BRI decides Nepal's China connection

Paras Kharel ()
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Paras Kharel: South Asia Watch on Trade, Economics and Environment, https://sawtee.org/

Research Papers from South Asia Watch on Trade, Economics and Environment

Abstract: The deadly floods of 26 August 2026 obliterated the most important route connecting landlocked Nepal with its northern neighbour. This has raised questions over the future of China's Belt and Road Initiative (BRI) in Nepal, where no project has gotten off the ground since a memorandum of understanding (MoU) was signed in 2017. From the perspective of Nepal's interests, the appropriate yardstick for measuring BRI's relevance and success is not seamless Sino-Indian trade through Nepal but Sino-Nepali connectivity. In the wake of the Himalayan disaster, a situation where significant bilateral initiatives are seen neither for the reconstruction of the corridor to the Rasuwa port nor the building of viable all-season alternative routes will diminish the relevance of BRI to Nepal. The Cooperation Framework, signed in 2024 to operationalize the MoU, has enough space and flexibility for China's flagship international initiative to rise to the occasion. The immediate onus is on the Government of Nepal to assess the physical devastation and determine the way forward to reestablish all-season overland connectivity with China—the Rasuwa route or an alternative or both—and the support it would need from the world's second largest economy to make the restoration quick and durable. This could feed into the “step-by-step implementation plan†, as stipulated in the Cooperation Framework, for the development and execution of the (re)construction project. The new government in Nepal has an opportunity to make (re)building a resilient road link with China its signature project, signaling a decisive shift away from the time and cost overruns that plague infrastructure projects, while also mitigating geological risks and climate-proofing the infrastructure to the extent possible. The BRI rubber is yet to hit the road in Nepal. To the question what has BRI delivered in the Himalayan nation, a well-built, resilient road capped by well-equipped customs facilities could be a simple yet powerful answer.

Keywords: Belt and Road Initiative (BRI); Nepal floods; geopolitics; India; transit; infrastructure (search for similar items in EconPapers)
JEL-codes: B00 F13 F15 F18 F50 F52 F53 F55 O25 (search for similar items in EconPapers)
Pages: 14
Date: 2026-09
New Economics Papers: this item is included in nep-ppm, nep-sea and nep-tre
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