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Nepal’s Floods Upset Its China-India Balancing Act – The Diplomat

by Asia Today Team
September 5, 2026
in Business
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Nepal’s current floods, which have killed at the least 1,280 individuals whereas over 5,600 are nonetheless lacking as of this writing, rank among the many nation’s worst pure disasters. Preliminary estimates put financial losses at $2.56 billion. However the catastrophe’s penalties will lengthen far past the speedy human and financial toll.

It has additionally undermined the efforts of successive post-2015 governments to realize extra geopolitical steadiness, largely by the event of latest transport, commerce and transit services with China.

As a landlocked nation wedged between India and China, Nepal has lengthy sought to protect its strategic autonomy by balancing the affect of its two neighbors.

For quite a lot of causes, India, which surrounds the nation on three sides, has blockaded its open border with Nepal 3 times since 1969 — most just lately in 2015. That 12 months, Nepal promulgated a brand new structure that had failed to handle India’s considerations. At different occasions, New Delhi has brazenly meddled in Nepali politics.

To scale back that vulnerability to Indian strain, Nepali rulers have felt the necessity to improve engagement with China, the northern neighbor.

After the 2015 blockade, the then-Ok.P. Sharma Oli authorities signed a slew of agreements with China to determine new commerce and transit hyperlinks. As a part of the method, a major funding was made to improve the Kerung border level (often known as Gyirong on the Chinese language facet) into an all-weather worldwide crossing. A lot of China-Nepal commerce has regularly shifted to Kerung from Tatopani, the earlier essential artery of bilateral commerce that was badly broken by the 2015 earthquakes.

Sadly, the current floods actually washed away a lot of the funding round Kerung. There may be not even a hint of the customs buildings and customs yards — on both facet of the border.

After the flooding of the Kerung border, China has additionally shut down Tatopani, citing doable landslides on the Nepali facet. (Beijing has additionally lengthy been cautious of the doable use of the Tatopani route by “Free Tibet” activists.) All cross-border visitors has been diverted to Korala, the third worldwide border crossing between Nepal and China. However Korala is just not a simple crossing, neither is there a lot when it comes to cross-border commerce infrastructure. In addition to these three, the three different designated factors for Nepal-China commerce are minuscule and restricted to dealing with native commerce.

Within the huge image, Nepal’s commerce with China, which was already restricted, might be additional restricted after the floods.

India is Nepal’s largest commerce companion, with China coming in at a distant second. The floods will exacerbate an already troubling imbalance. However Kathmandu’s choices are restricted. Rebuilding Kerung or upgrading Korala to deal with extra visitors would require lots of money and time. Delivery items from China is an possibility, however a expensive one. The nation’s dependence on India will thus additional improve. In addition to the prospect of some Indian items changing Chinese language ones in Nepali markets, Nepal will now have to make use of Indian ports to import even very important provides from China.

With the floods knocking out round 10 % of Nepal’s electricity-generation capability, the vitality dependence on India may go up too.

The Rasuwa floods will strengthen the argument that geography leaves Nepal with no lifelike substitute for India as its principal industrial and transit companion, with China serving primarily as a supplementary possibility. And as India’s industrial clout will increase in Nepal, so will its strategic sway. Nepal, in spite of everything, shares a protracted, flat open border with India and the 2 nations are certain collectively by cultural and household ties.

Nepali Prime Minister Balen Shah had already difficult Nepal’s exterior relations along with his unconventional method, initially avoiding particular person conferences with international envoys and senior visiting officers. Beijing, with whom Nepal will now must work carefully to rebuild broken infrastructure alongside the border, was significantly displeased at what it noticed because the Nepal authorities’s repeated failures to uphold the “One China” coverage.

But rebuilding Nepal’s northern connectivity may itself have geopolitical penalties. Kathmandu will want Chinese language technical and monetary help to revive broken border infrastructure. China can even be averse to involving different nations in reconstruction within the delicate area. The floods may subsequently produce a peculiar type of twin dependence: larger reliance on India for speedy commerce and transit, whilst Nepal turns to China to rebuild the infrastructure wanted to cut back that very reliance.

For the 36-year-old Nepali prime minister, this creates a separate political dilemma. Shah should rely extra on India for commerce and connectivity whereas additionally being underneath strain to keep up a protected distance from New Delhi — in line with the needs of core nationalist constituencies.

The mountainous commerce routes to China have lengthy been susceptible to landslides and earthquakes, limiting the northern neighbor’s viability as a commerce and transit various to India. The current catastrophe has highlighted this weak point like by no means earlier than.

The floods is not going to change Nepal’s must steadiness India and China. What they’ll change is the feasibility of 1 essential part of that technique.



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