Kathmandu, April 26: Nepal's new government has launched a sweeping review of infrastructure agreements signed with China during the tenure of former Prime Minister K. P. Sharma Oli, amid growing concerns that Beijing has leveraged economic partnerships to exert strategic and political influence over the Himalayan nation. The administration has also declared a moratorium on any fresh agreements with China until the audit is fully concluded.

China's Expanding Footprint in Nepal

According to a detailed analysis published by the Institute for Conflict Research and Resolution (ICRR), a Delhi-based think tank, China's role in Nepal has evolved well beyond conventional economic cooperation. The report states that Beijing's influence now extends into areas of strategic and political interference — including diplomatic pressure on sensitive issues such as Tibet and Taiwan, and attempts to shape Nepal's internal decision-making processes.

The ICRR notes that Kathmandu has seen a significant expansion of China's presence in recent years, raising red flags among policymakers, analysts, and Nepal's traditional partners including India. Critics argue that economic dependency has been deliberately cultivated as a tool of geopolitical leverage — a pattern increasingly visible across South and Southeast Asia.

The Oli Era: BRI Deals and Broken Promises

The inflection point in Nepal-China relations arrived between 2016 and 2018, when the Oli government signed multiple agreements under China's Belt and Road Initiative (BRI), projecting them as transformational milestones that would convert Nepal into a regional connectivity hub. However, critics and independent analysts now point out that many of these deals lacked realistic financial planning and execution frameworks.

The new government is specifically investigating why numerous China-linked projects from the Oli era were stalled, delayed, or quietly abandoned without any transparent explanation to the Nepali public or parliament.

Key Stalled and Frozen Projects

The ICRR report identifies several high-profile projects that have failed to deliver on their initial promise:

The Budhi Gandaki Hydropower Project, awarded to China Gezhouba Group in May 2017, was cancelled in November 2017, reinstated in 2018, and has remained effectively frozen since 2022 with no meaningful progress on the ground.

The proposed Kerung-Kathmandu Railway, announced around 2016–2017, remains stuck at the feasibility study stage as of 2026, reflecting deep technical challenges and the absence of any credible financial closure plan.

The ambitious Trans-Himalayan Multi-Dimensional Connectivity Network, launched under BRI between 2017 and 2018, has not moved beyond conceptual discussions. Cross-border power transmission line projects discussed between 2018 and 2020 also remain unexecuted.

Infrastructure development at the Rasuwagadhi-Kerung border, pushed aggressively between 2017 and 2020, has seen only partial and slow progress. Northern highway connectivity projects initiated between 2016 and 2018 remain incomplete, and the majority of BRI-linked initiatives identified during 2018–2019 have not been implemented even by 2026.

Digital expansion efforts involving Chinese tech giants Huawei and ZTE — active since 2017 — have also progressed unevenly, raising dual concerns over both operational execution and long-term strategic implications for Nepal's digital sovereignty.

Why This Matters: The Debt Trap Debate

The pattern of stalled projects is not unique to Nepal. Across Sri Lanka, Pakistan, and Myanmar, BRI-linked infrastructure deals have faced similar trajectories — grandiose announcements followed by delays, opaque financing terms, and growing sovereign debt burdens. Nepal's decision to audit these agreements signals a rare instance of a smaller nation pushing back on the BRI framework.

Notably, India has long raised concerns about Chinese infrastructure projects in Nepal, viewing Beijing's expanding footprint in its immediate neighbourhood as a direct strategic challenge. The new Kathmandu government's review may offer an opening for India to deepen engagement with Nepal on infrastructure and connectivity on more transparent terms.

What Comes Next

The new Nepali government has made it unambiguous that no fresh agreements with China will be entertained until the comprehensive review of all existing BRI-era projects is completed. The outcome of this audit could reshape Nepal's foreign policy calculus for years to come — determining how Kathmandu balances its relationships with its two giant neighbours, India and China. International observers and regional analysts will be watching closely as the review unfolds in the coming months.