Nine years after joining China’s Belt and Road Initiative, Nepal has yet to complete a single project under it. With a new government in office, the debate must finally shift from whether to how.
By Manoj Kumar Bhatta
Master’s in Structural Engineering from Tianjin University，China.
Whenever Nepal debates prosperity, the conversation returns to the same list: infrastructure, employment, industrialisation, trade, energy and investment. These are not abstract ambitions; they are urgent national priorities. Yet Nepal has repeatedly struggled to convert priorities into results — nowhere more visibly than in its engagement with China’s Belt and Road Initiative (BRI). Nine years after signing the memorandum of understanding to join the initiative in May 2017, and more than a year after concluding a formal Framework for Belt and Road Cooperation in December 2024, not a single BRI project has been completed on Nepali soil.
The question, then, is no longer whether Nepal should embrace the BRI. It is whether Nepal can finally implement selected projects responsibly, transparently and in line with its own national interest.
That distinction matters. The understanding reached with China in 2017 was never merely a diplomatic gesture. It reflected Nepal’s aspiration to improve connectivity, widen economic opportunity and diversify its development partnerships beyond a near-total dependence on the south. Nearly a decade on, the aspiration remains sound; only the delivery has failed.
For Nepal, the BRI should not be read simply as a foreign-policy arrangement. It touches infrastructure, cross-border connectivity, trade facilitation, energy cooperation, industrial growth and long-term economic transformation. Crucially, joining was a state-level decision tied to the country’s broader development vision, not the initiative of any single party or prime minister. Governments have changed repeatedly since 2017 — most recently in March 2026, when a new administration led by the Rastriya Swatantra Party took office after the upheaval of the previous year. The underlying development logic, however, has not changed. Notably, the new government’s own policies and programmes for the coming fiscal year reaffirm the intent to advance cross-border rail connectivity with China. The BRI, in short, deserves to be judged through the lens of national interest, not partisan contest.
International politics offers a useful corrective to Nepal’s habitual anxiety: states act on their interests. India and China, despite an unresolved border and sharp strategic rivalry, sustain well over US$125 billion in annual two-way trade. If two competitors of that scale can separate commerce from confrontation, a small state like Nepal can surely make development decisions on its own terms. The real question for Kathmandu is not whether to side with one neighbour against the other, but whether it can stand firmly for itself.
The case for doing so is written in Nepal’s own economic data. The country still contends with weak infrastructure, high transport costs, limited industrial output, chronic unemployment, a vast trade deficit, underused energy potential and stark regional inequality. The trade gap alone is sobering. In the first eleven months of fiscal year 2025/26, Nepal imported goods worth roughly Rs 382 billion from China while exporting barely Rs 1.6 billion in return — a bilateral deficit of about Rs 380 billion, part of an overall trade shortfall exceeding Rs 1.6 trillion. Speeches and policy declarations will not close that gap. Modern transport corridors, reliable energy links, functional border infrastructure, industrial zones and technical skills will. Several of these are precisely what carefully chosen BRI projects could help provide — if they are planned and executed with discipline.
The real issue is not whether Nepal should stand with one neighbour against another, but whether it can stand firmly for its own national interest.
The projects on the table
The 2024 framework identified ten projects for possible implementation: the Tokha–Chhahare Tunnel; the Hilsa–Simikot Road; the Kimathanka–Khandbari Road, Kimathanka Bridge and Integrated Check Post; the Nepali section of the China–Nepal cross-border railway; the Amargadhi City Hall; the Kerung–Rasuwagadhi–Chilime 220 kV cross-border transmission line; Madan Bhandari University of Science and Technology; the Kathmandu Scientific Centre and Science Museum; the China–Nepal Friendship Industrial Park in Damak; and the Jhapa Sports and Athletics Complex.
This is not a uniform shopping list; the projects differ sharply in economic weight. The Tokha–Chhahare Tunnel would shorten the link between Kathmandu, Nuwakot and the Rasuwagadhi border. The Hilsa–Simikot Road would connect the isolated Karnali region to wider markets. The Kimathanka–Khandbari corridor and check post would strengthen eastern Nepal’s trade. The transmission line could open cross-border electricity trade. The Damak industrial park could support production, jobs and exports — provided it is tied to a realistic industrial strategy rather than a ribbon-cutting.
From agreement to implementation
Nepal must, however, be honest about its own record. Projects that look promising on paper routinely stall on delays, weak planning, unclear financing, administrative drift, political instability and poor coordination among institutions. The BRI has been no exception: more than a year after the framework was signed, most of the ten projects remain at the stage of concept papers and unfinished feasibility studies. The same pattern must not be allowed to repeat.
The debate should therefore move past the tired binary of “for” or “against” the BRI toward harder operational questions. Which projects should be prioritised? On what financing terms? What are the expected economic returns, and the environmental and social risks? Which agencies are accountable, on what timeline, and how will the public be kept informed?
Financing, scrutiny and the debt question
Supporting implementation does not mean waving projects through. Every proposal must face serious scrutiny of economic viability, debt sustainability, environmental and social impact, local participation and long-term maintenance cost. The concern raised most often — the risk of a “debt trap” — deserves a direct answer rather than dismissal. Cautionary examples in the region, from Sri Lanka’s Hambantota port to Pakistan’s Gwadar, show how poorly negotiated infrastructure can become a liability instead of an asset. The ambiguity in the framework’s chosen phrase, “aid assistance financing” — which can mean grants, concessional loans or some blend of the two — makes transparent, project-by-project terms all the more essential.
The prudent course is to match each project to the right instrument: grants and highly concessional loans for public infrastructure, public–private partnerships and commercial capital where returns justify them, and multilateral co-financing where it is available. Nepal’s earlier acceptance of a US$500 million Millennium Challenge Corporation grant from the United States shows the country can already draw on more than one partner. The BRI should widen that toolkit, not narrow it.
Selection should follow national priorities, not the length of the list. It is neither practical nor affordable to launch all ten projects at once. Nepal should first advance those that generate employment, cut transport costs, support trade and balance regional development — roads, tunnels, transmission lines, border facilities and industrial parks that promise relatively quick returns. The most expensive and complex proposal, the cross-border railway, should proceed only after rigorous feasibility, geological and cost–benefit studies. Ground surveys for the Kerung–Kathmandu line are still under way, with final feasibility not expected before the end of 2026 — a reminder that ambition must be paced by evidence.
A balanced neighbourhood policy
Nepal’s geography demands equilibrium. India and China are both indispensable neighbours, and no cooperation with one should be framed as a manoeuvre against the other. The BRI belongs within Nepal’s independent development policy, not within anyone’s geopolitical camp. Its purpose should be trade diversification, north–south connectivity, energy development and economic resilience — a hedge against dependence, not a new form of it. The episode of Pokhara International Airport, which China unilaterally branded a BRI project and which later became mired in a corruption controversy, is a warning about what happens when connectivity gets ahead of transparency.
Domestically, too, the initiative should be lifted out of suspicion and blame. Nepal’s major parties have each, at different times, recognised the need for infrastructure, foreign investment and connectivity. Large projects require policy continuity, institutional coordination and public trust — none of which survive if every change of government reopens settled decisions.
The way forward
The government should now publish a clear action plan. For each project, the feasibility studies, financing terms, environmental assessments, timelines, responsible agencies, cost estimates and progress reports should be placed in the public domain. Parliament, provincial and local governments, experts, the private sector, civil society and affected communities all belong in the conversation. Transparency is not an obstacle to implementation; it is the foundation of the public confidence without which implementation collapses.
Nepal does not need more symbolic announcements. For years it has spoken of its potential — its strategic location, its investment opportunities, its untapped resources. But potential does not build roads, create jobs, narrow trade deficits or connect remote districts to markets. Concrete decisions, credible planning and accountable execution do.
Ultimately, the BRI is not a choice between China and India. It is a choice about Nepal’s own development, prosperity and national interest. If a project can strengthen infrastructure, expand trade, advance energy cooperation and generate employment, it should not be held hostage to indecision. Equally, no project should proceed without transparency, financial prudence, environmental responsibility and genuine national ownership.
Nine years of inertia are enough. With a new government that has staked its credibility on getting things done, Nepal has a rare opening to turn agreements into outcomes. The task is to move the BRI beyond fear and rhetoric into a mature phase built on evidence, national interest and disciplined planning. Neither blind support nor blind opposition will serve the country. A balanced, transparent and result-oriented approach will — and, handled wisely, a handful of well-chosen projects could yet become real instruments of Nepal’s journey toward connectivity, productivity and prosperity.
