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The KP Sharma Oli-led administration is striving to improve its ties with New Delhi but has yet to achieve substantive results. Despite repeated attempts to mend relations, ruling party leaders and foreign policy experts suggest that bilateral relations between Nepal and India may be deteriorating rather than improving. A series of unresolved issues and missteps on both sides seem to have created a widening gulf.

During his earlier tenure and as an aspiring prime minister, Oli believed that the so-called ‘Delhi Durbar’—referring to India's political establishment—was obstructing his political aspirations. However, in a strategic political maneuver, Oli secured the premiership with the support of the Nepali Congress, a traditional ally of India.

Once in office, Oli took a series of initiatives aimed at establishing a cordial relationship with New Delhi. Like many of his predecessors, Oli hoped to receive an immediate invitation for an official visit to India as a gesture of goodwill. However, this invitation never materialized. Reports from Indian media suggest that New Delhi was initially open to welcoming Oli in August or September. However, India later withdrew the invitation, allegedly due to Oli’s insistence on preconditions—specifically, his demand that India announce steps to resolve the ongoing border dispute.

The border dispute, commonly referred to as the “map row,” stems from competing territorial claims over areas such as Kalapani, Limpiyadhura, and Lipulekh. While Oli has consistently advocated for progress on this issue, New Delhi appears reluctant to prioritize it, viewing it as a sensitive topic better deferred. Diplomats note that this impasse has fueled mistrust and contributed to the stagnation of bilateral relations.

A meeting between Prime Minister Oli and his Indian counterpart Narendra Modi on the sidelines of the 79th UN General Assembly in New York was seen as an opportunity to break the ice. However, according to diplomatic insiders, the meeting failed to yield any significant breakthrough. Analysts suggest that this outcome is emblematic of deeper issues in the relationship.

The unresolved border dispute is not the only factor straining ties. Another contentious issue is the fate of the Eminent Persons Group (EPG) report, finalized in 2018. The report, a collaborative effort by experts from both countries, was intended to recommend ways to enhance Nepal-India relations. However, India has shown little interest in accepting or even acknowledging the report, a stance that has frustrated Nepal.

Since becoming prime minister, Oli has repeatedly highlighted the importance of the EPG report in his speeches and public appearances. He has even used public platforms, such as the launch of former Foreign Minister Kamal Thapa’s book on the Indian blockade, to criticize India’s handling of the issue. During the event, Oli remarked, in a satirical tone, that Indian leaders seem too busy to formally receive the report.

This persistence, according to analysts such as Chandra Dev Bhatta, may have further irritated New Delhi. India, for its part, appears to view the EPG report as an unwelcome complication, and this view is shared by several Nepali political parties, including the Nepali Congress, the CPN (Maoist Centre), and Madhes-based parties. Despite this, Oli’s UML continues to push the issue, creating additional friction in bilateral ties.

Adding to the tensions is Nepal’s decision to align with China’s Belt and Road Initiative (BRI), a global infrastructure development strategy. The agreement, signed under Oli’s leadership, has been a point of contention since its inception. India has long opposed the BRI, citing sovereignty concerns, particularly because certain projects under the initiative traverse disputed territories.

Foreign Minister Arzu Rana Deuba’s recent visit to India seemed aimed at clarifying Nepal’s stance on the BRI. However, her trip failed to achieve its objectives. Indian leaders declined to meet her, reportedly due to either scheduling conflicts or dissatisfaction with her role in supporting the BRI framework agreement. This chilly reception was in stark contrast to her earlier visit in August, during which she was warmly received and even handed over an invitation from Oli to Modi for a visit to Nepal. Modi accepted the invitation but deferred setting a date, suggesting it would be decided through diplomatic channels.

The cooling of ties is not limited to Oli’s government. A senior Nepali Congress leader, speaking on condition of anonymity, acknowledged that even the relationship between the NC and India has soured. According to the leader, India was displeased with the NC for forming a coalition government with the UML. Additionally, India reportedly disapproved of the NC-led government’s decision to sign the BRI agreement with China.

Despite these challenges, certain aspects of Nepal-India relations remain functional. Bilateral mechanisms continue to operate, with regular meetings and consultations taking place. Nepali ministers frequently visit India, and there has been a noticeable strengthening of military ties between the Nepal Army and the Indian Army.

However, a senior Indian academic who closely follows bilateral relations noted that while India remains committed to engaging with the Nepali public, it has grown wary of working with Oli. “Oli’s strategic agreements with China could have implications for India’s security. I don’t foresee a cordial relationship between him and New Delhi in the near future.”

This situation bears similarities to the events of 2020 when the map row first escalated. After a prolonged communication breakdown, India sent Samant Kumar Goel, the chief of its intelligence agency RAW, as a special envoy to meet Oli. The visit facilitated a wide-ranging discussion of bilateral issues and temporarily eased tensions. However, subsequent political instability in Nepal, including Oli’s dissolution of Parliament, derailed progress.

Diplomats and political leaders now suggest that both governments should consider employing a combination of official and back-channel diplomacy to rebuild trust. Despite Oli’s recent efforts to use track two channels to resolve disputes, these initiatives have so far failed to deliver results.

For Nepal and India, the path to repairing relations will require addressing both long-standing disputes and emerging challenges. Progress will depend on a willingness to engage in meaningful dialogue and a mutual commitment to preserving and strengthening a historically close relationship that remains vital for both nations.

Nepal participated in 324 out of the 392 negotiation meetings it was expected to attend during the 29th Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) (COP29) held in Baku, Azerbaijan, from Nov 11 to 22. At an event titled ‘Reflection on Nepal’s Participation in COP29 and the International Court of Justice’, organized by the Ministry of Forests and Environment (MoFE) in Kathmandu on Thursday, Ministry Secretary Deepak Kumar Kharal explained that COP29 featured negotiations on 14 agenda items and 96 sub-agendas, totaling 392 meetings, of which Nepal missed 68.

Each of these 14 thematic agendas was attended by Nepali negotiation teams, led by joint-secretaries specializing in the respective topics. Despite criticism at home over the size of the Nepali delegation sent to COP29, Secretary Kharal attributed the missed meetings to an insufficient number of negotiators. He emphasized that the ministry had learned valuable lessons and would aim for better preparation at COP30 and beyond. “We need to establish a dedicated and permanent negotiation team with clear standards and procedures for inclusive participation, involving national delegates, technical experts, and relevant stakeholders,” Kharal said. He also stressed the importance of capacity building for national delegates and technical experts to enhance negotiating skills.

Manjeet Dhakal, a Nepali negotiator and Advisor to the Chair of the Least Developed Countries (LDC) for the multilateral process under the UNFCCC, highlighted the significant improvement in Nepal’s participation in COP over the years, both in terms of quantity and quality. “In the past, Nepal was represented at COP by a very small team from MoFE. However, these days, representatives from other ministries, such as the Ministry of Foreign Affairs and the Ministry of Finance, as well as private sector actors and civil society organizations, also join the discussions, contributing their expertise as needed.” 

Dhakal added that Nepal’s focus has expanded from a limited set of priorities, such as climate finance and adaptation, to a broader range of thematic areas. “For instance, this year alone, we actively participated in discussions across 14 thematic groups, including carbon emissions reduction, loss and damage, and mitigation. This demonstrates that both the quantity and quality of our participation have improved significantly.”

Nepali officials’ inclusion in various global committees also reflects the country’s growing negotiating power. Dhakal pointed out that Maheshwar Dhakal, joint-secretary at MoFE, serves on the Loss and Damage Fund, while Naresh Sharma, under-secretary at MoFE, is a member of the Adaptation Fund. “Through these committees, Nepal is making meaningful interventions.” 

In addition to thematic meetings, COP29 included sessions of the Subsidiary Body for Scientific and Technological Advice (SBSTA), the Subsidiary Body for Implementation (SBI), the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA), and the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (CMP). These also included 48 coordination meetings of the Least Developed Countries (LDC) Group and ‘G77 and China’, seven plenary sessions, 10 head-of-delegates meetings, and 115 daily thematic coordination meetings, bringing the total to over 500 meetings in which Nepal needed representation.

Buddi Sagar Poudel, the joint-secretary heading the Forest and Watershed Division at the MoFE, also serves as a negotiator representing Nepal at climate conferences. Leading Nepal’s efforts on the ‘Enhanced Transparency Framework’ and ‘Global Stocktake’ themes, he noted that while Nepal has actively engaged in significant negotiations, missing less-priority meetings is inevitable due to the simultaneous nature of numerous sessions. “However, the fact is that we have weak negotiating power. The meetings are multilateral, not bilateral, and sometimes, we feel intimidated in front of hundreds of representatives from powerful countries. There’s a fear of appearing uninformed if we make a mistake. If we fail to communicate our stance clearly and convincingly, we risk offending others or being misunderstood.”

Before COP29, Nepal undertook extensive preparations, including forming thematic groups, conducting consultations and council meetings, training negotiators, organizing a National Climate Summit, and drafting Nepal’s position paper. During COP29, Nepal not only participated in official meetings but also organized side events in pavilions and held bilateral discussions. However, Nepal did not have its own pavilion this time and relied on borrowing space from other countries. This limitation underscored the need for greater logistical and strategic investment in Nepal’s future participation.

To address multilateral challenges, Poudel stressed the importance of building a robust pool of negotiators. “We need individuals with strong research and expertise on the topics being negotiated, but Nepal has very few such resources.” He proposed several measures to strengthen Nepal’s negotiation capacity, including institutional memory and the development of a consistently trained negotiation team. “For instance, if a meeting involves cross-cutting issues related to climate change and energy, we need informed representatives from the Ministry of Energy, Water Resources, and Irrigation, or experts from the relevant field. The same applies to other sectors, like finance.” 

To enhance both the quantity and quality of negotiators, Poudel recommended early training and practical exposure. “Institutions must invest in their negotiators by organizing model COPs and offering practical sessions. Negotiation is a continuous learning process—after attending two or three COPs, a negotiator becomes experienced and can engage more effectively,” Poudel said. Practical exposure would also help build confidence among negotiators when dealing with representatives of more powerful nations.

At COP29, Nepal coordinated thematic presentations and advocated for its position at the LDC meetings. In the G77 and China meetings, Nepal presented the LDC position while also lobbying for its own priorities. According to government officials, Nepal was successful in doing so.

Nepal also participated in other key events, including the Hindu Kush Himalaya Environmental Ministers’ Meeting organized by Bhutan and the High Ambition Coalition Meeting hosted by the Marshall Islands. There too, Nepal got a chance to press its Mountain agenda. Such participation helped Nepal raise awareness about the unique challenges faced by mountain regions, bringing attention to the importance of including mountain-specific strategies in global climate policies.

On the sidelines of COP29, Nepal held numerous bilateral meetings with key stakeholders, including the Secretary-General of the United Nations (UN), the President of the World Green Economy Organization (WEGO), the President of the Maldives, the UN Assistant Secretary-General, and the Executive Director of the Loss and Damage Fund, among others. These discussions provided Nepal with a platform to build alliances and secure commitments for support in addressing climate vulnerabilities. Secretary Kharal noted that UN Assistant Secretary-General Elliott Harris expressed strong support for Nepal’s climate efforts, pledging to provide remarks on behalf of the UN Secretary-General at any event organized by Nepal, provided adequate notice is given. “He was very pleased with Nepal’s commitment to combating the climate crisis, and this is a result of our extensive meetings, negotiations, and efforts on achieving national and global goals.” 

Nepal made significant strides at COP29 by successfully advocating for the mountain agenda and addressing critical climate issues, according to Kharal. “Mountain is not a formal agenda in COP, but Nepal emphasized the inclusion of mountain-based actions and a mountain-to-marine approach to tackle climate change impacts.” Nepal also played a leading role in coordinating and raising awareness about the common mountain agenda, drawing international attention to the unique challenges faced by mountain regions.

In climate finance, Nepal and other climate-vulnerable countries successfully lobbied to increase annual funding from $100bn to $300bn. The country supported the operationalization of the Loss and Damage Fund, which includes a $1.3trn roadmap from Baku to Belém (Brazil), set to begin in 2025. “We strongly said that we won’t take loans for climate finance,” Kharal said. This firm stance highlighted Nepal’s demand for equity and fairness in accessing climate finance.

Additionally, Nepal highlighted the importance of implementing the National Adaptation Plan (NAP) and operationalizing Article 6 of the Paris Agreement for carbon trading. A bilateral agreement with Sweden for carbon trading marked a key milestone in advancing Nepal’s mitigation efforts. This agreement demonstrated Nepal’s growing capability to engage in meaningful international collaborations.

Nepal also demonstrated progress in transparency and gender inclusion, supporting the launch of the Baku Global Climate Transparency Platform and the ‘Building National Capacities of Nepal to Meet Requirements of the Enhanced Transparency Framework of the Paris Agreement’ (CBIT) Project. The country committed to extending the Enhanced Lima Work Plan for Gender and Inclusion until 2035. High-level political engagement ensured Nepal’s active participation in international dialogues, resulting in Nepal’s election as a member of the Adaptation Fund Board and accreditation for the National Trust for Nature Conservation (NTNC). These achievements underscored Nepal’s commitment to inclusivity and accountability in climate action.

Besides these achievements, Dhakal noted other milestones in Nepal’s climate diplomacy. In May 2024, Nepal hosted the International Expert Dialogue on Mountains, People, and Climate Change, which was attended by a representative from Azerbaijan, the host of COP29. Additionally, Nepal was invited to the pre-COP29 ministerial meeting for the first time in 12 years. “These achievements indicate that Nepal’s voice is being heard on the global stage,” Dhakal said. Such recognition marks a shift in Nepal’s global standing, opening doors for more significant collaborations.

While acknowledging the progress, Dhakal stressed that more work needs to be done. “We are never fully satisfied, but looking back at where we started, we have made significant progress.” However, this progress must be supplemented with more strategic planning and capacity-building initiatives to maximize Nepal’s impact in global forums.

Joint-secretary Poudel proposed hiring international trainers to provide specialized training. “Such training is not only crucial for COPs but also for other multilateral meetings and negotiations,” Poudel pointed out. “Moreover, these training shouldn’t be limited to one or two officials but should involve at least 15–20 officers to build a permanent negotiation team.” 

At Thursday’s event, Foreign Minister Arzu Rana Deuba said that through effective negotiations, Nepal should aim to secure at least $10bn annually in climate finance from the designated $300bn global climate fund. She emphasized the need for Nepal to raise its voice more assertively on the global stage for climate justice, climate finance, and compensation. She highlighted the paradoxical situation where Nepal, despite contributing negligibly to carbon emissions, suffers disproportionately from their adverse effects. This underscores the necessity for Nepal to play a more active role internationally to tackle these challenges and advocate for equitable solutions.

Minister Rana also shared that on Dec 9, her delegation, representing Nepal, made its first oral submission on ‘State Responsibilities on Climate Change’ at an international hearing at the International Court of Justice. During the hearing, she forcefully raised the issue of Nepal enduring consequences for mistakes it never made and stressed the need for responsible developed nations to take equal responsibility in addressing the climate crisis and establishing the principle of climate justice. Such advocacy is critical for amplifying Nepal’s voice on the international stage.

Prime Minister KP Sharma Oli also vowed that the government would take the lead in managing climate finance to cope with the climate crisis. He emphasized that climate change issues in mountains are not just the concerns of mountainous countries. “Our efforts should be for protecting the mountains to seas,” he stressed. He urged stakeholders to prepare for COP30 through bold negotiations and a thorough evaluation of COP29. 

Key achievements

• Nepal played a pivotal role in highlighting mountain dialogues and drawing international attention to the mountain agenda.
• Successfully coordinated the collective mountain agenda and ensured high-level political engagement.
• Signed an agreement with the Swedish government for carbon trading.
• Nepal was elected as a member of the Adaptation Fund Board and secured accreditation for the National Trust for Nature Conservation (NTNC).
• Launched two climate-related projects in the presence of a Global Environment Facility (GEF) representative.
• Enhanced the capacity of Nepali delegates in climate negotiations and technical discussions.

Prime Minister KP Sharma Oli’s first official visit to China on Dec 2-5 after assuming office in July has garnered significant attention both domestically and internationally. Central to discussions following the visit is China’s Belt and Road Initiative (BRI), which overshadowed other bilateral issues.

A key outcome of Oli’s visit was the signing of a Framework for Belt and Road Cooperation, marking progress in Nepal’s engagement with the BRI. For the first time, 10 specific projects under the BRI were identified. These projects are divided into two categories: long-term ventures like cross-border railways and tunnel projects, which require significant investment and time, and smaller, less capital-intensive initiatives.

To finance these projects, Nepal and China agreed on an “aid financing modality,” widely interpreted by economists as concessional loans. However, details of the agreement remain undisclosed, leaving even ruling parties unclear about the specifics. Prime Minister Oli has stated that Nepal will accept grants, not loans, under the BRI framework. Upon his return, he assured: “During negotiations, the issue of loans did not arise. Implementing specific projects may require separate discussions.”

The agreement represents a breakthrough in the ongoing narrative that BRI had stagnated in Nepal since the first framework agreement in 2017. Critics had attributed the delay to geopolitical factors, including external pressures. Following Nepal's endorsement of the US-backed Millennium Challenge Corporation (MCC) in 2022, China had been eager to advance the BRI, questioning why Nepal accepted the MCC but hesitated on the BRI. The new agreement allows China to showcase progress, countering claims of inactivity.

For Oli, the deal offers a political advantage. He faced pressure from within his party, particularly senior leaders like former President Bidya Devi Bhandari, to demonstrate progress on the BRI. The agreement has been welcomed by many leaders in Oli’s party, CPN-UML, and is likely to gain support from the CPN (Maoist Center) as well, though its Chair Pushpa Kamal Dahal may downplay the achievement.

The timing of the agreement is notable. In 2023, an implementation plan was nearly finalized under Dahal’s premiership, but he deferred the matter during his visit to China. Fringe communist parties, ideologically aligned with Beijing, have also expressed support for the deal. Notably, Oli’s previous tenure in 2016 saw the historic signing of the Transit and Transport Agreement with China to diversify Nepal’s trade and transit options, cementing his reputation as a leader seeking stronger ties with Beijing.

Foreign policy analysts argue that endorsing the BRI after the MCC helps Nepal maintain geopolitical balance. Internally, the deal has helped avert potential friction between the Nepali Congress (NC) and UML. Oli managed to secure Foreign Minister Arzu Rana Deuba’s backing, unlike Dahal, who failed to involve Narayan Kaji Shrestha from his party during earlier BRI discussions.

However, critics describe the agreement as more symbolic than substantive. The NC, a key coalition partner in the Oli-led government, has expressed concerns over its alignment with prior consensus. Former Foreign Minister NP Saud noted that the agreement contradicts the party’s stance to accept only grants under the BRI. He warned that this issue could escalate within the party. Similarly, NC leader Nain Singh Mahar stated that the deal diverges from the party’s position. The government is now under pressure to disclose the agreement's details to address these concerns.

Soon after his return, Oli met with a task force formed to build consensus between the NC and UML on the deal. The meeting aimed to preemptively address dissatisfaction within the coalition, as some NC leaders opposed to the BRI may leverage the issue politically.

Beyond the BRI, Oli’s visit emphasized implementing past agreements rather than signing new ones, aligning with long-standing Chinese priorities. While some expected Prime Minister Oli to negotiate a loan waiver for the Pokhara International Airport, he clarified that no such discussions occurred. Nine agreements were signed during the visit, accompanied by a joint press statement.

Chinese media highlighted the significance of Oli choosing China for his first bilateral visit. Hu Zhiyong, a researcher at the Shanghai Academy of Social Sciences, observed that this choice signals Nepal’s prioritization of ties with China. Qian Feng, from Tsinghua University’s National Strategy Institute, emphasized Nepal’s strategic importance in maintaining stability in Tibet and its growing role in BRI partnerships. Hu added that South Asian countries like Pakistan, Bangladesh, Sri Lanka, and the Maldives have benefited from BRI projects, and Nepal, too, seeks a share of this “big cake for cooperation.”

As Prime Minister KP Sharma Oli prepares for his official visit to China, political and diplomatic circles are actively debating the state of Nepal’s relationship with India. Observers suggest this move reflects Oli’s strained relationship with New Delhi and points to a shift in India’s approach toward Nepal. Many Indian politicians, bureaucrats, think tanks, and media figures often attribute fluctuations in bilateral relations to the Nepali side.

Critics in New Delhi argue that Nepali leaders often make commitments in India but fail to uphold them once back in Kathmandu. Similarly, Indian authorities frequently accuse Nepali politicians of politicizing critical bilateral issues for party or personal gain. Nepal’s internal political instability and lack of consensus on key foreign policy matters are also seen as contributing factors to the inconsistent relationship. A foreign policy expert from New Delhi remarked that India seeks a reliable partner in Kathmandu but finds it challenging to trust Nepali leaders, who are perceived as unpredictable.

While these criticisms may hold some truth, there’s also a need for reflection on India’s approach toward Nepal.

One current debate centers on Prime Minister Oli’s planned visit to China, a departure from the tradition of a new Nepali prime minister making their first official trip to India. However, this tradition has been broken before; in 2011, for instance, India did not invite then-Prime Minister Jhala Nath Khanal, and in 2008, Pushpa Kamal Dahal visited Beijing before later affirming India as his first political visit destination. India’s decision not to invite Oli this time has stirred speculation in political circles that New Delhi is dissatisfied with Nepal’s recent policy moves. At a time when economic cooperation has been progressing, India's hesitation to invite Oli risks undermining bilateral relations, potentially stirring suspicion and impacting other areas of the partnership.

Soon after the formation of the new government, there were talks about a visit from Indian Prime Minister Narendra Modi to Nepal, though this has yet to materialize. There are differing views within India’s bureaucracy and ruling Bharatiya Janata Party (BJP), leading to mixed signals that complicate Nepal’s understanding of India’s priorities. Unlike in the past, senior BJP leaders have recently engaged with Nepal’s political parties and bureaucracy, but a lack of alignment between India’s political and bureaucratic circles seems to be creating further challenges. India’s handling of issues around trade and assistance has also contributed to tension, with frequent reports of delays in the movement of goods between the two countries, fueling a trust deficit that affects the broader relationship.

There are other factors that call for reflection in both Kathmandu and New Delhi. Among Indian policymakers, there is often a perception that Nepal is solely responsible for any disturbances in bilateral relations. The case of the Eminent Persons’ Group (EPG) report illustrates this imbalance; India’s reluctance to receive the report has affected  bilateral relations, and the situation will likely remain unresolved unless addressed. Other areas, such as the difficulties faced by Nepali citizens in India and along the border, also deserve more attention from Indian policymakers.

Since 2017–18, New Delhi has maintained a policy of engaging with whichever party leads the Nepali government, a position that should continue. While India may have reservations about Nepal’s growing ties with Washington and Beijing, both sides should openly discuss India’s legitimate security concerns. But for now, a significant trust deficit persists between Nepal and India, which could potentially worsen after Oli’s China visit. Both New Delhi and Kathmandu need to actively work on bridging this gap. Although there was hope for renewed bilateral cooperation after 2014, missteps from both sides since 2016 have strained relations. Only through earnest reflection and engagement can meaningful progress be made.