Could the Asian giants work together to develop an innovative way to stabilize Nepal – and guarantee their own security?

By Sanjay Upadhya

Since the Generation Z-led uprising in Nepal on September 8-9, a subtle yet substantial transformation appears to be unfolding within South Asia’s strategic landscape. The events, culminating in the resignation of Prime Minister K.P. Sharma Oli and the formation of an interim government under former Chief Justice Sushila Karki’s leadership, have prompted both India and China to reevaluate their strategies concerning their Himalayan neighbor.

Might the Asian giants be approaching an unprecedented understanding aimed at stabilizing Nepal without transforming it into merely another arena for great-power rivalry?

Karki’s interim government, primarily comprising individuals affiliated with Western-funded non-governmental organizations and civil society groups, introduces an additional dimension to regional geopolitical considerations. For India, this government appears to be technocratic, pragmatic, and more amenable to cooperation. In contrast to Oli, whose nationalist rhetoric often employed anti-Indian undertones, Karki’s team is perceived by New Delhi as more congenial and less ideological.

Meanwhile, China is closely monitoring these developments with heightened concern. Oli was a trusted partner in China’s endeavors in the Himalayas, supporting Nepal’s participation in the Belt and Road Initiative and the Shanghai Cooperation Organization. Some in Beijing are apprehensive that external support for youth protests may have contributed to Oli’s sudden departure, an event perceived as a strategic setback for China.

For both India and China, Nepal’s instability extends beyond internal political issues. It presents a potential flashpoint that could disturb the fragile equilibrium along the Himalayan range. Although their concerns may differ, they concur on one critical point. Chaos in Nepal could lead to undesirable spillover effects.

India’s primary objective is to aid Nepal in maintaining its democratic framework, leveraging its historical, political, and economic ties. At the same time, it seeks to preserve its traditional sphere of influence in Nepal. Following criticism regarding the 2015-16 economic blockade, however, India has adopted a more cautious approach to intervention. Nonetheless, it remains committed to preventing Nepal from becoming excessively influenced by China.

China’s principal concern is security. Reports suggest that Tibetans in exile participated in the September protests, raising concerns for Beijing. As the Dalai Lama’s succession process approaches, China remains highly sensitive to any instability in Nepal that external actors could exploit to influence Tibetan affairs. It is particularly wary of Western governments and NGOs as well as official Indian and religious groups. Nepal’s extensive border with Tibet and its endorsement of China’s ‘One China’ principle position it as an essential strategic buffer for Beijing.

Despite their rivalry, India and China could reach a mutual understanding in the Himalayas, particularly when addressing common threats. The current circumstances in Nepal may constitute such a scenario. Both nations recognize that unmanaged instability could result in refugee crises, empower extremist factions, or attract Western interference. These are outcomes undesirable to both.

A discreet cooperation between New Delhi and Beijing may gradually evolve through covert diplomatic negotiations concerning Nepal’s political developments. They might exchange intelligence related to cross-border activities and extremist organizations. Furthermore, they could synchronize aid initiatives to prevent redundancy and promote Nepal’s recovery through locally led efforts. Additionally, they may collaborate to support Kathmandu in restoring stability absent of military intervention. One potential approach is to provide political and diplomatic support, grounded in Nepali realities, for the reinstatement of the monarchy – an institution with which both New Delhi and Beijing have historically engaged.

However, this cooperation is likely to remain cautious and pragmatic rather than strategic, as each side remains concerned about the other’s influence. China worries that such engagement could bolster India's influence in Nepali politics, while India fears that collaboration with China might reduce its leverage and enable Beijing to expand its presence through infrastructure or security accords.

The protests that catalyzed Nepal’s political upheaval exemplify a broader generational shift. Dissatisfied with corruption, unemployment, and stagnation, Nepali youth mobilized through digital platforms to form leaderless and decentralized movements. This emerging political wave is unpredictable and challenging to manage, posing difficulties for both India and China. Splits in the Generation Z movement, frustration over the Karki government’s inaction in punishing those who ordered the violent crackdown on the protests, official failure to investigate corruption and to institute electoral reforms have raised worries of another outbreak of unrest.

India is adopting a patient and cautious approach. Recognizing that direct intervention could have adverse consequences given the delicate historical context, India sees an opportunity within Nepal’s democratic development to counter authoritarian influence.

Conversely, China emphasizes the importance of order and stability. The emergence of a government with Western affiliations, coupled with youth unrest and Tibetan activism, poses risks to the regional balance Beijing seeks to uphold.

Nepal’s neighboring countries face the challenge of reconciling two often conflicting objectives: promoting democracy and ensuring stability. India advocates democratic legitimacy, while China prioritizes control and predictability. Recent upheavals demonstrate that neither democracy nor stability alone suffices for sustainable nationhood.

If India and China can find even small areas of shared interest – supporting Nepal’s transition while respecting its sovereignty – it could lead to a major shift in Himalayan geopolitics. For Kathmandu, this could be a positive step where its two main neighbors, instead of competing for influence, see that a stable and independent Nepal ultimately benefits everyone involved.

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