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The Ministry of Foreign Affairs has unveiled the much-anticipated Belt and Road Initiative (BRI) Cooperation Framework between Nepal and China, which has identified 10 projects but leaves the investment modality ambiguous. A closer study of the document indicates that implementation remains an uphill task.

The investment modality for the BRI projects continues to be one of the most disputed and ambiguous issues. The Nepali Congress (NC) has consistently held its position that it will accept only projects built through grants, while the CPN-UML is open to taking loans. Regarding the investment modality, the document mentions that “the two sides will work to ensure technical support and aid financing modalities that suit the needs of the two sides and the requirements for sovereign-initiated projects.”

The document further states that the two sides will conduct an objective analysis of the technical, financial, commercial, and economic feasibility of the projects and ensure value for money for the prioritized initiatives. It also allows for seeking international financial support to finance BRI projects, stating, “The two sides will continue to call upon international multilateral financial development institutions or mechanisms to provide more financial support for promoting connectivity and development.”

As per the agreement, Nepal will welcome and facilitate the establishment of branches of Chinese banks and financial institutions. The two sides will work to expand the use of national currencies in bilateral trade and investment according to practical situations. The framework also highlights elevating bilateral relations to a strategic partnership of cooperation, a vision articulated during Chinese President Xi Jinping’s visit to Nepal in 2019.

For implementation, China has designated the National Development and Reform Commission, together with the ministries of foreign affairs and commerce, to take the lead. Nepal, in turn, has designated its ministries of foreign affairs and finance. These entities will coordinate bilateral cooperation under the framework.

The document makes it clear that the framework does not constitute an international treaty and thus does not create rights or obligations under international law. It is subject to each country’s national laws, regulations, and policies governing specific projects. This provision means that, like the United States’ Millennium Challenge Corporation (MCC), the BRI framework does not require parliamentary approval.

The document also clarifies that project cooperation implemented under this framework does not prevent either side from engaging in similar cooperation with other countries or mechanisms. Disputes regarding the framework will be resolved through consultations and negotiations between the two sides.

The framework came into effect on the date of its signing and will remain valid for three years, with automatic extensions for subsequent three years, unless either party provides a written notice of termination three months in advance. Importantly, the termination of the framework will not affect any ongoing cooperation projects. Recently, China has sought to bring all bilateral cooperation under this framework, but even if it is terminated, ongoing projects will not be affected.

Under the BRI, the document lists 10 infrastructure and urban development projects. These include the Tokha-Chhahare Tunnel, which is of strategic importance for Nepal-China trade and aims to reduce travel time, improve road safety, and support economic growth. A letter of exchange for the project feasibility study has already been agreed upon by both sides. Another significant project is the Hilsa-Simikot Corridor, one of eight North-South corridors aimed at enhancing connectivity between Nepal and China. A letter of exchange for the feasibility study of upgrading the Hilsa-Simikot section has also been signed.

The much-discussed Nepal-China cross-border railway project is expected to traverse Nepal’s Rasuwa district, offering a direct link between the two countries and enhancing bilateral connectivity. The agreement states that after the completion of the feasibility study, the two sides will work to build the China-Nepal cross-border railway.

Other projects include Amargadhi City Hall in Dadeldhura, the home constituency of NC President Sher Bahadur Deuba. The 220 kV cross-border power transmission line is another prioritized project, although discussions on its implementation are ongoing. Additional initiatives include Madan Bhandari University of Science and Technology, Kathmandu Scientific Center and Science Museum, China-Nepal Friendship Industrial Park in Jhapa, and Jhapa Sports and Athletic Complex, located in Prime Minister KP Sharma Oli’s constituency.

The BRI framework has become a tool for political parties, particularly the communists, to advance their agendas, but implementation may face roadblocks due to internal and external factors. Although top politicians from the ruling coalition are attempting to downplay differences between the NC and UML, the two ruling parties are not aligned. UML leaders, including Prime Minister Oli, have stated that BRI involves both grants and loans, while NC leaders remain firmly committed to a grants-only approach.

A major challenge for the framework’s implementation lies in the NC’s stance, as the party is likely to remain a dominant force in Nepal’s politics, whether in power or opposition. While NC President Deuba and his ministers have supported the BRI framework to maintain coalition unity, the party’s position is expected to harden if it leads the government in the future. This makes forging a national consensus on BRI project execution extremely difficult.

Even among communist parties, which tend to speak positively about BRI to please China and their voter base, substantive action on the initiative has been limited. For example, Pushpa Kamal Dahal, chairman of the CPN (Maoist Center), has often praised BRI, but made little effort to advance it during his tenure as prime minister. Bureaucratic resistance further complicates matters. The Finance Ministry, in particular, has historically opposed taking loans for BRI projects due to concerns over economic viability and repayment capacity. Recent corruption scandals have also made bureaucrats wary of projects perceived as serving political interests rather than national priorities.

Nepal’s geopolitical realities and economic constraints pose additional challenges. India, for instance, has expressed reservations about Nepal’s participation in BRI, citing sovereignty concerns, and has advised Nepal to prioritize transparency and safeguard its independence. These geopolitical factors, combined with Nepal’s already significant debt burden, have slowed BRI progress over the past decade and will likely continue to do so.

The selection of projects itself raises questions about their alignment with BRI’s objectives of fostering transformative infrastructure and economic integration. For example, the proposed cross-border railway is a highly ambitious project that Nepal is not financially equipped to undertake, even on a grant basis. Its economic viability is questionable, as is the feasibility of other projects, such as tunnels and industrial parks, that do not align with BRI’s stated goal of improving people’s livelihoods. Securing funding for such initiatives remains a significant challenge.

The NC had decided to accept grants while rejecting loans before the BRI framework was signed during Prime Minister Oli’s visit to China. The party presented this position during internal discussions, and the Oli-led government aligned its proposal accordingly. However, concerns have arisen about “aid financing” being prioritized over grant financing in the framework.

The NC’s position remains that only projects funded through grants should proceed. The party argues that conditional loans, whether from China or other countries, are not in Nepal’s interest, given the country’s poor track record of generating returns from such projects. The experience of the Pokhara International Airport, which has become a financial burden due to its inability to deliver returns, underscores this point.

The government has conveyed Nepal’s preference for grants to Chinese leaders, and officials are optimistic that China will honor this stance in upcoming agreements. The Nepali side hopes that grant commitments will be implemented and that negotiations for the listed projects will proceed smoothly. Technical cooperation and industrial investments are also encouraged, as they have the potential to boost employment and create mutual benefits.

Prime Minister Oli, upon returning from China, reiterated that Nepal will prioritize grants over loans under BRI. The Foreign Ministry has also conveyed a similar message. While discussions around the BRI framework continue, its successful implementation will depend on navigating political divisions, ensuring transparency, and securing economically viable projects.

The United States supports Nepal in maintaining strong relationships with all its neighbors, including China, provided these ties are based on mutual respect and uphold Nepal’s sovereignty and independence, a senior US official has stated. Donald Lu, Assistant Secretary of State for South and Central Asian Affairs, highlighted this message during his two-day visit to Nepal, which concluded on Monday.

Speaking with a select group of journalists, Lu said, “We support Nepal in making its own independent decisions without external influence.” His remarks underscore the US stance on fostering Nepal’s ability to act as a sovereign state in its foreign and domestic policies.

During his visit, Lu held meetings with key political leaders, including Nepali Congress President Sher Bahadur Deuba, CPN (Maoist Center) Chairperson Pushpa Kamal Dahal, and senior government officials. He assured them that US-Nepal collaboration would continue regardless of changes in Nepal’s political leadership. Lu, who has been actively engaged with Nepal for the past four years, played a pivotal role in securing the endorsement of the Millennium Challenge Corporation (MCC) compact in 2022. Reflecting on its progress, he noted, “There has been real progress in implementing the MCC compact, growing the USAID portfolio, increasing US investments in Nepal, and expanding the presence of US volunteers.”

Lu also praised the recent virtual meeting between Prime Minister KP Sharma Oli and global tech entrepreneur Elon Musk. He described it as a promising development for boosting investment and trade between the two countries, calling it “fantastic.” Additionally, he commended Nepal’s political parties for advancing the transitional justice process, saying, “The passage of transitional justice bills through consensus marks a significant achievement, though challenges and difficult steps remain ahead.”

On the issue of climate change, Lu reaffirmed the United States’ commitment to supporting Nepal in addressing its vulnerabilities. He recognized Nepal’s expectations for increased development assistance and private sector investment from the US, expressing optimism about further collaboration in tackling climate-related challenges.

However, Lu refrained from commenting on Nepal’s recent agreement with China on Framework Cooperation for the Belt and Road Initiative (BRI), citing the lack of public disclosure. “I have many questions about the BRI agreement, but I hope it will be shared transparently so Nepali citizens can understand its contents,” he said. He also declined to comment on provisions in the joint statement issued after Prime Minister Oli’s visit to China, particularly those concerning Taiwan. Nevertheless, he emphasized that transparency in such agreements is essential for ensuring public trust and accountability.

Lu’s visit reaffirmed the US commitment to strengthening ties with Nepal while supporting its sovereignty, sustainable development, and independent decision-making.

On Dec 5, Nepal and China signed the Framework for Belt and Road Cooperation (FBRC) during Prime Minister KP Sharma Oli’s visit to China. While both sides have refrained from disclosing the agreement’s full details, the government has repeatedly emphasized that Nepal is not obligated to take loans under the Belt and Road Initiative (BRI). However, this assurance has not fully dispelled concerns, as the exact modalities of financing remain unclear.

Under the agreement, Nepal’s Ministry of Foreign Affairs and China’s National Development and Reform Commission will act as the implementing agencies. It has been clarified that the BRI is not a bilateral treaty; rather, it will be governed by the laws of each participating country. Additionally, Nepal retains the option to collaborate with third countries in implementing the projects listed under the BRI.

The agreement refers to “aid financing,” a term that has sparked diverse interpretations. The ruling coalition insists that loans are not part of the arrangement, but the absence of concrete definitions leaves room for ambiguity. It is also unclear how this framework differs from the 2017 BRI agreement. Officials have revealed that 10 projects have been shortlisted under the BRI, ending years of speculation about its implementation in Nepal.

Chinese state news agency Xinhua offered some insights, citing the National Development and Reform Commission (NDRC). According to Xinhua, the agreement emphasizes the principles of planning together, building together, and benefiting together. It seeks to enhance cooperation in critical areas, including the economy, transportation, trade, and industrial development. The NDRC hailed the agreement as a step toward deepening political trust between Nepal and China and fostering high-quality Belt and Road collaboration.

In an interview with CGTN, Prime Minister Oli described the FBRC as a comprehensive umbrella agreement that encompasses diverse sectors such as infrastructure, culture, health, and education. He highlighted its potential to align Nepal’s development strategy with China’s, calling the agreement a significant milestone in bilateral cooperation.

Officials involved in the negotiations stated that the FBRC reflects Nepal’s proposals, with minimal changes from China. A previous draft implementation plan sent by China in 2020 had stalled due to Nepal’s indecision. In 2023, the Pushpa Kamal Dahal-led government came close to signing the plan, but the effort was abandoned at the last moment. Ahead of Oli’s visit, the Nepalese government formed a task force to revise the document, which ultimately produced the FBRC.

Semanta Dahal, a task force member, explained in an Onlinekhabar article that the Chinese draft resembled a broad agreement rather than a focused implementation plan. The FBRC, on the other hand, prioritizes economic and project development cooperation, retaining only the already-listed projects under the BRI. Dahal noted that a dedicated mechanism for future BRI discussions would be established soon.

The FBRC identifies 10 projects, providing clarity after years of uncertainty surrounding BRI’s implementation in Nepal. These projects include the Tokha-Chhare tunnel, the Hilsa-Simikot road, the Kimathanka-Khandbari road and bridge, the Keyrung-Kathmandu trans-border railway, Amargadhi City Hall, a 220kV transmission line, Madan Bhandari University, Kathmandu Scientific Center and Science Museum, the China-Nepal Industrial Park in Damak, and the Jhapa Sports and Athletics Complex.

Of these, the railway and tunnel projects are long-term endeavors requiring at least a decade to commence. Feasibility studies for these projects are underway with Chinese assistance. Negotiations for road projects are in progress, while the construction of the transmission line depends on a power trade agreement between the two countries. The remaining projects are relatively small, reinforcing Nepal’s cautious approach to avoid taking on large-scale loans under the BRI.

China has established mechanisms like the Silk Road Fund (SRF) and the Asian Infrastructure Investment Bank (AIIB) to support BRI initiatives. By mid-2023, the SRF had committed $22bn across 75 projects, while the AIIB, with 106 members, had approved $43.6bn for 227 projects globally. These initiatives span transport, energy, public health, and other sectors, promoting connectivity and sustainable development.

In recent years, China has shifted its focus toward smaller development projects that promise immediate returns. This approach reflects a growing reluctance to fund large infrastructure projects that lack financial viability. Consequently, Nepal and China have avoided selecting major projects under the BRI, except for the railway and tunnel.

The FBRC represents a cautious yet significant step in Nepal-China relations. While it marks progress in operationalizing the BRI, questions remain about financing and execution. The agreement signals Nepal’s intent to address its development needs without over-relying on debt. With ten projects identified and mechanisms for future negotiations in place, the FBRC lays the groundwork for collaboration, even as it underscores the challenges of aligning development ambitions with financial realities.

Dec 5, 8 am

Tinkune

When I entered the tea shop at 7:15 am, a man in his fifties was sharing his thoughts on the recent local body by-elections. He said the candidate of the Nepali Congress (NC), Devendra Pathak, lost in Kathmandu-16, despite campaigning by top party leaders like Gagan Kumar Thapa and Bishwa Prakash Sharma. Candidate of Rastriya Swatantra Party (RSP), Rojina Shrestha, was elected from Kathmandu-16. The man, however, was delighted about NC’s victory in Kirtipur Municipality.

In one corner of the tea shop, a man, who happened to be a former government undersecretary, seemed impatient at the conversation that painted NC in a favorable light. Turning to me, he said, “Election results don’t reflect a party’s national popularity. Local factions and dynamics play a significant role in shaping outcomes.”

The first gentleman was continuing this time about the Maoist Center’s historical dominance in Kirtipur since the insurgency era. “Many Maoist leaders sought refuge there,” he explained, emphasizing how caste and community ties continue to shape voting patterns.

The focus then shifted to RSP, with one participant arguing that its urban popularity endures. “Urban voters are less ideological,” he said. “They’re disillusioned with NC and UML. This dissatisfaction dates back to the Panchayat era and has lingered.”

The NC sympathizer acknowledged internal challenges, especially in candidate selection. “If the party selects the right candidates, it could become the largest political force in the next election,” he asserted. After some thought, he backed away from his statement, and suggested that UML’s robust grassroots organization could secure it the top spot instead.

Someone asked about voter turnout, estimated at around 60 percent. The group attributed the decline to three factors: frustration with political stagnation, the exodus of youth abroad, and apathy among younger voters, many of whom haven’t registered. I shared a related insight from my college class earlier in the week: out of 25 students, only four were registered voters, and just one had cast a ballot in the last election. A participant grimly predicted even lower turnout in 2027 as more youth leave the country.

The discussion broadened to Nepal’s leadership crisis. “Our leaders don’t read,” one participant lamented. “They lack vision and fail to devise meaningful reforms.” Another added, “Politicians surround themselves with opportunistic cadres, not experts who can offer genuine solutions.”

Corruption was another hot topic. “Chaos and corruption are rampant,” someone said. “Accountability is non-existent. Those involved must face penalties.”

As the debate on NC and UML continued, a man who worked for a government ministry weighed in with his argument. He said business people and contractors were taking over the NC, sidelining honest and intellectual individuals. “Look at the lawmakers from districts around the Kathmandu Valley—Kavre, Sindhupalchok, Dhading, most of them are contractors consolidating their influence,” he said. “We can’t expect anything positive from such leaders.”

The first gentleman who had been steering much of the earlier discussion tried to shift gears. “Politics aside, I focus on my health,” he said, his voice tinged with pride. While he didn’t disclose his age, he hinted at his good health compared to his peers. “Take care of your body. Avoid diabetes, hypertension, and aim for 80 years. Every Nepali should strive for a healthy life,” he advised.

His effort went in vain, as the conversation led to Prime Minister KP Sharma Oli’s recent China visit and the murky agreements on the Belt and Road Initiative (BRI). A participant raised concerns over the term “aid financing,” questioning whether it referred to a loan or a grant. A man reading a newspaper cited former Finance Secretary Rameshwar Khanal, who described it as a concessional loan. Another voice interjected, claiming it was merely political jargon meant to confuse the public.

As I left the tea shop, I was pondering the complexity of our socio-political landscape.

Prime Minister KP Sharma Oli’s first official visit to China on Dec 2-5 after assuming office in July has garnered significant attention both domestically and internationally. Central to discussions following the visit is China’s Belt and Road Initiative (BRI), which overshadowed other bilateral issues.

A key outcome of Oli’s visit was the signing of a Framework for Belt and Road Cooperation, marking progress in Nepal’s engagement with the BRI. For the first time, 10 specific projects under the BRI were identified. These projects are divided into two categories: long-term ventures like cross-border railways and tunnel projects, which require significant investment and time, and smaller, less capital-intensive initiatives.

To finance these projects, Nepal and China agreed on an “aid financing modality,” widely interpreted by economists as concessional loans. However, details of the agreement remain undisclosed, leaving even ruling parties unclear about the specifics. Prime Minister Oli has stated that Nepal will accept grants, not loans, under the BRI framework. Upon his return, he assured: “During negotiations, the issue of loans did not arise. Implementing specific projects may require separate discussions.”

The agreement represents a breakthrough in the ongoing narrative that BRI had stagnated in Nepal since the first framework agreement in 2017. Critics had attributed the delay to geopolitical factors, including external pressures. Following Nepal's endorsement of the US-backed Millennium Challenge Corporation (MCC) in 2022, China had been eager to advance the BRI, questioning why Nepal accepted the MCC but hesitated on the BRI. The new agreement allows China to showcase progress, countering claims of inactivity.

For Oli, the deal offers a political advantage. He faced pressure from within his party, particularly senior leaders like former President Bidya Devi Bhandari, to demonstrate progress on the BRI. The agreement has been welcomed by many leaders in Oli’s party, CPN-UML, and is likely to gain support from the CPN (Maoist Center) as well, though its Chair Pushpa Kamal Dahal may downplay the achievement.

The timing of the agreement is notable. In 2023, an implementation plan was nearly finalized under Dahal’s premiership, but he deferred the matter during his visit to China. Fringe communist parties, ideologically aligned with Beijing, have also expressed support for the deal. Notably, Oli’s previous tenure in 2016 saw the historic signing of the Transit and Transport Agreement with China to diversify Nepal’s trade and transit options, cementing his reputation as a leader seeking stronger ties with Beijing.

Foreign policy analysts argue that endorsing the BRI after the MCC helps Nepal maintain geopolitical balance. Internally, the deal has helped avert potential friction between the Nepali Congress (NC) and UML. Oli managed to secure Foreign Minister Arzu Rana Deuba’s backing, unlike Dahal, who failed to involve Narayan Kaji Shrestha from his party during earlier BRI discussions.

However, critics describe the agreement as more symbolic than substantive. The NC, a key coalition partner in the Oli-led government, has expressed concerns over its alignment with prior consensus. Former Foreign Minister NP Saud noted that the agreement contradicts the party’s stance to accept only grants under the BRI. He warned that this issue could escalate within the party. Similarly, NC leader Nain Singh Mahar stated that the deal diverges from the party’s position. The government is now under pressure to disclose the agreement's details to address these concerns.

Soon after his return, Oli met with a task force formed to build consensus between the NC and UML on the deal. The meeting aimed to preemptively address dissatisfaction within the coalition, as some NC leaders opposed to the BRI may leverage the issue politically.

Beyond the BRI, Oli’s visit emphasized implementing past agreements rather than signing new ones, aligning with long-standing Chinese priorities. While some expected Prime Minister Oli to negotiate a loan waiver for the Pokhara International Airport, he clarified that no such discussions occurred. Nine agreements were signed during the visit, accompanied by a joint press statement.

Chinese media highlighted the significance of Oli choosing China for his first bilateral visit. Hu Zhiyong, a researcher at the Shanghai Academy of Social Sciences, observed that this choice signals Nepal’s prioritization of ties with China. Qian Feng, from Tsinghua University’s National Strategy Institute, emphasized Nepal’s strategic importance in maintaining stability in Tibet and its growing role in BRI partnerships. Hu added that South Asian countries like Pakistan, Bangladesh, Sri Lanka, and the Maldives have benefited from BRI projects, and Nepal, too, seeks a share of this “big cake for cooperation.”

Chinese President Xi Jinping has reaffirmed Nepal’s importance in China’s neighbourhood policy and expressed commitment to enhancing the strategic partnership during a meeting with Prime Minister KP Sharma Oli.

Prime Minister Oli is currently on a four-day official visit to China. Tuesday’s talks between the two leaders mainly focused on deepening the bilateral ties as well as strategic partnership between China and Nepal. The two countries elevated their comprehensive bilateral relation to the strategic partnership during Xi’s Nepal visit in 2019.  

During the meeting, Xi expressed appreciation for Oli’s firm commitment to promoting friendship between the two sides, emphasizing their shared geography and long-standing relations, according to China’s state news agency, Xinhua. “These efforts aim to help Nepal transform from a landlocked country to a land-linked country,” it added.

Noting that next year marks the 70th anniversary of the establishment of diplomatic relations between China and Nepal, Xi said China places Nepal at an important position in its neighborhood diplomacy, and is willing to work with Nepal to consolidate traditional friendship and push for new progress in advancing the strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity. On the occasion, the Chinese leader also announced to provide 500m RMB for Nepal’s development. 

Prime Minister Oli, in response, reiterated Nepal’s commitment to implementing the projects under Belt and Road Initiative (BRI). He also expressed Nepal’s openness to welcome Chinese investments. He also emphasized Nepal’s commitment to One-China policy, assuring that Nepal would never allow its territory to be used for anti-China activities.    

Earlier, Oli held delegation-level talks with Chinese Premier Li Qiang. In the meeting Li said that China is willing to work with Nepal to implement the consensus reached by the leaders of the two countries, continue to consolidate and deepen political trust, and push for the deeper development of relations. 

China firmly supports Nepal in exploring a development path suited to its national conditions, and stands ready to enhance the synergy of development strategies with Nepal, leverage the leading role of high-quality Belt and Road cooperation in bilateral cooperation, Li told Oli. He added that China encourages competent Chinese enterprises to invest in Nepal, and is willing to import more quality products from Nepal.

During Oli’s visit, nine agreements were signed between the two countries, covering a range of areas aimed at bolstering bilateral cooperation. These agreements included economic and technical cooperation, development of Tokha-Chhahare Tunnel, trade promotion, export of thermally processed buffalo meat products to China, and a development plan spanning 2024 to 2029. Additional agreements involved cash assistance, handover of the reconstructed nine-storey Basantapur Tower, volunteer Chinese language teachers, and collaboration between Nepal Television and China Media Group.  

While Oli’s China visit marks a significant progress in the bilateral and strategic ties between the two countries, uncertainties persist regarding the implementation of BRI. It is still unclear whether the two sides discussed the much-talked BRI implementation plan.  Just before Oli’s visit, Nepal had proposed a BRI framework agreement to China. 

Officials say the Chinese side rejected the Nepali proposal of accepting only grants under the BRI. According to sources, both sides, however, agreed to continue discussion on the issue after Oli’s visit.

Prime Minister Oli also met Zhao, chairman of the National People’s Congress (NPC) Standing Committee, on Tuesday. During the meeting, Oli said that Nepal and China have treated each other with respect and equality, engaged in mutually beneficial cooperation, and have set a good example of friendly coexistence between countries with different social systems and sizes.

Zhao said that China is willing to work with Nepal to implement the important consensus reached by the leaders of the two countries, expand high-level strategic cooperation, and advance the China-Nepal strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity. He added that the NPC of China is willing to strengthen exchange at all levels with the Nepali Parliament, share legislative experience, and provide legal guarantees for pragmatic cooperation between the two countries.

Prime Minister KP Sharma Oli began his four-day official visit to Beijing on Monday at the invitation of his Chinese counterpart, Premier Li Qiang. This marks Oli’s first bilateral foreign trip since assuming office for the third time in July, signaling a significant step in Nepal-China relations.

During the visit, Oli is set to meet Chinese President Xi Jinping and hold bilateral talks with Premier Li. Discussions will focus on mutual interests, including connectivity, infrastructure development, trade and transit, energy cooperation, tourism, and fostering people-to-people ties, according to Nepal’s Ministry of Foreign Affairs.

The two countries are also expected to sign some key agreements. Notably, China will provide a $20mn grant to Nepal, alongside a new bilateral development cooperation framework to be implemented from 2025 to 2029. Projects such as the Tokha-Khahare Tunnel Road, the Special Economic Zone at the Korala border, and the feasibility study for a cross-border railway line are likely to advance, Information and Technology Minister Prithvi Subba Gurung said. Oli has chosen China over India as his initial foreign destination, breaking the longstanding practice of Nepali prime ministers beginning their tenure with a visit to India. 

Oli’s choice to visit China first rather than India is “not unexpected, but rather a reflection of the increasing policy choices of South Asian countries,” Lin Minwang, a deputy director of the Center for South Asian Studies at Fudan University, told the Global Times on Sunday. He further noted after coming to power, Maldives President Mohamed Muizzu also chose to visit China first instead of India, and other South Asian countries are actively developing relations with China. “This reflects changes in Nepal's domestic politics and its policy toward China.”

Besides choosing China for his first official trip, Oli’s visit is drawing attention for other reasons as well. One of them is China’s Belt and Road Initiative (BRI). 

A task force from the two parties has revised the draft of the BRI implementation plan initially proposed by the Chinese side in 2020. The document, now titled Framework for Cooperation instead of BRI Implementation Plan, has been sent to the Chinese side for initial negotiations, though it is yet to be finalized.

This trip comes at a time when China is pushing to strengthen BRI cooperation. There are concerns over what sort of agreement will be signed with Beijing on BRI on which India and western countries are cautioning Nepal to maintain transparency and avoid possible debt burden. Domestically, there are also suspicions that the coalition of Nepali Congress and CPN-UML could crack, as two parties have divergent views on how to deal with China. Oli has a history of fostering strategic agreements with China, including the landmark Transit and Transport Treaty of 2016. 

China’s Foreign Ministry Spokesperson, Mao Ning, highlighted the importance of Oli’s visit in strengthening bilateral ties. “Despite changing international and regional dynamics, China-Nepal relations have grown steadily over the past 69 years, exemplifying equality and win-win cooperation between countries of different sizes,” she said. Mao emphasized deepening strategic trust, advancing high-quality BRI cooperation, and achieving progress in the China-Nepal partnership.

The Nepali Congress (NC) and the CPN-UML seem to have agreed on a common position on how to approach China’s Belt and Road Initiative (BRI). While the initiative has garnered support domestically, it remains uncertain whether China will accept Nepal's proposed terms, according to multiple sources.

A task force from the two parties has revised the draft of the BRI implementation plan initially proposed by the Chinese side in 2020. The document, now titled Framework for Cooperation instead of BRI Implementation Plan, has been sent to the Chinese side for initial negotiations, though it is yet to be finalized. The NC and UML are of the view that projects under the BRI should be funded through grants rather than loans. This condition may come up in high-level discussions, as BRI traditionally does not include provisions for grants.

During a meeting with her Chinese counterpart, Minister for Foreign Affairs Arzu Rana Deuba reiterated this same position agreed by the two coalition parties. However, Beijing has yet to formally respond. A senior Nepali official remarked, “The document prepared by the Nepali side is vague, but it is progress. It signals that Nepal is moving forward with the  BRI, which might encourage the Chinese side to sign the document.” According to the official, the Chinese side is desperate to change the narrative that since the signing of the BRI framework in 2017, not a single project has been executed in Nepal.

A UML leader privy to the development said: “The document does not mention about the investment modality which will be settled during the project implementation phase.”

Given the great power rivalry which has also affected the BRI project, the Chinese officials may accept the document. China is reportedly eager to alter the perception of inaction regarding the BRI in Nepal. Beijing has highlighted the Pokhara International Airport as a BRI project, despite its unclear status within the initiative. During a recent meeting in Chengdu, Chinese Foreign Minister Wang Yi emphasized the progress in the joint construction of the BRI, including the Trans-Himalayan Multi-Dimensional Connectivity Network, which he claimed benefits the Nepali people.

Under the BRI framework, Nepal and China will discuss areas such as connectivity, investment, trade, tourism, agriculture and infrastructure development. If China agrees to Nepal’s proposed document, specific projects may be announced during Prime Minister KP Sharma Oli’s visit. CPN-UML General Secretary Shankar Pokhrel suggested that the new agreement could pave the way for mobilizing Chinese resources for Nepal's development.

According to officials, Chinese officials have also emphasized implementing agreements reached over the past decade, including those signed during President Xi Jinping’s 2019 visit to Nepal, rather than pursuing entirely new ones. The two countries are also discussing potential cooperation in the energy sector, including the construction of  cross-border transmission lines, a likely agenda item during Oli’s visit.

Additionally, Beijing is expected to seek renewed commitments from Nepal on the One-China policy. During her meeting with Wang, Foreign Minister Deuba reaffirmed Nepal’s adherence to the policy, asserting that Tibet (Xizang) and Taiwan are integral parts of China. She also assured that Nepal would not allow its territory to be used for activities harming China’s interests, nor support foreign interference in China’s internal affairs.

Raunab Singh Khatri, co-founder of the Aranika Project, a research firm that studies Nepal-China relations, recently published an article commenting on the evolving nature of the BRI. He noted: “The area of China’s international engagement has diversified; from hard infrastructure under the BRI, the trend slowly and gradually shifted toward digital and health connectivity, especially during the Covid-19 pandemic.”

“Will the BRI projects even take off in Nepal? The consensus among Nepali politicians is that Nepal can only accept grants and not loans—but the dilemma is that BRI is, by and large, a commercial project that is backed by “The Big Four” Chinese policy banks, Silk Road Fund, EXIM Bank, CDB, etc.”