Indo-Pacific Strategy and Nepal

The US Indo-Pacific Strategy (IPS) was a hotly debated topic in political and diplomatic circles from 2019 to 2022, though discussions have subsided somewhat since then. In Nepal, discourse on the IPS has been dominated by its security and strategic components, with support for this initiative often viewed as joining the US-led military alliance.

In a veiled reference to IPS, Nepali leaders often say that Nepal cannot and should not join any military alliances as it goes against the country’s long-standing commitment to the non-alignment policy. Bolstering Indo-Pacific security is a key part of the IPS which faced stiff opposition in Nepal after the country was mentioned in the 2019 Indo-Pacific Strategy Report by the US Department of Defense.

Additionally, some US documents claimed that Nepal had joined the State Partnership Program (SPP), prompting Nepal to reportedly request for removal from the SPP. Some SPP documents, however, still include Nepal. Nepali leaders also briefly put off the Millennium Challenge Corporation (MCC) project, stating that it was part of the IPS. Discussions on the IPS in Nepal are framed around these two issues, but the strategy encompasses much more.

For the US and international strategic community, the 2022 Indo-Pacific Strategy unveiled by the Biden administration serves as the guiding document on IPS and its execution. The Trump administration had placed the military component as the central pillar of the strategy which landed it in controversy. So, the Biden administration introduced a new Indo-Pacific Strategy (IPS), which has now entered its third year of implementation. US officials are currently occupied with compiling progress reports on a country-by-country basis. Contrary to the Trump administration’s confrontational approach toward China, the Biden administration’s IPS adopts a different stance. It consists of five pillars: promoting a free and open Indo-Pacific, fostering connections within and beyond the region, driving Indo-Pacific prosperity, enhancing Indo-Pacific security, and building regional resilience to 21st-century transnational threats.  Biden’s IPS focuses more on economic cooperation, capacity building of regional partners, and the view that US resources alone are insufficient. 

A frequently asked question in Nepal is whether the country is already a part of the IPS. This is a tricky question and the answer can be both yes and no. Those who view the IPS solely through the prism of security and military cooperation say Nepal is not involved. However, considering all components of the strategy and its implementation, Nepal can be seen as a part of the IPS. US officials and experts have often clarified that the IPS is an overarching framework outlining how the US, as a superpower, envisions the Indo-Pacific region. Nepal, being the landlocked country situated between India and China, is a high priority in the region. US officials have stated in documents that ‘Nepal can play a vital role in the Indo-Pacific region’ and that Nepal is ‘a valued partner in the Indo-Pacific’.

The broader context suggests Nepal is indeed a high priority for the US within its overarching Indo-Pacific policy. In recent years, the US has stepped up diplomatic engagements with Nepal through high-level visits. These visits have focused on increasing US development assistance to Nepal, attracting private investment, promoting democracy and human rights, curbing corruption, and boosting collaboration across sectors. At the same time, the IMF, World Bank and other financial institutions have also intensified their engagements with Nepal. The MCC compact is a case in point.

Looking at how the IPS is being implemented in Nepal through various US agencies like USAID, there are investments “to strengthen democratic institutions for good governance and human rights; foster sustainable, inclusive, transparent economic growth; and improve resilience to health and climate threats” which is the thrust of IPS.

Let’s consider some specific cases now. The first pillar of the IPS is a free and open Indo-Pacific. Targeting the first pillar, the US has been supporting Nepal across domains like governance, democratic values, security and stability. This includes working with Nepal’s media, civil society and key institutions to build capacity, as well as security cooperation with Nepali forces on disaster preparedness, humanitarian assistance, border security, and more.

US agencies are actively engaged in Nepal across other pillars of the IPS. The US closely coordinates with allies and partners, recognizing its resources alone are insufficient for the region's challenges. Hence, allies like Japan, South Korea, India, Australia, and the UK are also expanding their presence and investments aligned with their own Indo-Pacific outlooks.

While the IPS has many facets, discussions and understanding in Nepal have been narrow. Obviously, there are challenges in dealing with the strategic initiatives, but time has come to make an understanding and position about what IPS means to Nepal. In the lack of an official government position, politicians and bureaucrats face difficulties addressing IPS-related issues and projects, particularly with the US.

As Nepal desperately seeks investment across sectors, the US and its partners are exploring opportunities, alongside emerging economies eyeing Nepal. Rather than shying away or viewing the IPS solely as a military strategy, there is a need for open dialogue to build an accurate understanding. The IPS involves US engagement with Nepal on clean energy, climate change, disaster preparedness and facilitating regional power trading agreements. On energy cooperation, the US is working closely with south Asian countries including India, Bangladesh, Bhutan and Nepal. The US also played a vital role in facilitating a regional power trading agreement in South Asia. Regarding climate change, the US partners with various organizations in Nepal, particularly targeting youth engagement—an area where Nepal can greatly benefit as it already faces impacts from climate-induced disasters. Another associated issue is preparedness for disaster response and relief operations. 

There is a need to build an understanding of the IPS to provide clear thoughts and ideas on how to address these challenges. Better comprehension of the multifaceted IPS can offer Nepal significant benefits. However, there are inherent risks if Nepal fails to develop a uniform and consensus-based position on it.