Nepal’s September 2025 Crisis, fueled by a social media ban, corruption, and youth frustration, led to PM Oli’s resignation.
- The turmoil reflects rising generational anger and regional instability in South Asia.
About Nepal Crisis
- Trigger of Protests: The government’s order shutting down Social Media (Facebook, Instagram, YouTube, and X) was viewed by young Nepalis as a direct assault on their connectivity, livelihoods, and freedoms, sparking outrage in Nepal.
- Youth-Led Revolt: Protesters, many still in school and college uniforms, turned anger into violent demonstrations that saw parliament attacked, heritage buildings damaged, and police clashes leading to curfews and deaths.
- Underlying Causes: Deep-seated political corruption, extravagant lifestyles of “NepoKids,” repeated instability with 17 prime ministers in 20 years, and unfulfilled promises of the 2015 Constitution had already eroded public trust.
- Economic Stagnation: High youth unemployment, dependence on remittances (33% of GDP), and widening inequality have left Nepal’s younger generation disillusioned with the political class.
- Institutional Transition: With Oli’s resignation, the Army Chief facilitated dialogue that led to former Chief Justice Sushila Karki assuming charge as interim executive, tasked with guiding reforms and rebuilding trust.
- Generational Message: Nepal’s Gen Z population (median age 25) is demanding systemic reform, accountability, and inclusive governance, signalling that the old order of geriatric politics has lost legitimacy.
PWOnlyIAS Extra Edge:
Nepal- Geographical Location
- Landlocked Country: Situated in South Asia, bordered by India to the south, east, and west, and Tibet to the north.
- Himalayan Region: Dominated by the Himalayas, home to Mount Everest, the world’s tallest peak.
- Terai Region: Flat plains in the south, crucial for agriculture and population density.
- Strategic Location: Serves as a buffer state between India and China, with a 1,751-km open border with India.
- Uttarakhand: Nepal shares a 275 km border with Uttarakhand, which is located to the northwest of Nepal.
- Uttar Pradesh: A 599 km border lies between Nepal and Uttar Pradesh, making it the longest border shared by Nepal with any Indian state.
- Bihar: Bihar shares a 344 km border with Nepal, located to the east of the country.
- West Bengal: Nepal shares a 181 km border with West Bengal in the eastern region, close to the Indian-Bangladesh border.
- Sikkim: A 65 km border is shared between Nepal and Sikkim, which lies in the northeastern part of India.
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Impact of Nepal Crisis on India, South Asia, and the World
- Impact on India:
- Security Concerns: Nepal’s political instability creates governance gaps that insurgent groups, criminals, and militants could exploit.
- With a 1,751 km open border, unrest directly threatens India’s internal security, increasing risks in states like Bihar, Uttar Pradesh, Sikkim, Uttarakhand, and West Bengal.
- Economic Impact: As Nepal’s largest trading partner, India’s trade worth $8.5 billion annually is disrupted by instability.
- This hampers supply chains, investments, and creates uncertainty, giving China a chance to expand its economic influence in Nepal.
- Development Cooperation: India’s 573 High Impact Community Development Projects in Nepal are at risk due to instability, weakening India’s role in Nepal’s development.
- Additionally, China’s BRI may expand, competing with India’s aid.
- Hydropower and Energy Cooperation: Political instability in Nepal could delay key hydropower projects like Arun-3 and Phukot Karnali, disrupting energy trade and undermining India’s regional energy security.
- Defence and Security Cooperation: Instability threatens India-Nepal military ties, including Nepali Gurkhas and joint exercises like Surya Kiran, opening the door for external influence, particularly from China.
- Impact on South Asia:
- Regional Instability: Nepal’s crisis adds to South Asia’s instability, following unrest in Sri Lanka (2022) and Bangladesh (2024).
- This weakens regional cooperation frameworks like SAARC and BIMSTEC, hindering collective action on climate change, trade, and security.
- Geopolitical Ramifications: Nepal’s strategic position at India’s northern borders offers China an opportunity to expand its influence through the Belt and Road Initiative (BRI) and military ties, challenging India’s strategic interests.
- Cross-Border Movement and Migration: 3.5 million Nepalis in India make migratory pressures a concern.
- Unrest in Nepal could fuel humanitarian issues and socio-political tensions in Assam and West Bengal, further complicated by the open border.
- Trade Disruptions: Instability in Nepal disrupts regional trade, particularly Nepal’s reliance on India.
- It hampers cross-border logistics, affecting both Indian exporters and Nepali consumers, further straining regional supply chains.
- Impact on the World:
- Global Concerns Over Youth-Led Protests: Nepal’s crisis mirrors a global trend of youth-led protests driven by corruption, economic stagnation, and inequality.
- The rise of digital activism reflects a shift towards online political mobilization, challenging entrenched political systems.
- Weakening Regional Cooperation: Nepal’s crisis undermines regional cooperation in South Asia, weakening frameworks like SAARC and BIMSTEC.
- This instability hampers collective efforts on climate change, economic development, and security, affecting South Asia’s unified stance globally.
- Global Economic and Investment Impact: Ongoing instability in Nepal deters foreign investment and increases reliance on external powers like China.
- The lack of stable governance risks geopolitical competition and shifts global investment focus from long-term growth to short-term stabilization.
- Humanitarian and Refugee Concerns: Prolonged unrest in Nepal could lead to a refugee crisis, placing additional pressure on neighboring countries, particularly India.
- This would exacerbate socio-political tensions and strain local resources in border states like Assam and West Bengal.
PWOnlyIAS Extra Edge:
India’s Recent Neighbourhood Turmoils
- Nepal follows Sri Lanka (2022) and Bangladesh (2024) in facing violent uprisings that toppled governments, shaking South Asia. These crises threaten India’s security, economy, and regional power.
- Sri Lanka Crisis (2022): In 2022, Sri Lanka faced an unprecedented economic crisis, largely due to rising debt, inflation, food and fuel shortages, and poor governance.
- This led to large-scale protests and the eventual resignation of President Gotabaya Rajapaksa. The crisis exposed Sri Lanka’s economic fragility and reliance on external loans and aid.
- Impact on India: India stepped in with emergency aid and credit lines, reinforcing its role as the key stabilizer in the region.
- However, China also sought to extend its influence through the Belt and Road Initiative (BRI), leading to a geopolitical tug-of-war.
- Bangladesh Crisis (2024): Student-led protests against Prime Minister Sheikh Hasina’s government escalated into political turmoil, leading to her ousting in 2024.
- The protests were fueled by rising unemployment, corruption, and lack of political accountability.
- Impact on India: Bangladesh shares an open border with India, and any instability there impacts border security, trade, and refugee management.
- While India maintains close ties with Bangladesh, political instability strains diplomatic relations and affects India’s regional security.
- Nepal Crisis (2025): In 2025, Nepal saw violent uprisings triggered by a social media ban and issues like corruption, nepotism, and economic stagnation. The protests led to Prime Minister KP Sharma Oli’s resignation, followed by a nationwide curfew.
- Implications for India: Nepal’s instability not only threatens India’s border security but also disrupts key hydropower projects and development cooperation between the two nations.
Consequences of Neighbourhood Turmoil for India
- Security Risks:
- Increased Cross-border Infiltration: Political instability in Sri Lanka, Bangladesh, and Nepal exposes India’s borders to insurgents, cross-border criminals, and militant infiltration. The porous borders, particularly with Nepal and Bangladesh, pose direct security risks.
- Disrupted Border Management: Political instability in neighbouring countries hampers border control, leading to an increase in illegal smuggling, trafficking, and insurgency movements.
- Economic Impact:
- Disruptions in Trade: India shares robust economic ties with its neighbours, especially Nepal and Bangladesh. Political instability causes logistical bottlenecks, supply chain disruptions, and delays in cross-border trade, impacting both Indian exporters and Nepali consumers.
- Nepal’s exports to India were valued at $7.32 billion in FY25.
- Strategic Vulnerability: Instability provides China an opportunity to strengthen its economic influence in India’s neighbourhood, particularly through the Belt and Road Initiative (BRI), while India’s regional influence diminishes.
- Investment Hesitation: Political crises deter foreign investments, weakening India’s regional economic influence.
- Geopolitical Consequences:
- Strategic Vulnerabilities: Nepal’s proximity to China’s Western Theatre Command makes it a key geopolitical region.
- Growing Chinese influence in Nepal, especially amidst political instability, challenges India’s strategic dominance in the region.
- Regional Instability: The geopolitical competition between India and China in Nepal and Bangladesh increases regional instability. China’s projects like the BRI in Sri Lanka and Bangladesh make it harder for India to maintain its influence in South Asia.
- Development and Humanitarian Setbacks:
- Delays in Development Cooperation: India’s High Impact Community Development Projects (HICDPs), spanning health, education, and electrification in Nepal, have been delayed due to political instability.
- These disruptions hinder India’s role as a development partner and provide China an opportunity to extend its infrastructure projects in Nepal.
- Hydropower Projects at Risk: Nepal’s hydropower projects like Arun-3 and Lower Arun are vital to India’s energy vision. Instability threatens these projects and weakens India’s energy security in the region.
- Refugee and Migration Concerns:
- Humanitarian Crisis: The instability in Nepal, and other neighbouring countries, leads to refugee inflows into India, especially in states like Assam and West Bengal, creating socio-cultural tensions and competition for resources.
- Strain on Resources: India’s aid and support for refugees put additional pressure on its domestic infrastructure, especially during large-scale crises.
- Diplomatic Strain:
- Erosion of Strategic Influence: India’s ability to influence its neighbourhood is constrained by political turmoil in countries like Nepal. Instability weakens regional forums like SAARC and BIMSTEC, making India’s diplomatic initiatives less effective and allowing external powers like China to advance their own agendas.
- Internal Political Challenges: India’s image is impacted by the perception that it is interfering in its neighbors’ issues, particularly with the recent crisis in Bangladesh. While India aims for stability, it must be cautious not to harm relations with its neighbors.
Way Forward
- Improving Border and Cross-Border Management: India needs to invest in modernized border infrastructure, enhancing security mechanisms like integrated checkposts and digital customs systems to mitigate risks from instability in Nepal and ensure smooth cross-border trade.
- Comprehensive Security and Defence Cooperation: India should work through SAARC and BIMSTEC to create regional crisis management frameworks.
- Expanding joint military exercises and enhancing maritime awareness will bolster India’s defence and security presence in the region.
- Strengthening Regional Connectivity and Infrastructure: India must prioritize regional connectivity projects, like the India-Myanmar-Thailand Trilateral Highway, and expedite infrastructure initiatives in Nepal.
- This will enhance cross-border trade and foster economic interdependence, reducing regional instability.
- Economic and Connectivity-Driven Diplomacy: India should offer reliable alternatives to China’s debt-trap diplomacy through soft loans, development assistance, and infrastructure projects tailored to Nepal’s needs.
- This approach will ensure India remains the primary economic partner for Nepal.
- Leveraging Soft Power and People-to-People Ties: Strengthening people-to-people relations through education, scholarships, and cultural exchanges will solidify India’s position as a supportive partner.
- Programs like Indian Technical and Economic Cooperation (ITEC) can create mutual trust, enhancing long-term bilateral relations.
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Key Challenges for India
- Generational Transition: Engage emerging leaders aged 20-50, many influenced by past anti-India narratives or disconnected from Nepal’s traditional elite politics.
- Beyond Nepal: Expand diplomacy to federal provinces, particularly the Madhesi region, ensuring inclusivity in India’s approach.
- Avoid Personality Politics: Stability must not depend on a single leader or restoration of conservative politics. A multi-party federal democracy serves both Nepal and India’s interests.
- Perception Management: Avoid the “hegemon” label by using quiet diplomacy over loud interventions, building long-term trust.
- Economic Interdependence: Political instability in Nepal brings financial strain. With limited external aid, India can accelerate connectivity, energy cooperation, and trade integration as an opportunity.
Way Forward
- Respect for Sovereignty: Pursue quiet, firm diplomacy without overt interference, avoiding media campaigns or lecturing tones.
- Youth-Centric Engagement: Focus on scholarships, digital exchanges, and cultural initiatives to connect with Nepal’s Gen Z.
- Strategic Patience: Let Nepal’s democracy evolve on its own, while showing that India is ready to be a reliable partner during times of crisis.
- Inclusive Diplomacy: Engage political parties, civil society, and emerging youth leaders, moving beyond Kathmandu’s elites.
- Economic Partnership: Expand hydropower and cross-border energy trade (e.g., exports to Bangladesh via India).
- Upgrade border transport, digital infrastructure, and improve seaport access for Nepali exports.
- Support Nepal’s middle-income goal through investments in technology, climate resilience, health, and education sectors.
- Thick-Skinned Diplomacy: Expect anti-India comments, but stay focused on long-term engagement and respect Nepal’s sovereignty.
- Tactful Image-Building: Ignore “India Out” rhetoric and focus on actions that build trust, strengthening India’s image as a supportive neighbour.
Conclusion
- The political crisis in Nepal underscores the need for India to adopt a proactive, engagement-driven approach. As Kofi Annan said, “The world is not ours to keep, but to improve,” highlighting the importance of long-term cooperation and stability.
Read More About: India Nepal Border, Length, States, Treaty, Impact of Nepal Protests 2025
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12 Sep 2025
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