The bilateral relationship hit a low post-2016. Anti-Indianism emerged as an expression of Nepali nationalism. Some political parties, in particular the Nepal Communist Party (NCP), exploited this to their advantage. Building on these dynamics, during 2018-21, Beijing’s influence in Nepal grew. By 2019, China had replaced India as the largest foreign investor in Nepal. Deuba’s appointment as PM in July 2021 provided an opportunity to rework the bilateral relationship. His April visit focused on energy and infrastructure. His counterpart’s current visit looks at leveraging historical ties to drive economic growth for both countries.
As Kathmandu and New Delhi work towards their net-zero emissions targets, Nepal and India have the opportunity to leverage their relationship to push for economic growth. Increased energy partnerships and improved rail connectivity, along with strengthening infrastructure and logistics for religious tourism, are bulwarks of this model. Partnering to build a Buddhist centre at Lumbini as a net-zero-emissions building underlines that this is not a reset, but an update for the times.