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Nepal, a Himalayan buffer state, plays a pivotal role in India’s regional security and connectivity. The resurgence of monarchical sentiments, fueled by economic distress and political instability, challenges its federal democratic structure. With China expanding its influence China’s export to Nepal reaching $1.76 billion in 2023 , India’s strategic interests in Nepal face evolving geopolitical complexities.

Recent Domestic Political Developments in Nepal

• Resurgence of Monarchism: Growing public discontent with corruption, instability, and weak governance has revived calls for the restoration of Nepal’s monarchy, led by former King Gyanendra.
  For example: Pro-monarchy rallies in Kathmandu, Pokhara, and Baglung have witnessed mass participation, demanding the reinstatement of the Shah dynasty.
• Anti-Government Protests: The ruling K P Sharma Oli government faces criticism for mismanagement, and external influence, leading to increased dissatisfaction among Nepalese citizens.
• Religious and Cultural Mobilization: The Hindu identity narrative is gaining traction, with monarchist supporters associating Nepal’s past stability with its Hindu kingdom status.
• Geopolitical Shifts: Nepal’s political spectrum remains divided between pro-China, pro-India, and nationalist factions, leading to strategic recalibrations.
• Growing India-Nepal Religious Ties: The Gorakhnath mutt’s historical ties with Nepal’s monarchy have gained prominence.

Impact on India’s Strategic Interests

• Rebalancing Nepal’s Geo political Alignment: A shift towards monarchy may tilt Nepal’s foreign policy away from China, creating an opportunity for India to reassert influence.
• Strengthening Religious and Cultural Diplomacy: The Hindu monarchy’s revival aligns with India’s soft power strategy, reinforcing religious and historical bonds between the two nations.
  For example: Janakpur’s Ram-Janaki festival, attended by Indian leaders, strengthens Hindu cultural ties.
• Concerns Over Stability and Border Security: Political unrest in Nepal could trigger migration issues and security challenges along the porous India-Nepal border.
  For example: The Madhesi protests of 2015-16 disrupted trade and strained India-Nepal relations.
• Check on China’s Expanding Footprint: A monarchical Nepal may counterbalance Chinese influence, as past royal governments had closer ties with India than China

Challenges for India in Navigating Nepal’s Political Landscape

• Balancing Monarchy and Republican Forces: Supporting monarchists risks alienating Nepal’s republican political establishment, while opposing them could reduce influence over pro-India factions.
• Managing Anti-India Sentiment: Nepalese nationalism, often fueled by political factions, frames India as an interventionist power, complicating diplomatic efforts.
• Addressing Border Disputes: Territorial issues, such as the Kalapani-Limpiadora dispute, remain a contentious issue affecting India-Nepal relations.
  For example: Nepal’s new political map in 2020, claiming Indian territories, escalated tensions.
• Navigating Chinese Competition: China’s aggressive economic and infrastructure diplomacy makes it harder for India to regain lost ground in Nepal.
  For example: China has funded railway projects, highways, and hydropower plants in Nepal under the BRI.
• Ensuring Nepal’s Political Stability: Political instability in Nepal threatens regional security, affecting trade, migration, and border security.

Opportunities for India in Navigating Nepal’s Political Landscape

• Reviving Historical and Religious Ties: Strengthening cultural diplomacy through religious and civilizational linkages enhances India’s long-term influence.
  For example: The Ramayana Circuit tourism project connects Ayodhya and Janakpur, boosting people-to-people ties.
• Economic and Development Assistance: Increasing investment in Nepal’s infrastructure, hydropower, and connectivity projects can counterbalance Chinese influence.
  For example: The India-Nepal Integrated Check Post (ICP) project improves trade efficiency.
• Leveraging Security and Military Cooperation: Deepening security ties through intelligence sharing and counterterrorism operations helps India ensure stability.
  For example: The Indian Army’s recruitment of Gorkha soldiers maintains military bonds with Nepal.
• Engaging with Emerging Political Factions: India can promote relationships with Nepal’s youth and emerging political leaders, ensuring long-term goodwill.
  For example: India’s youth outreach programs in Nepal create a pro-India mindset among future leaders.
• Promoting Multilateral Engagements: Strengthening Nepal’s participation in SAARC, BIMSTEC, and BBIN initiatives enhances regional cooperation.
  For example: The India-Nepal energy trade agreement boosts Nepal’s role in South Asian power grids.

Way Forward

• Adopting a Neutral and Pragmatic Approach: India should engage with both monarchists and republicans while avoiding overt interference.
• Deepening Economic Ties: Expanding trade, investment, and infrastructure collaboration ensures long-term stability and dependency on India.
  For example: India can support hydropower projects like the Arun-III Dam, ensuring energy exports to India.
• Enhancing Diplomatic Dialogue: Regular high-level talks and crisis management mechanisms can reduce tensions and misunderstandings.
  For example: Annual bilateral summits can address concerns before they escalate.
• Countering China through Soft Power: Leveraging cultural, religious, and people-to-people exchanges can enhance India’s strategic position.
  For example: Promoting Nepal’s pilgrimage tourism in India strengthens ties.

India must adopt a multi-dimensional strategy to navigate Nepal’s evolving politics. Proactive diplomatic engagement, economic cooperation, and people-centric initiatives can counter external influences. Strengthening infrastructure connectivity, energy partnerships, and cultural diplomacy will reinforce ties. A balanced approach respecting Nepal’s sovereignty while safeguarding strategic interests can turn uncertainties into enduring opportunities for regional stability.

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