Prime Minister Balendra Shah has the opportunity to reshape Nepal’s foreign policy and international relations. He carries a historic electoral mandate, and the current international environment is largely favorable to Nepal.
Nepal’s international profile has risen sharply following last year’s GenZ-led political movement and the subsequent formation of a government headed by Prime Minister Balendra Shah. Major powers and regional middle powers alike have shown interest in deepening engagement with Nepal through development assistance, investment, technology transfer, and strategic cooperation.
In recent weeks, both the United States and China have publicly emphasized the need for Nepal to create a more investment-friendly environment, signaling growing international confidence in Nepal’s economic and geopolitical relevance. Yet analysts and diplomatic observers argue that the government’s current approach risks undermining this momentum.
Prime Minister Balen and Foreign Minister Shisir Khanal appear to be showing little urgency in capitalizing on these opportunities. Instead, Minister Khanal has largely focused on customary meetings and the implementation of a diplomatic code of conduct rather than advancing a substantive foreign policy agenda.
The Shah administration has adopted what critics describe as an inward-looking diplomatic posture. Questions intensified after Prime Minister Shah reportedly declined to meet Sergio Gor, US special envoy for South and Central Asia, during his regional visit, citing diplomatic protocol. Observers say the decision reflected an overly rigid interpretation of diplomatic norms, especially considering that heads of government in several South and Central Asian countries reportedly met the envoy.
Similarly, the Prime Minister also avoided direct engagement with Paul Kapoor, the United States assistant secretary of state—reinforcing perceptions that the government prefers limiting high-level diplomatic interactions. In addition, the Prime Minister has reportedly been reluctant to meet foreign ambassadors on an individual basis.
Foreign policy experts note that direct meetings between ambassadors and heads of government are not uncommon, particularly during periods of strategic transition or economic outreach. In many countries, such interactions are viewed as instruments of “personal diplomacy,” enabling leaders to build trust, ease bilateral concerns, and attract investment commitments.
Nepal currently finds itself in a rare geopolitical position, with competing global powers simultaneously expressing interest in economic engagement. Analysts argue that this moment could be strategically utilized to attract foreign direct investment (FDI), diversify partnerships, and strengthen Nepal’s international standing.
However, observers say the government has yet to demonstrate a coherent strategy for leveraging this global interest. While foreign governments have reportedly identified sectors for possible collaboration, the administration has not publicly outlined priority investment areas or launched visible diplomatic campaigns to attract investors. Some observers argue that Minister Khanal has yet to clearly articulate the government’s foreign policy vision. His remarks about transforming Nepal from “a buffer state to a vibrant bridge” have also drawn criticism.
Some analysts believe Prime Minister Shah could use international forums and summits to establish direct channels with world leaders and investors. Participation in major global gatherings, including the upcoming United Nations General Assembly in September, is widely seen as an opportunity for Nepal to present itself as an emerging destination for investment and innovation.
Past experience shows that strong governments in Kathmandu often receive invitations to major global forums. For instance, in 2018, when KP Sharma Oli led a two-thirds majority government, he was invited to the World Economic Forum. Foreign relations analysts argue that the current government’s messaging to the international community could discourage international organizations from extending similar invitations to the Prime Minister.
The debate has also drawn attention to Nepal’s recently introduced diplomatic code of conduct under the Ministry of Foreign Affairs. While the policy was intended to institutionalize diplomatic communication, analysts argue that its implementation has become excessively restrictive. According to officials close to the government, Prime Minister Shah believes that foreign ambassadors should primarily communicate through the Ministry of Foreign Affairs rather than seek individual meetings with the head of government. Supporters of this approach argue that it strengthens institutional diplomacy and avoids the excessive personalization of foreign relations.
However, past experience suggests that when serious friction or misunderstandings arise between countries, it is often the Prime Minister who must directly engage with counterparts at the highest political level. Several unresolved issues with major powers also await engagement at the top leadership level.
Observers further contend that excessive reliance on bureaucratic channels may limit Nepal’s ability to respond flexibly in a rapidly changing geopolitical environment. They argue that proactive outreach from the Prime Minister’s Office could help resolve pending bilateral issues and build confidence among international partners.
Concerns have also emerged over reports that Prime Minister Shah may avoid foreign visits during his first year in office. Analysts argue that this would be a missed opportunity. Given his political standing, they believe he is well-positioned to receive invitations from major powers, providing valuable opportunities to build political relationships and elevate Nepal’s global profile.
