KATHMANDU, Nepal — The former leader of Nepal’s Maoist rebels, Pushpa Kamal Dahal, widely known as Prachanda, was sworn in Monday as prime minister, signaling a potential foreign policy shift in the Himalayan nation caught between international powers.
Since the November election, none of the contenders had the votes to form a government outright. But weeks of backroom intrigue culminated late Sunday, when Prachanda, long seen as a potential kingmaker, emerged victorious with support from Oli, his rival turned comrade.
After waging a guerrilla insurgency beginning in 1996 — a conflict that saw more than 17,000 killed and allegations of war crimes by government forces and rebels — Prachanda, whose nom de guerre means “the fierce one,” signed a peace deal in 2006 and ushered the Maoists into the political mainstream. He previously served as prime minister in 2008 and 2016, with both stints lasting less than a year.
While Nepal has seen a carousel of 13 prime ministers in 16 years, with few leaders offering dramatically new proposals to lift the impoverished economy, this election has revived a geopolitical question with heightened implications in an era of major power rivalries: Would Nepal, strategically perched in the Himalayas, tilt toward China — or toward India and its increasingly close partner, the United States?
“China may be very much enthusiastic” about Nepal’s communist parties uniting to take power, said Lok Raj Baral, a former chairman of the Nepal Center for Contemporary Studies think tank in Kathmandu and a former ambassador to India. “But these parties also have their own limitations, and Nepal is dependent on India, even the West. These parties may also turn on each other tomorrow. It is impossible to predict anything in this country.”
In Nepalese politics, Baral added, “China is active these days, as are the Indians and the Americans.”
Following the announcement of Prachanda’s selection, Indian Prime Minister Narendra Modi and the Chinese Embassy in Nepal both tweeted their congratulations. The U.S. Embassy in Kathmandu issued a similar statement of congratulations and said the United States is “proud to have had robust and longstanding ties with Nepal” and would continue to help the country promote “sustainable economic growth and strengthening democracy and human rights.”
Key figures from all three major countries have visited Nepal in recent months. Modi swept into the Buddha’s birthplace, the Nepalese town of Lumbini, in May. Donald Lu, U.S. assistant secretary of state for South and Central Asian affairs, stopped in Nepal in July. And Li Zhanshu, the third-highest-ranking official in the Chinese Communist Party, visited in September.
Building on policies of successive U.S. administrations, the Biden White House has emphasized bolstering relationships with governments across South Asia to counter China’s growing influence. Under pressure from the State Department in February, Deuba’s government ratified a $500 million infrastructure deal it had signed five years earlier with the U.S. Millennium Challenge Corporation, a foreign aid agency established under President George W. Bush.
But the deal was criticized by Nepal’s Maoists and derided by the Chinese Foreign Ministry as Nepal receiving a poisoned “Pandora’s box” from Washington, while the State Department hit back at Beijing for meddling in its bilateral affairs with the Himalayan nation.
“The Americans were openly saying the Chinese are instigating Nepal to oppose [the infrastructure deal] and the Chinese were saying the Americans are persuading Nepal to act against China,” said Ranjit Rae, a former Indian ambassador to Kathmandu. “This sort of public spat was something new. It never happened before in Nepal.”
This summer, a domestic political furor over Nepal’s ties with the United States forced Deuba and Nepal’s army chief to deny that the army had signed a cooperation agreement with the U.S. National Guard that would pave the way for a deeper military partnership.
The firestorm prompted Deuba to cancel a trip to Washington and the U.S. Embassy to issue a strongly worded statement saying the United States “is not pressuring” Nepal to sign any agreements, nor is it “seeking a military alliance” with Nepal.
Nepal’s foreign alignments looked markedly different during the term of Deuba’s predecessor, Oli, who served as prime minister between 2018 and 2021. He tussled with India over territorial disputes, bitterly accused New Delhi of economic blackmail and claimed Indian forces were trying to unseat him. Oli courted investment from China, including projects under the Belt and Road Initiative that have mostly failed to materialize.
India, meanwhile, has tightened economic and diplomatic screws on the landlocked nation of about 30 million, which has meager manufacturing and agricultural exports — but a surfeit of hydropower potential. In an interview this month with the Hindu, an Indian newspaper, Kul Man Ghising, a senior Nepali energy official, said India had blocked 800 megawatts of potential hydropower exports from Nepal simply because they were generated from Chinese-built dams.
In August, Nepal awarded $2.4 billion in hydropower projects to India, nearly four years after the China Three Gorges Corp. withdrew from the projects, in what was seen as an attempt by Deuba to mend relations with India.
Sushant Singh, a fellow at the Center for Policy Research think tank in New Delhi, said the election of any one leader will not resolve Nepal’s domestic or foreign policy challenges any time soon.
“The real issue is Nepal is finding it very hard to balance between China and India,” Singh said. “As long as it’s a divided polity and a multiparty coalition, all foreign countries have chances to meddle.”