition in Kathmandu adopted a Indo-Western alignment.This must have unnerved the Mandarins in Beijing, who did not have to send a high level party emissary just to feel the political pulse in Kathmandu. Liu Jianchao's main aim was to reforge Communist unity ahead of November, and do a repeat of 2017.After all, the Maoists, UML and the Unified Socialists have been trying to suss things out through emissaries. So much so that it has sent off tremors within Nepali Congress (NC), where an anti-Deuba faction led by Shekhar Koirala and Gagan Thapa have been trying to get the party to contest elections on its own.Ironically, Deuba’s own position within his party is now dependent on the coalition staying intact. This in turn has made the NC almost a junior partner in the coalition, with Dahal asserting himself as heir apparent.In a meaningful <a href="https://ekantipur.com/Interview/2022/07/18/165810525150588451.html" target="_blank" rel="noopener noreferrer">interview in Delhi with Kantipur</a>, Dahal talked about meeting his ‘old friend’ in India’s intelligence apparatus who is Prime Minister Modi's National Security Adviser, and hinted that he had blessings on a rotational prime ministership with Deuba — just as he had with Oli.The danger in all this dalliance is that closer ties with India now means closer party-to-party ties with the BJP, and the prospect for instability in the Nepali polity that it entails.All this comes as the Deuba-led coalition completes one year of misrule and miscues. It has outdone the K P Oli administration in pushing through ordinance after ordinance to amend constitutional provisions, has drafted a bill to grant further immunity from prosecution for war crimes among the Maoist militia and the government.With these tectonic forces at play, the ruling class appears unable and incapable of arresting looming economic collapse.Read more: <a href="https://www.nepalitimes.com/editorial/deubas-mixed-report-card/">Deuba's mixed report card</a>, Editorial

Geopolitical tug-o-war over Nepal

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101148/63720f249c7e80680e0b795ajpeg.jpg" alt="" width="3600" height="2400"/><figcaption>Chinese Ambassador Hou Yanqi and diplomats after seeing off Chinese foreign minister Wang Yi's plane in Kathmandu airport on 27 March.</figcaption></figure>A day after Chinese State Councilor and Foreign minister Wang Yi’s visit to Nepal was announced, my Chinese professor cited a Nepali news source which he received from a foreign colleague to inform the class about the three-day visit to Kathmandu.Without timely reporting, Chinese netizens who are dependent on the official press and social media for news had been largely unaware about Wang Yi’s ‘Journey To the West’ until he was already in Nepal on 25 March.‘Journey to the West’ is a proper noun in Mandarin and derived from an extended account of the Tang dynasty Buddhist monk Xuanzang, who travelled to the ‘Western regions’ of Central Asia and the Subcontinent in the 7th century to obtain sacred texts.Compared to delay in reporting Wang Yi’s Pakistan, Afghanistan and India visits, news on Weibo that he was in Kathmandu on the second day was relatively more timely. The late media reports and posts of his ‘Journey To the West’ could have been deliberate so as to make the news stale, and not create a big fuss.Although Global Times, Xinhua and other state media published articles on the visit, it was not shared on their Weibo pages because it could have likely created undesired discussions. Moreover, the visit coincided with the tragic crash on 21 March of a China Eastern Boeing 737-800 that diverted the attention of netizens.Similar low-key reporting was observed when Global Times and other state-owned media took more than a day to react to the <a href="https://www.nepalitimes.com/here-now/mcc-gets-green-light-in-nepal/">ratification of the American MCC grant</a> by Nepal’s Parliament on 27 February.At that time, Chinese cybersphere was rife with reference of other international websites and expressing curiosity about why the MCC news was not trending on Weibo yet. Whether this was intentional or not, it successfully suppressed the hashtag ‘Nepal approved US aid deal’ (尼泊尔通过美援助协议) which reached the Top 11 on Weibo as soon as the state media reported about it.  (Screenshot below)It is most likely that in the case of Nepal, the <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/">uproar over the MCC ratification</a> on Weibo was toned down to welcome Wang Yi’s visit to Nepal. Besides the nine agreements signed between Nepal and China during his visit this week, a bigger takeaway was <a href="https://www.fmprc.gov.cn/mfa_eng/wjb_663304/wjbz_663308/activities_663312/202203/t20220327_10656328.html">Wang Yi’s talks about China’s ‘Three Supports’ for Nepal</a>:1) Supporting Nepal in pursuing a development path suited to its national condition2) Supporting Nepal in pursuing independent domestic and foreign policies3) Supporting Nepal in participating in the Belt and Road cooperation to a greater extentOne article in the Chinese media noted that the second and third ‘supports’ in particular were a clear reminder to Nepal that it should remain independent in its relations with China, and take the long-term bilateral relations into consideration.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101148/63720f279c7e80680e0b795bjpeg.jpg" alt="" width="528" height="1012"><figcaption>The hashtag尼泊尔通过美援助协议 (Nepal approved US aid deal) trends at Top 11 on Weibo on 1 March, 2022</figcaption></figure>Moreover, Nepal ‘should not be easily deceived by the US investment’ and ‘$500 million is not worth the sacrifice of Nepal's sovereignty’.In a recent <a href="https://weibo.com/ttarticle/x/m/show/id/2309404752126701339032?_wb_client_=1">interview with the China’s state-media</a>, Wang Yi admitted that his visit to South Asia came at a time of the spreading spillover effect of the Ukraine crisis and threats to world peace. He confirmed that China’s neighborhood holds a top position in Beijing’s overall diplomacy, saying it was “better to be a close neighbour than a distant relative” to South Asian countries.While Nepal’s own mainstream press focussed on the nine agreements inked during Wang Yi’s visit and photo-ops with Nepal’s leaders, Chinese media and cybersphere were fixated on Nepal’s reiteration of the One China Policy and commitment towards ‘<a href="https://www.globaltimes.cn/page/202203/1256876.shtml">never allowing any forces to use the Nepali territory to engage in any anti-China activities</a>’.Prof Xue Xiaorong of the School of Marxism at Fudan University, who has over 170k followers on Weibo, posted that the ‘explanatory notes’ on MCC ratification was Nepal’s way of expressing goodwill to China, and the reason behind Nepal’s firm commitment to Minister Wang was to reassure China that it has not sold out its sovereignty to the Americans.This was met with sarcastic comments by some Chinese social media users who urged China not to trust a ‘sold country’. A <a href="https://mp.weixin.qq.com/s/0YcotBZyChOXSThRyIy6UQ">WeChat page reporting on Nepal, Xin Niboer (新尼泊尔),</a> dug out a relatively obscure news item of a small protest on Sunday in Janakpur against the 9-point agreement between Nepal and China.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101148/63720f299c7e80680e0b795cjpeg.jpg" alt="" width="640" height="585">Besides the expected meetings with President Bidya Devi Bhandari, Prime Minister Deuba, Foreign Minister Narayan Khadka , Wang Yi also met two Communist leaders Pushpa Kamal Dahal of the Maoist Centre and K P Oli of the UML .While Wang Yi’s talk with Dahal were reported with predictable remarks from both sides thanking each other for their effort and support, the meeting with Oli was cited in the Chinese media with greater sentiment.“<a href="https://www.guancha.cn/internation/2022_03_28_632119_s.shtml">You are an old friend to the Chinese people</a>,” Wang Yi is reported to have told Oli, reminding him that it was when he was prime minister in 2019 that <a href="https://www.nepalitimes.com/banner/president-xi-in-kathmandu/">Chinese President Xi Jinping paid a historic visit to Nepal</a> which ‘achieved important outcomes and brought bilateral relations to a new level’.This reporting could signal that the tables may have turned on <a href="https://www.nepalitimes.com/opinion/comment/what-the-chinese-think-about-nepals-maoists/">Dahal’s positive impression in China as a ‘Maoist’ leader</a>. Some comments on Chinese social media remarked that ‘this was not the same Prachanda’ as the one in 2006. Others joked that <a href="https://news.ifeng.com/history/4/200703/0319_338_89975.shtml">Prachanda</a> was the rabbit in the race with the turtle and had underestimated the ‘intensity of the struggle’ back then.Another comment called Wang Yi’s meetings with Nepal’s two top Communist leaders as sending a message to the Americans that ‘if they can interfere in Nepal’s internal affairs then so will China’.Regardless, as much as Nepal has stressed on supporting One China Policy, China has equally stressed on non-interference in the internal affairs of other countries.It was not lost on many that Wang Yi’s visit to Nepal came just over a month after Nepal’s Parliament approved the MCC. This undoubtedly is a factor that has made Beijing rethink its Nepal policy, which is an extension to the whole region.In his interview in state media, Wang Yi stressed that his South Asia tour was to stress the importance to work with neighbours, and ‘<a href="https://weibo.com/ttarticle/x/m/show/id/2309404752126701339032?_wb_client_=1">to build an Asian community with a shared future</a>’.Aneka Rebecca Rajbhandari is a Masters student of Chinese Politics at Renmin University of China.

Reaction to Wang Yi’s Nepal visit in Chinese media

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141132/636cfd5b9c7e80680e0a0bddjpeg.jpg" alt="" width="2058" height="1514"/><figcaption>The 2nd Battalion 5th Gurkha Rifles at Ahnai Tangi in Waziristan on 14 January 1920 as part of Britain's 'Third Afghan War'. Painting by Fred Roe at the National Army Museum.</figcaption></figure>Even though Nepal and Afghanistan are separated geographically, Nepali and Pashtun warriors have met face-to-face over more than 200 years. While the Pashtun were in their home territory, the Nepalis were fronting for others, and now with the Taliban’s second-time total victory in Afghanistan, new dynamics will have to evolve.As current chair of the South Asian Association for Regional Cooperation (SAARC), Nepal must take the lead in, on the one hand, helping the world accept the fait accompli of the Taliban victory, while on the other get the didactic, xenophobic Taliban to accept the values of pluralism and multilateralism. As a country which holds these values dear, Nepal should reach out of its own cocoon to do what it can.The history of Afghan-Nepal relations goes back two centuries, with what the British colonisers called the ‘First Afghan War’ and continued through the ‘Third Afghan War’ against the Pashtun in 1919.  These were Britain’s wars in Afghanistan, and the Nepalis who joined at various times were straight-off mercenaries, parts of the British Gurkhas, and even the national Nepali army. Most recently, British Gurkhas were fielded as part of the ISAF/NATO force, or were recruited by western military contractors to guard Western bases and embassies.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141132/636cfd5e9c7e80680e0a0bdejpeg.jpg" alt="" width="640" height="751">The Army of the IndusNepal is situated in the mid-Himalaya, while Afghanistan sits astride the Pamir and Hindu Kush, 2,000km away. Even at its height, the expansionist Gorkha Empire could not go beyond the Sutlej River. But these are the only two countries in South Asia that fought off colonialism. Afghans are known for their fierce resistance to foreign hegemony, as were Nepalis, but Afghanistan has nevertheless been serving continuously as a ‘fighting field’ for outsiders, while at best Nepal has been a ‘playing field’.Historically, there were indirect links between the central Himalaya and the Hindu Kush/Pamir: from the ancient Aryans down to the Moghuls, it was through the Khyber Pass and other northwestern passages that migrations and conquests of the Indus-Ganges plains occurred. Afghanistan stretched outside the country’s modern boundary, and included the Khyber-Pakhtunkhwa region of present-day Pakistan.It was the colonial British that separated the Pashtun people with a new boundary called the ‘Durand Line’. This forced demarcation has relevance today because, while Afghanistan is ethnically diverse with Kyrgyz, Baloch, Hazara, Uzbek and other communities, the Taliban leadership and rank-and-file are dominated by Pashtuns.Even though Afghanistan and Nepal were spared colonial rule, Afghanistan suffered much more foreign interference than Nepal. Located between Czarist Russia, Central Asia and the British Empire and with Persia to the west, Afghanistan was (and remains) a strategic prize. Nepal, on the other hand, was protected by malarial jungles to the south and the world’s highest mountains to the north, and neighbouring powers found it more advantageous to maintain it as a buffer state.When the Gorkha Empire felt threatened by the East India Company in the mid-1700s, it sent feelers for help to the Maratha and Sikh kings. Though probable, we do not have historical evidence to indicate that Kathmandu also appealed to the rulers in Kabul.Meanwhile, even before the end of the Anglo-Nepal war of 1814-1816, some Nepali soldiers had already gone over to the British side, marking the beginnings of the ‘Gurkha’ brigades. After the bloody defeat at Nalapani, the Gorkhali general Bal Bhadra Kunwar escaped to join the forces of Sikh king Ranjit Singh in Lahore. The Nepali word लाहुरे for soldiers and workers who go abroad is derived from the name of this city.We do not know what happened to the other Gorkhali troops who went with him, but Bal Bhadra himself was killed in battle when the Sikhs were fighting the Pasthuns in Naushera, which was then Afghan territory.There are other indirect Afghan influences in Nepal. The words रुपियाँ and अशर्फी were introduced in India by Sher Shah Suri, who became ruler of Mughlan after briefly ousting emperor Humayun from Delhi. The terms percolated up to Nepal. Although Sher Shah was born in Bihar state bordering Nepal, his ancestral village was Sur in the Sulaiman Range, within Afghan territory.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141132/636cfd619c7e80680e0a0bdfjpeg.jpg" alt="" width="640" height="945"></figure>British forces together with Nepali soldiers of the 'Army of the Indus' entering the Bolan Pass en route from Quetta to Afghanistan in 1839. The campaign ended in a bloody disaster. Engraved by Louis and Charles Haghe.Nepalis and Pashtuns came into more direct contact during the East India Company’s Afghan Campaign of 1839-42 when an ‘Army of the Indus’ was assembled to invade Afghanistan. This was part of the Great Game, when British India felt it had to contain the expansion of Czarist Russia. Thousands of troops from the early ‘Gurkha’ units were deployed on the Afghan front, and as was the practice in those days, the soldiers were accompanied by camp followers which included their wives and children.The ‘Army of the Indus’ was routed, and legend has it that only one British officer straggled out to Peshawar, though there would have been a few more. There is no count of how many Nepalis were cut down with swords in Herat, Ghazni and Kabul, or those who froze to death in the dreadful Afghan winter. Many women and children would have been enslaved by Afghan warlords.North of Kabul in Charikar Fort, hundreds Gorkhali fighters were under siege for months, with the water source blocked. When the Gorkhalis tried to break out, most were killed, except a sipahi named Motiram who managed a dangerous and arduous trek down to his cantonment in the Punjab plains to tell the tale.Najibullah to GhaniThroughout the 19th, 20th and 21st centuries, <a href="https://www.nepalitimes.com/latest/who-will-rescue-nepalis-from-afghanistan/" target="_blank" rel="noopener noreferrer">Nepalis kept going back to Afghanistan</a> – to fight. Gurkha soldiers assigned to the Durand Line engaged in frequent skirmishes with Pashtun fighters. And in 1919, while other Nepali soldiers were returning home from Belgium, France and Gallipoli, soldiers of the Nepal Army were sent to Afghanistan by Prime Minister Chandra Shumshere Rana to help the British counter a rebellion in Waziristan. Those troops for the ‘Third Afghan War’ were led by Gen Babar Sumshere.In the modern era, the people of Afghanistan suffered as super-powers muscled their way in. In 1974, Afghan king Zahir Shah was overthrown, and at the end of the Mujahideen war that followed against Soviet occupation, President Najibullah was dragged out of the UN compound where he had sought refuge, tortured and hung at the gates of Kabul in 1996 by the Taliban.Unable to face the resistance of Afghan guerrillas, the Soviet Union withdrew in 1989 and cast off Najibullah in 1991, just as the Americans abandoned Ashraf Ghani in 2021. During this whole time, Afghan polity was decimated as a result of interference by the Soviets, the Americans after 9/11, NATO forces, Pakistanis and Saudis, who together spent trillions of dollars.While all that money landed up at the hands of the Afghan elite and warlords, ordinary Afghans died and suffered. Millions became refugees in Iran and Pakistan, and more refugees are streaming out as this is written – the desperation is seen in Afghan men trying to attach themselves to C-17s on the runway at Kabul Airport this week.The irony of it all was that some of the descendants of the Gorkhali troops who fought in Helmand and Kabul nearly 200 years ago were back as part of the Gurkha units in the British deployment in the same places as a part of NATO’s ISAF mission. The blood and sweat they sacrificed seems to have been in vain, as President Ashraf Ghani flew out of Kabul on 15 August. Ghani said he wished to prevent bloodshed, and would doubtless have also feared meeting the same fate as Najibullah. But all this seems to have been part of a larger withdrawal deal worked out between the Americans and the Taliban in talks in Doha.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141132/636cfd649c7e80680e0a0be0jpeg.jpg" alt="" width="1474" height="816"><figcaption> </figcaption></figure>One of the consultants that the World Bank brought to Nepal in 2006 to advise leaders here about post-conflict rehabilitation was <a href="http://archive.nepalitimes.com/news.php?id=13470#.YRvjiS1w3OQ" data-saferedirecturl="https://www.google.com/url?q=http://archive.nepalitimes.com/news.php?id%3D13470%23.YRvjiS1w3OQ&amp;source=gmail&amp;ust=1629372271640000&amp;usg=AFQjCNHeMUVxCU735OL-66D-E9bbRhVIQw">Ashraf Ghani himself. </a>The author of the book he co-wrote with Clare Lockhart, Fixing Failed States: A Framework for Rebuilding a Fractured World, Ghani wrote in one of his columns for Nepali Times then: ‘Surely the people of Nepal deserve leadership from their politicians to ensure that Nepal embarks upon a path towards a new future. A new future is no longer a dream, it has become possible.’Nepal has not been brutalised and ravaged by a series of proxy wars like Afghanistan has for the past four decades. It did suffer the violent 10-year internal conflict, but the peace process took hold, and the country held two elections to a Constituent Assembly that wrote the new Constitution. Afghanistan’s violence, the killing of innocents and religion-laced extremism, have been at a whole different level.If it was soldiers that Nepal used to send to Afghanistan in the past two centuries, in the last two decades it was Nepali development experts, gender and media consultants and governance advisers who went to Kabul on behalf of the UN or other partners. And then there are the <a href="https://www.nepalitimes.com/banner/nepali-repatriation-from-kabul-starts/" target="_blank" rel="noopener noreferrer">estimated 15,000 security guards</a> protecting various embassies, hotels, bases and installations in Kabul. Nepali were attracted to dangerous work in Afghanistan because it paid much better, even though they were often hired as guards of the Western soldiers.While some Nepalis are starting to return on repatriation flights this week, there are many stranded in Kabul and fearful about their future. The Nepal government must proactively establish contact with the new regime in Afghanistan in order to ensure the safety of its citizens there. It is also hoped that the soft language emanating from the Taliban victors, about allowing safe passage to all who seek to exit, reflects a genuine commitment.Nepal is currently chair of SAARC, and it could use its tenure to bring Afghanistan back into the South Asian fold even as the Taliban go about establishing themselves. Kathmandu must strive to establish bilateral relations, while remaining outside sphere of Indian, Chinese, Pakistani, Saudi or Western interests there.China and Russia have already made their moves to establish relations with the Taliban government. New Delhi has been stung by Ashraf Ghani’s downfall, given their steadfast support for him, while there seems to be some rejoicing in Islamabad. If Nepal takes a proactive diplomatic approach (in a manner that would be wholly new to it) Kathmandu could use its bilateral relations to usher a new era of peace in the region. For Nepal as a country that has been so insular in past two decades, that may seem a tall order, but some self-confidence in foreign policy can make it happen.The immediate priority of the Ministry of Foreign Affairs, however, is to ensure the security and repatriation<a href="https://www.nepalitimes.com/banner/nepali-repatriation-from-kabul-starts/" target="_blank" rel="noopener noreferrer"> </a>of <a href="https://www.nepalitimes.com/latest/bring-us-home-says-nepali-in-kabul/" target="_blank" rel="noopener noreferrer">Nepalis presently in Kabul</a> and across Afghanistan. Meanwhile, Nepali civil society members must reach out to their counterparts in Afghanistan and offer safe haven should it be required.While the Taliban spokesman has said all are safe, there is no saying when Afghan <a href="https://www.nepalitimes.com/latest/call-to-evacuate-afghan-journalists/" target="_blank" rel="noopener noreferrer">journalists,</a> gender and human rights activists may not need support and refuge. Afghanistan is the only country in South Asia whose nationals must get a visa to come to Nepal. In the name of South Asian solidarity, ‘visa on arrival’ should now also be available for Afghan citizens.The Taliban has been using Sharia law to justify its extreme form of patriarchy to prevent women and girls from equal rights, agency and education. It has also been violently suppressing minorities like the Shi’a and Hazara. The group that blew up the historical statue of the Buddha in Bamiyan in 2001 is now ruling Afghanistan, and there are genuine fears that the Taliban will return to its old ways.The fact that the Taliban is in control in Kabul is a fait accompli. Nepal must accept this and, while working to extricate its citizens from Afghanistan, must help Kabul rejoin the South Asian sphere.

Nepal and the Taliban’s second coming

This is the first instalment in a new limited series in Nepali Times on the historic transportation infrastructures of Nepal. Nepal’s Forest Railways As<a href="https://nepalitimes.com/here-now/india-s-border-trains-that-connected-nepal"> India’s railway network </a>expanded in the 1890s and 1900s, the demand for wooden railway sleepers, called ‘ties’ in America, likewise increased. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/the-rana-reign-a-recap-of-history,3751">Rana regime</a> realised that western Nepal’s dense forests, from which sal trees could be extracted and sold, represented a valuable source of revenue. There was a problem of accessing large tracts of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">Tarai forests</a>. However, once Indian railway lines are extended to Nepal’s border in several places, this issue could be resolved by constructing logging railways, also known as ‘tramways’ or ‘light railways’. The Nepal Government awarded a contract to Punjabi timber contractors to supply 15,000 sal sleepers to Chandan Chauki station of India’s Oudh &amp; Rohilkhand State Railway in 1908. The contractors also received a concession to construct a steam tramway to run 48km into <a href="https://nepalitimes.com/banner/reviving-nepals-community-forestry-success-story">Nepal’s forests</a> for cutting and transporting trees. The author found no records, however, indicating that such an ambitious tramway was built in 1908. The hewn logs were probably carried into India by bullock carts or <a href="https://nepalitimes.com/news/elephants-become-white-elephants">elephants</a>. The earliest known forest railway in Nepal was built in 1914 in the southwestern corner of the present-day Parsa district. A British engineer went to the Indian border town of Bikna Thori to plan a 4-mile portable light railway for the transport of timber from <a href="https://nepalitimes.com/here-now/on-the-tri-junction-of-wildlife-conservation-conflict-and-co-existence">the forest of Chitwan </a>to the Thori depot on the Bengal &amp; Northwestern Railway. This short line was laid upon wooden sleepers, and its rails could be taken up and repositioned when logging in one section of the forest was completed. This forest railway was in operation at least through 1917.&nbsp; A few year down the line in 1923, J V Collier of the Indian Forest Service built a narrow-gauge railway in Kailali district also to export of timber to India. This line, the Nepal Government Forest Railway, departed Chandan Chauki in Uttar Pradesh and ran 48km northwest into Nepal.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd.jpg" data-media-id="editor_6" data-image-id="20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd" data-rendition-name="original" width="1130" height="689" loading="lazy" alt="Nepal's little railways"> <figcaption>A Nepal Government Forest train in Kailali District hauling sal sleepers in 1925. Photo: DAVID CHURCHILL </figcaption> </figure>  It was a 2-foot railway supported by 11kg rails. The line was ‘temporary’ in that as sal trees were thinned out in one area, railway tracks were shifted to uncut areas of the forest. The railway crossed seven small <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">rivers</a>, but the bridges were taken down during the summer and monsoon. Trains ran only from November to April. This forest railway purchased four 4-6-0T ‘tank’ engines built in Leeds, England. Each bogie could carry 100 broad-gauge sleepers, and two engines were needed to haul a 21-car train loaded with 2,100 sleepers. This huge commercial forest operation once employed about 14,000 men, most of them Indians. During one season, nearly 800,000 broad and metre-gauge sleepers were exported to India. When India suffered a depression in 1930, large scale operations came to an end. Read also: <a href="https://nepalitimes.com/news/rust-in-peace?fbclid=IwAR1_eg88TCOS6RGRW1af7WvaWx5mzh_rY8-vT1MnJxSs41QtCpaA988oXk8">Rust in peace</a>, Daniel W Edwards  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5.jpg" data-media-id="editor_9" data-image-id="20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>Rails extended north from this spot into the virgin sal forests of Bardia in western Nepal 100 years ago.  DANIEL W EDWARDS</figcaption> </figure>  A third railway was built in <a href="https://nepalitimes.com/here-now/the-big-bulls-of-bardia">Bardia </a>where some scattered rails and signs of an old roadbed were seen in the 1960s. It ran from Nishangada in India to Khairbhatti in Nepal. From there, stations heading south were Ranipur, Karmak, Taratal and Madhuwan. Collier likely <a href="https://nepalitimes.com/here-now/nepal-train-project-struggles-to-stay-on-track">built this railway </a>as well in the 1920s. An elderly man in Bardia in 2022, whose father had worked on this forest railway, was interviewed for this account. Kathmandu Valley’s Motor (Trolley) Railway Merchants importing goods from India via the<a href="https://archive.nepalitimes.com/article/business/ropeways-connecting-nepal,1749"> ropeway</a> Chandra Shamsher built in 1927 had to go to the ropeway’s terminus at Matatirtha near Thankot to claim their goods and then haul them 6km to the customs house Bhansar Adda at Teku for clearance and payment of customs duties. The Motor Railway was built to carry goods from the<a href="https://archive.nepalitimes.com/news.php?id=16839"> ropeway station </a>directly to the customs office, making it cheaper and more convenient for merchants to receive their shipments. In December 1931, Prime Minister Bhim Shamsher issued an order (sanad) putting Lt Gen Singha Shamsher Rana in charge of building this rail line to Teku and on to ‘Nabalak Khana’ in Tripureswar, a distance of 10km. The project was subdivided into four sections or ‘phant’, and for each, budgets and timelines were established. There was bato phant (constructing the roadbed), lik sleeper and jordne phant (laying sleepers and joining the rails), culvert phant (installing culverts) and pul phant (building bridges). Colonel Kishore Narsingh Rana was put in charge of the sleeper and rail section, while Colonel Dilli Jung Thapa, an engineer at Ghar Kaj Adda, also was involved. The Motor Railway was completed by the end of 1933. In the beginning, the railway’s small wagons may have been pulled and pushed by men and bullocks. However, in 1938 a British railway manufacturer sent Nepal a four-wheel, 5½ ton, 2-foot narrow-gauge diesel-powered locomotive with mechanical transmission, hence the name motor railway. Read also: <a href="https://nepalitimes.com/latest/nepal-railways-janakpur-test-drive?fb_comment_id=3554227181262227_4263866616964943">Nepal Railways Janakpur test drive</a> Leaving Matatirtha, the trains passed Satungal, Naikap, the Bishnudevi Temple, crossed an iron bridge over Balkhu Khola, then to Ghattepakha, Sunagau, through what is now a section of Kuleshwor (‘Lik Marg’) to the Customs Office at Teku.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9.jpg" data-media-id="editor_15" data-image-id="20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9" data-rendition-name="original" width="2000" height="1333" loading="lazy" alt="railways in Nepal"> <figcaption>Lik Marg in Kuleswor, the former route of the Motor Trolley Railway. Photo: DANIEL W EDWARDS</figcaption> </figure>  In 1945, Motor Trolley had four engines, but spare parts was badly needed. The charge for transporting one maund (about 40kg) of cargo from Matatirtha to Teku was 50 paisa. Even though the trains ran slowly and only for a short distance, <a href="https://nepalitimes.com/news/fatalism-and-fatalities">accidents were not unknown</a>. A train loaded with rice, salt and cotton derailed on a curve in July 1946, and two railway employees were crushed under the cars and killed, five others were injured. Besides the driver and a brakeman, guards rode the trains to prevent theft of goods.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060.jpg" data-media-id="editor_17" data-image-id="20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>The author by the remains of the Balkhu Khola bridge built in 1932 with American steel. Photo: JEEVAN NEPAL</figcaption> </figure>  By 1953, government budget estimates indicated the Motor Railway would break even with an income of Rs70,000 against Rs71,000 in expenditure. It appears the railway stopped service around 1957 with the opening of the Raj Path and the extension of the ropeway from Matatirtha to Bhansar Adda. Bent steel beams of the bridge across Balkhu Khola and two plaques recovered from the river a few years ago are the only remains of this railway today. Photos of the Motor Trolley Railway in operation are hard to come by.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b.jpg" data-media-id="editor_18" data-image-id="20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b" data-rendition-name="original" width="5189" height="1979" loading="lazy" alt="railways in Nepal"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The Kosi Project Railway (KPR) As early as 1941, India and Nepal considered building a dam on<a href="https://nepalitimes.com/here-now/the-kosi-s-sorrow-and-scope"> the Kosi River</a> to prevent destructive floods caused by <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">monsoon rains</a>. Floods in 1950 inundated 500 villages in Bihar and left 500,000 people homeless. The two governments signed an agreement in 1954 to build a barrage on the Kosi, and King Mahendra and Prime Minister Nehru laid the foundation stone in April 1959. To transport stones from a quarry near Dharan to use in mixing concrete at the construction site, the Indian government, in charge of building the barrage, made plans to build a narrow-gauge railway linking Bihar and its border town of Bhimnagar with Nepal’s settlements at Chakraghatti, Chatra and Ghopa, the outskirts of Dharan.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7.jpg" data-media-id="editor_21" data-image-id="20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7" data-rendition-name="original" width="4011" height="2645" loading="lazy" alt="Nepal's railways"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The section of the KPR in Nepal totaled 66km — the country’s longest railway to date. The stations south of Chakraghatti were Rajabas, Maduhuwan, Kushaha, Haripur and Bhantabari. The line built, operated and owned by the Indian Government, was opened in 1958 and known locally as Dhunge (stone) Rail. Procuring locomotives, wagons and other materials was a challenge. India’s Railway Board searched the country for old 41 lb rails, and located steam engines, most built around 1910, in poor condition, and stored in ‘retirement’. These decrepit locomotives were later cannibalised for parts to keep the remaining engines running, and six newer locomotives built in Yugoslavia were sent to the KPR in 1960 to prevent the railway from shutting down and halting construction of the barrage.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b.bmp" data-media-id="editor_22" data-image-id="20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b" data-rendition-name="original" width="3171" height="2069" loading="lazy" alt="Nepal's railways"> <figcaption>KPR locomotives, water tank and staff at Chakraghatti in Nepal. Photo: JOHN BENSON</figcaption> </figure>  Used bogie-wagons (gondolas) came from <a href="https://nepalitimes.com/here-now/india-nepal-rail-diplomacy">Indian railways</a> that had been converted to metre-gauge, others were manufactured in Muzaffarpur without couplers due to the non-availability of steel. A hundred new wagons arrived from Japan, but only half could be put in service, as couplers from the other 50 were removed and attached to the Muzaffarpur wagons. This smorgasbord of equipment kept shop mechanics and work crews busy, but now-abandoned railways in Nepal always operated under less-than-ideal conditions. Although the purpose of the KPR was to transport gravel, stones and boulders to the site of the barrage, photographs show people riding in loaded wagons. Excluding Dharan, there was no bus service through the wild animal infested jungle between Dharan and Chakraghatti or along the dusty paths linking other small villages on the KPR, so patient locals sat in wagons at Dharan, waiting perhaps for hours for trains to depart.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6.jpg" data-media-id="editor_24" data-image-id="20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6" data-rendition-name="original" width="3965" height="2659" loading="lazy" alt="railways in Nepal"> <figcaption>Ticketless riders on a train of gravel and stones in the forest between Dharan and Chakragatti in 1966. Photo: JOHN BENSON</figcaption> </figure>  Sons of former railway workers in Chakraghatti say that there were no fixed schedules, three or four trains ran both ways daily in the early 1960s. Southbound trains carried gravel, stones and boulders, while northbound trains would carry coal, cement and provisions, including sacks of coins to pay the workers. Trains even ran at night, and the crews worked long hours. Workers received free housing in project-built tenements but had to buy food supplies and items for personal use. The Babu Saheb or the superintendent lived at Chakraghatti, and at one time supervised more than 1,000 employees, nearly all of them from India. The barrage was completed in 1964, but by 1970, the Kosi Project Railway had passed into history. Daniel W Edwards was a Peace Corps volunteer in 1966 and is the author of several books on Nepal.

Nepal’s five little railways

Turkish Airlines is official airline partner for the second edition of the Vatsalya Everest Women’s Volleyball League (EWV). The league, scheduled for 5-13 September, will take place in Pokhara and feature 18 international players alongside elite Nepali volleyball talent. The agreement was signed by Turkish General Manager Serkan Başar, and EWV CEO Snevy Chapagain. “Turkish Airlines’ support ensures a seamless journey and adds immense prestige to the league’s goal of women’s empowerment through sports as well as the agenda of sports tourism,” said Chapagain. “We are thrilled to partner with Vatsalya Everest Women’s Volleyball League as the official airline. With this association, we aim to support women role models in sports. We believe this association will connect countries to Nepali volleyball,” remarked Basar.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4.jpg" data-media-id="editor_0" data-image-id="20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4" data-rendition-name="original" width="1920" height="1280" loading="lazy" alt="Turkish"> </figure>

Turkish to sponsor women’s volleyball league

India and China have a long-standing border dispute along their Himalayan border which has erupted in violent skirmishes. But Indian and Chinese officials last week agreed to ignore Nepal’s own border dispute with India to facilitate trade. The Indian Ministry of External Affairs this week flatly rubbished <a href="https://nepalitimes.com/editorial/territorialism">Nepal’s territorial claims</a> to the Lipulek Pass and the Kalapani Region, including Limpiyadhura, which Nepal considers as the source of the Mahakali River that forms Nepal’s western border with India. The latest episode in this dispute has come as Sino-Indian relations have thawed after US President Donald Trump slapped <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">sanctions on Indian exports</a>. The joint communiqué in Beijing said India and China had agreed to resume their border trade through the Nathu La, Sipki La and Lipulek during Chinese foreign minister Wang Yi’s visit to New Delhi. Lipulek is a pass 10 km north-east of <a href="https://nepalitimes.com/news/there-is-precedent-to-settling-kalapani">Kalapani</a> which has been disputed ever since the Survey of India published its 1879 map, where the source of the Mahakali was suddenly shifted from Limpiyadhura to Lipulek.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd.jpg" data-media-id="editor_3" data-image-id="20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd" data-rendition-name="original" width="2000" height="2083" loading="lazy" alt="Lipulek dispute explainer"> </figure>  This tributary of the Mahakali was called the Kali on this map, and is a fordable tributary and not the main channel of the border river. The main Kali River was renamed Kuti Yangdi, and this happened while the British were still in India presumably to gain access to the Lipulek in contravention of the 1816 <a href="https://nepalitimes.com/banner/borderline-disorder">Sugauli Treaty</a>.&nbsp; This subterfuge continued even after India gained independence in 1947. Nepal has maintained that the main channel of the Kali is the border as per the 1816 treaty, when Nepal lost a third of its territory to British India. It is all well and good that India and China are now friendly enough to <a href="https://archive.nepalitimes.com/news.php?id=19447">open border trade</a> routes, but it should not be in violation of Nepal’s territorial integrity. Nepal should be called for diplomatic and political negotiations regarding the Lipulek pass and the Kalapani region comprising Limpiyadhura.&nbsp; Read also: <a href="https://nepalitimes.com/opinion/comment/when-xi-meets-modi-and-oli">When Xi meets Modi and Oli</a>, Kanak Mani Dixit China and India, but especially the latter, should invite Nepal to discuss these issues and iron out the disputes based on facts and evidence and maps. Nepal had sent seven diplomatic notes to India and three to China so far regarding the Lipulek and Kalapani. India has not responded to any of them. China replied once saying that Nepal and India should sort out their border disputes first before voicing their opinions. Nepal welcomes the recent talks between India and China that it hopes will positively impact on settling border disputes that are mostly stalled since the 1962 Sino-Indian war, the 73-day military standoff over the disputed Doklam region between China and Bhutan, and the 2020 Galwan clash in Ladakh. Nepal’s two large neighbours seem to have come to their senses and realised that it is in their interest to collaborate rather than confront each other when President <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trump is acting erratically</a> with threats of sanctions and tariffs.&nbsp; Prime Minister K P Oli should bring up Nepal’s grave concerns about the Lipulek during his state visit to India next month when he will meet Prime Minister Narendra Modi in Bodh Gaya. The two are also expected to meet next week at the Shanghai Cooperation Organisation summit in Tianjin when Chinese President Xi Jinping will also be present. But even before that Nepal should send diplomatic notes to both the Indian and the Chinese governments regarding their agreement to resume border trade through the Lipulek.&nbsp; Here is a timeline of the developments regarding the Lipulek: Sino-Indian Agreement of 1954 This 8-year Agreement on Trade and Exchange between Tibet and India was signed in Peking on 29 April, 1954 by the Chinese Vice-Foreign Minister Chang Han Fu and the Indian Ambassador Nedyam Raghavan.&nbsp; There was no explicit mention on the border settlements either on the Line of Actual Control (LAC) or on Ladakh, although trade and pilgrimage through Lipulek and other 5 passes (Sipki La, Mana Pass, Niti Pass, Kungri Bingri Pass and Dharma Pass) were agreed upon.&nbsp; Trade between Uttar Pradesh state and the Tibet Autonomous Region was through ‘border &nbsp;point of the agreement states: ‘With a view to facilitating the visits of persons engaged in border trade and the exchange of commodities and means of transportation, (India and China) have decided that Lipulek (Qiangla) be the border pass for the entrance and exit of the said persons, commodities and means of transportation from the two sides.’ The agreement expired on 6 June 1962 during the Sino-Indian war, and the two sides did not renew it. Bilateral ties started to normalise only in the 1990s with the Indian decision in 1988 to abandon its policy of settling ‘territorial issue’ for ‘normalisation of relations’. India There was no reaction from Nepal to the 1954 agreement since Nepal did not have diplomatic relations with China yet at the time. Sino-Indian Agreement of 2005 The Political Parameters and the Guiding Principles for the Settlement of the Sino-Indian Boundary Question is detailed in 11 Articles, which outline the steps to be taken for a Peaceful and Tranquil Border. The agreement was a direct outcome of the Special Representatives mechanism that had been set up through a 2003 agreement. It also incorporated the Confidence Building Measures in Military Field along the Line of Actual Control (LAC) in the Sino-Indian Border Areas signed in 1996.&nbsp; A protocol on Modalities for the Implementation of Confidence Building Measures in the Military Field along the Line of Actual Control in the India-China Border Areas signed during Chinese Premier Wen Jiabao’s India visit, which stated in Clause 2 of Article 5: ‘Both sides agree to extend in principle to expand the mechanism of border meeting points to include Kibithu Dhamal in the Eastern Sector and Lipulek Pass (Qing La) in the Middle Sector. The precise locations of these border meeting points will be decided upon mutual consultations.’ Nepal’s Foreign Ministry issued a statement in 2005 stating that Nepal had asked China about the issue and the Chinese Embassy clarified that the agreement had nothing to do with Kalapani. This was perhaps the first time that Nepal had objected to the Sino-Indian agreement on Lipulek. King Gyanendra had staged a coup d’état on 1 February 2005, just two months prior to this agreement. The Nepali press voiced criticism of China in particular for disregarding the country’s sentiment.&nbsp; Sino-Indian Agreement of 2015 India and China signed several documents during the state visit of Chinese President XI Jinping to India on 18 September 2011. Number one on the list was: ’Opening a New Route for Indian Pilgrimage (Kailash Mansarovar Yatra) to the Tibet Autonomous Region of the People’s Republic of China’.&nbsp; The Indian foreign ministry stated: ‘The MoU provides for conducting the annual Kailash Mansarovar Yatra through Nathula Pass in Sikkim in addition to the existing Lipulek Pass in Uttarakhand’. On May 15, 2015, China and India issued a Joint Statement during Indian Prime Minister Narendra Modi’s visit to China. Point 28 under the ‘Trans-border Cooperation’, states that the two sides agreed to ‘hold negotiation on augmenting the list of trades commodities, and expand border trade at Nathu La, Quingla/Lipulek Pass and Sipki La Pass’. Nepal’s objection to the 2015 agreement was stronger than in 2005. Prime Minister Sushil Koirala called up Narendra Modi to express Nepal’s displeasure It was not until 2020 that Nepal’s Foreign Minister disclosed that ‘Nepal had expressed its disagreement in 2015 through separate diplomatic notes addressed to the governments of both India and China … including Lipulek Pass as a bilateral trade route without Nepal’s consent.’  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea.jpg" data-media-id="editor_8" data-image-id="20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea" data-rendition-name="original" width="1108" height="1550" loading="lazy" alt="Lipulek dispute explainer"> </figure>  The new political map of India published by the Survey of India in November 2019 that incorporated areas east of the Kali River including Kalapani as Indian territory sparked renewed public, and political, attention to the Mahakali dispute. The Nepal government then countered by formally approving the publication of the new Political and Administrative Map of Nepal including all territories lying to the east of the Mahakali River on May 18, 2020. In June, the House of Representatives unanimously endorsed the second amendment to the Constitution of Nepal to update the country’s new political map in the national emblem. Sino-Indian Consensus of 2024 A 6-point Consensus on Peace and Tranquility on the Line of Actual Control (LAC) was agreed on December 18, 2024 between the Special Representative of the People’s Republic of China, Wang Yi, and the Special Representative of the Republic of India, Ajit Doval.&nbsp; India has not denied that this is a consensus, while China made it clear that this was not a Joint Statement. This Consensus is in line with the 2005 agreement, and was agreed during the 23rd round of the Special Representatives talks held after a gap of five years aimed at restoring bilateral ties frozen because of the military standoff in Ladakh. The agreement included: cross-border communication and cooperation, promoting the resumption of pilgrimages by Indians to Xizang, cooperation on crossborder rivers, and trade at the Nathu La Pass. Nepal made no reaction to the statement despite Lipulek being the pilgrimage route for Mansarovar and Kailash.&nbsp; Prabhakar Sharma is a construction engineer and an international border expert who has worked as a survey engineer for the Cameroon-Nigeria border demarcation by the United Nations.

Lipulek dispute explainer

It was 30 years ago this month that investment into ‘Baby Arun’, the 201MW first phase of the run-of-river Arun III project, was brought to a screeching halt when the World Bank officially withdrew its support. This brought about profound and fundamental changes in the way Nepal’s power sector subsequently developed. Nepalis suffered debilitating power outages between 2008-2016 due to shortages attributable to the cancellation. At the same time, the gap left by Baby Arun was filled by private sector investment in ways that were not obvious in 1995. It took 30 years, but in many ways Nepal’s power sector is more healthy today than it has ever been, and likely better than if the project was built as planned. At a projected budget of $1.08 billion, Baby Arun would have cost the equivalent of Nepal’s entire annual government expenditure in 1995. It was to be funded by concessional grants and loans from multilateral and bilateral funders, including the World Bank, Asian Development Bank (ADB), KfW, and investment by the government itself. At the time, Nepal’s total electricity generation capacity was only 230MW, and the trajectory of the power sector changed dramatically following the cancellation. In the past 30 years, $5.4 billion has been invested in the power sector led by private investors, and much of it from domestic banks and pension funds (table, right).  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0.jpg" data-media-id="editor_0" data-image-id="20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0" data-rendition-name="original" width="984" height="521" loading="lazy" alt="30 years after Baby Arun"> </figure>  Nearly 70% of the new megawatts generated were by private independent power producers (IPP) in the past 30 years, while the Nepal Electricity Authority (NEA) and its subsidiary companies added 30% of new capacity. Almost 80% of total debt financing came from domestic banks and employee retirement funds. International assistance for power generation dropped dramatically over this time, accounting for only about 15% of investment. Before 1995 new power projects used to be entirely dependent on foreign aid. Since 1995, 63% of new generation came from 171 small hydropower projects with an average capacity of 12MW, while 4% was from 21 solar photovoltaic and biomass projects developed by local IPPs.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097.jpg" data-media-id="editor_1" data-image-id="20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097" data-rendition-name="original" width="988" height="503" loading="lazy" alt="30 years after Baby Arun"> </figure>  Over three decades, investment in Nepal’s power supply came primarily from new actors that had never before been involved in this sector. The rate of electrification rose from 10% to close to 100% -- sufficient to meet domestic needs during most of the year, and in 2024 made Nepal a net exporter of power to India for the first time in its history. As practically all the new investment in this period went into run-of-river hydro and solar projects, rather than into hydropower reservoirs with seasonal storage, Nepal continues to rely on imports from India during the dry winter months. Surplus electricity generation for export during the monsoon is slated to grow rapidly as another 200 solar and hydro projects are nearing completion of construction, with over 5,000MW of power capacity. Private Power The cancellation of Baby Arun inadvertently accelerated the entry of the private sector into Nepal’s power generation. The government enacted the Electricity Act in 1992 to attract private IPPs and diversify away from total dependence from international aid, but had been struggling for several years to conclude the first agreement with the 60MW Khimti Project. There remained a large gap between the tariff that the government thought was reasonable versus what was demanded by the Norwegian investor Statkraft, and the private sector arms of the World Bank and ADB that were financing the project. The shock of World Bank withdrawal from Baby Arun put tremendous pressure on the government, then led by the UML as it is now. The Bank’s decision to terminate its involvement was ostensibly, at least partially, taken in response to a letter critiquing the project sent by the UML while it was in the opposition.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347.jpg" data-media-id="editor_2" data-image-id="20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347" data-rendition-name="original" width="949" height="446" loading="lazy" alt="30 years after Baby Arun"> <figcaption>BAD NEWS: Newspaper clippings from the early 90s on tender announcement ahead of loan approval (left) and secrecy surrounding environmental assessment (centre) of Arun III before its eventual cancellation in August 1995.</figcaption> </figure>  The government was forced to soften its position and agree to the investors’ terms following the cancellation of Baby Arun. It directed NEA to sign a power purchase agreement (PPA) with Khimti. It was concluded in January 1996, and this was followed by a second PPA in July 1996 with Panda Energy, the American developer of the 45MW Upper Bhotekosi project. The expensive USD-denominated agreements to buy power from two international private producers, with price escalation clauses tied to the New York Consumer Price Index, sent alarm bells ringing. There was worry that the country was heading towards unaffordable tariff rates for the consumer and potential bankruptcy for NEA as a result of inevitable future weakening of the Nepali Rupee. The government had strong-armed NEA into signing these agreements, and realised that concessionary financing terms that Nepal was used to receiving for public sector projects such as Baby Arun and Kali Gandaki A, that included below-market interest rates and 40 years repayment period with a 10 year grace period before starting repayment, were not the norm for private sector investors. Nepal’s status as a less than attractive destination for foreign investment meant that the country had few options but to accept expensive dollar PPAs from international developers with the high commercial interest rates and short repayment periods imposed by their banks because of high investment risks. In the end, the government ended up having to additionally provide a sovereign guarantee in order to close the deal at the insistence of the lenders – committing it to repayment in case NEA defaulted on paying the IPPs. It is reasonable to assume that the extraordinarily high political cost of agreeing to the PPA terms would have meant that no government would have willingly agreed to them in 1995 had it not suffered the trauma of the loss of concessionary-financed public sector projects as large as the Baby Arun. It has taken NEA 25 years to consider offering dollar-denominated PPAs again: to cover the foreign exchange portion of the investment in the 216MW Upper Trisuli-1 and 120MW Rasuwa-Bhotekosi Hydropower projects. It seemed unlikely at the time, but it turned out that the dire situation Nepal found itself in 1995 planted the seed to mobilise investment for affordable power from within the country. Double Whammy After the dual shock of first losing investment in Baby Arun and having to sign expensive power purchase agreements with international IPPs, the first proposal for an alternative strategy to mitigate the risk of foreign currency investment into hydropower projects came from a group of engineers within the Arun III team at NEA. Led by <a href="https://archive.nepalitimes.com/news.php?id=4900">Deputy Director Damber Bahadur Nepali,</a> engineers convinced the leadership that NEA needed to invest in a subsidiary company to build a series of locally-designed and domestically-financed projects that would have lower cost with rupee-denominated PPAs. They registered the Chilime Hydropower Company Limited (CHCL) in October 1995 with 51% shares from NEA, 25% from its employees, and 24% available for the general public, 10% of which was prioritised for local residents at the project site. The 22.1MW project is in Rasuwa on a tributary of the Trisuli, and mobilised debt financing from the Employee Provident Fund, which manages retirement savings for employees of the government, public enterprises, and private sector institutions. CHCL’s experience showed that NEA employees themselves believed that individual hydropower projects with operational independence from NEA could be developed profitably in Nepal by its own engineers -- and they were willing to put their own money on the line. Chilime also demonstrated that there was money in the country, particularly with retirement funds, looking for opportunities for long-term investments. Following completion of Chilime in 2003, CHCL led the formation of three other NEA subsidiary companies that completed construction in 2023 and 2024, producing 168.3MW using fully rupee-tied investment. NEA’s largest subsidiary, the Upper Tamakosi Hydropower Limited, completed construction of its 456MW plant in 2021.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3.jpg" data-media-id="editor_4" data-image-id="20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3" data-rendition-name="original" width="3000" height="1571" loading="lazy" alt="30 Years after Baby Arun"> <figcaption>DAMNED: The $700 million 456MW Upper Tamakosi built entirely with domestic funds before it was destroyed by the September floods last year. </figcaption> </figure>  There were some delays and cost overruns on this run-of-river project, the largest in the country with a final cost of over $700 million -- all of it sourced domestically. The five subsidiary companies launched by NEA have produced almost two times as much new power as NEA has over the past 30 years. Seven other NEA subsidiaries are currently constructing projects to add another 474MW to the national grid. But even more important than NEA subsidiaries have been local IPPs: Nepali companies which have over the past three decades enthusiastically entered the hydropower sector. From a regulatory perspective, the credit for mobilising domestic private investment to engage in power generation goes to Minister of Water Resources Shailaja Acharya, who in 1998 offered a flat feed-in-tariff of Rs4/kWh for hydropower projects under 10MW. This upfront offer removed a major barrier that early developers had faced of having to spend money to carry out a detailed feasibility study before they could even start tariff negotiations with NEA. She had laid the foundation stone of the Chilime project, and proved to be the champion of opening up the sector for domestic IPPs. The guarantee of a PPA with a fixed tariff, irrespective of project specifications, gave small power developers the confidence to apply for survey licenses and invest in feasibility studies so they could directly approach commercial banks and make a case for their project producing required revenue to repay loans. Domestic IPPs started adding power to the national grid in 2002. Their contribution was initially modest, and first projects were small and commercial lenders who took time to be confident about providing debt financing to a sector which had previously not been considered suitable for private sector investment. While the first 10 years were slow, with less than 10MW being added to the grid each year, this increased twenty fold over the following ten years, resulting in the equivalent of a Baby Arun being added by Nepali IPPs to the grid each year. A total of 84 IPPs added 232MW, 328 MW, 454MW, and 400MW of new generation to the grid in 2021-2024 (graph). There was explosive, exponential growth as domestic developers have surged ahead to account for 76% of the new megawatts added to the grid since 2020, compared to 24% by NEA and its subsidiary companies. The megawatts that IPPs are adding have followed the classic ‘hockey stick curve’ with the ‘breakout point’, signaling the rapid growth phase in 2020. Private producers are expected to accelerate new generation in the coming years with 300 solar and hydropower projects adding 11,000MW. Another 166 hydropower and 96 solar projects are currently in the survey stage, and are in line to add another 11,000MW to the construction pipeline. One major challenge is finding financing required for the projects. Domestic investment will no longer be sufficient to finance this ambitious pipeline of renewable energy projects. Project developers as well as NEA and the Electricity Regulatory Commission will have to leverage their substantial experience accumulated through the construction of over 200 projects to attract regional and international investment and hedge the risks of dollar-denominated PPAs. Following the cancellation of Baby Arun, <a href="https://nepalitimes.com/opinion/people-power/decentralising-power-in-nepal">Nepal developed a highly distributed power sector</a>. The national electricity grid is currently supplied with power from a remarkably decentralised array of hundreds of hydropower and solar photovoltaic projects spread across 43 districts and all seven provinces.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b.jpg" data-media-id="editor_6" data-image-id="20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b" data-rendition-name="original" width="1228" height="867" loading="lazy" alt="30 years after Baby Arun"> </figure>  This presents a sharp contrast to the pathway of a few large public sector hydropower projects with a sprinkling of private sector projects that was envisioned as part of NEA’s investment planning when Baby Arun was being considered the front runner for investment. The strategy then was to allow public sector investment in a few large hydropower projects with thermal plants to fill the gap. Knowing what we know now about acceleration of climate change impacts and increased extreme weather events, following this path would have made Nepal’s power sector highly vulnerable. Decentralised generation greatly improves the resilience of Nepal’s power supply as damage to power plants in one part of the country need not affect other areas that have their own generation. Following the investment plan where over two thirds of the country’s power supply would have come from power plants on the Arun River, would have greatly imperiled Nepal’s energy security. All rivers in Nepal are susceptible to flooding from cloudbursts made more frequent by climate change. The Arun River which is fed by glaciers in Tibet is also at risk to glacial lake outburst floods. Bikash Pandey is Director of Clean Energy and Circular Economy at Winrock International. People Power is his regular column in Nepali Times on global energy issues relevant to Nepal. <h2>Decentralised and Diversified</h2> In the 30 years since the cancellation of ‘Baby Arun’: Hydropower projects constructed cover capacities ranging from less than 1MW to 456MW and developed by IPPs from across the country with strong local involvement in purchasing equity shares. Renewable energy sources contributed to the generation mix through solar IPPs that further contribute to climate resilience, and cover shortfalls during low rainfall. The government is committed to solar contributing 10% of the power on the grid. Increasing solar beyond this target and providing incentives to project developers to invest in utility-scale battery storage would further improve resilience. BIG ARUN: The 900MW Arun III project under construction since 2018 at Num in Sankhuwasabha (pictured, below) is a separate initiative by a different project developer using a different financing modality. The ‘Baby Arun’ version of Arun III was cancelled in 1995.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb.jpg" data-media-id="editor_7" data-image-id="20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb" data-rendition-name="original" width="1750" height="1312" loading="lazy" alt="30 Years after Baby Arun"> </figure>

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