Nepal’s new anti-establishment government is forcing both India and China to rethink how they engage with Kathmandu, according to foreign policy analyst Santosh Sharma Poudel, who says the political rise of Prime Minister Balen Shah marks a major rupture from Nepal’s traditional power structure.
Speaking on The Gist, Poudel said Shah’s sweeping electoral victory reflected public anger against Nepal’s entrenched political elite and a growing demand for governance driven by delivery rather than ideology.
“One of the major expectations was that he would break up the establishment,” said Poudel, who leads the Center for Strategic Affairs at Nepal Institute for Policy Research and is a faculty member at the Central Department of International Relations and Diplomacy, Tribhuvan University, Nepal. The government’s early moves, including removing nearly 1,600 politically appointed officials, were designed to signal a shift toward merit-based governance and away from politicised bureaucracy, he added.
At the same time, Poudel cautioned that the new administration remains inexperienced and is still learning how to govern. He pointed to concerns over Shah’s handling of parliament and foreign policy, saying the government is “getting the benefit of doubt” but must mature quickly.
On relations with India, Poudel argued that many of the recurring tensions stem from fundamentally mismatched expectations between the two neighbours. Nepal, he said, remains deeply dependent on India economically, politically and socially, creating an enduring sense of insecurity.
At the same time, Poudel said many Nepalis are puzzled that India, despite being the larger power, also appears insecure about Nepal’s strategic choices, especially since China expanded its engagement with Kathmandu in the early 2000s.
He suggested that Indian policymakers still broadly view Nepal as lying within India’s sphere of influence, leading to discomfort whenever Kathmandu appears to move beyond Delhi’s orbit.
Poudel also addressed controversy surrounding Prime Minister Shah’s decision not to meet Indian Foreign Secretary Vikram Misri during a recent visit to Kathmandu. While the episode triggered concern in India, Poudel described it less as a diplomatic snub and more as part of Shah’s highly selective and unconventional political style.
Still, he acknowledged the move represented a clear departure from past practice given the depth of India-Nepal ties.
According to Poudel, Nepal’s younger generation is also reshaping the relationship with India. Unlike earlier generations, he said Gen Z Nepalis are less ideological and more pragmatic. India no longer occupies the same central position in their worldview as alternative educational, economic and geopolitical opportunities have expanded.
Yet he stressed that structural realities remain unchanged. India is still the dominant regional power, Nepal remains asymmetrically dependent, and geography ensures the relationship will continue to matter profoundly to both countries.
Poudel argued that the best path forward lies in building more institutional and less personality-driven ties between New Delhi and Kathmandu. Rather than relying on informal political networks, he said both sides should strengthen formal engagement mechanisms between governments and bureaucracies. But despite recurring friction, Poudel insisted the relationship remains resilient.
“Close neighbours will have problems,” he said. “But it’s not a problem that cannot be solved.”
