In the noisy, crowded landscape of Nepali politics, the meteoric rise of Prime Minister-designate Balendra Shah and his party, the Rastriya Swatantra Party (RSP), represents a rare political anomaly. While veterans of the 2008 republic traded barbs, the rapper-engineer-turned-mayor bypassed traditional campaigning for a “monastic” silence. His victory in Nepal’s post-Gen Z parliamentary election on March 5 secured a historic mandate for an alternative force he joined a mere six weeks before the polls. Throughout the campaign, Shah spoke for barely thirty minutes, avoided media interviews and notably never once asked for a vote.

His unapologetic critiques of the political establishment during his tenure as Kathmandu’s mayor, mirrored a generation exhausted by stale ideological party politics. In a nation with a median age of twenty-five, Shah’s reputation as a disciplined, clean reformist promising better governance became a viral mandate. His calculated silence mirrored these frustrations, positioning him as the ultimate outsider for an electorate eager for results.

Beyond domestic politics

While capitalising on domestic old-guard fatigue served Shah as a winning electoral strategy, Nepal’s hard geopolitical reality remains stubbornly unchanged. In Nepal, political shifts rarely remain purely domestic, often prompting debates about foreign influence given its geography wedged between the rivalries of India and China.

Yet, Shah, however has sought to counter this by projecting an image of a staunch nationalist. As mayor, his symbolism was deliberate: hanging a “Greater Nepal” map in his office as a direct retort to the “Akhand Bharat” mural in India’s new Parliament House, and briefly banning Indian films. Simultaneously, he signaled caution toward Beijing by dropping a China-backed industrial park from his election manifesto. By distancing himself from large-scale geopolitical projects, Shah reframed the narrative, asserting a sovereignty that felt local, visible, and unapologetically independent.

Balancing ties with India and China

Historically, Nepal’s politics followed rigid ideological scripts. The Nepali Congress, the country’s oldest liberal force, leaned toward Delhi, while communist factions like CPN- UML maintained proactive affinities with Beijing. And at times, the ideological rhetoric from Kathmandu stretched far beyond the Himalayas, from debates over Venezuela’s regime change to contentious political statements on the Ukraine war, issues largely peripheral to Nepal’s own priorities. Under Shah, this era of predictable ideological signaling may finally be fading. His minimalist approach and by speaking less about the world’s ideological battles, Shah’s personality itself can be potent strategic asset to Nepal, but it is immediately replaced by a different kind of geopolitical pressure that needs sustained diplomatic communique.

India remains Nepal’s most consequential partner, linked by an open border, “Roti-Beti” social bonds, and accounting for a significant share of its trade, supplying virtually all of its petroleum, and emerging as the primary market for Nepal’s burgeoning hydropower exports. Meanwhile, China has deepened its footprint through major infrastructure financing, such as $216 million Pokhara International Airport. Intended as a regional gateway, its underutilisation is viewed in Kathmandu as a casualty of the broader India-China friction, particularly New Delhi’s hesitancy to facilitate air routes for Chinese-financed infrastructure.

This is perhaps inaugural diplomatic crucible for Balendra Shah. Having invested heavily, Nepal cannot afford for such massive infrastructure to remain a “white elephant.” The “monastic” outsider must now navigate a landscape where India is indispensable and China is influential. Meanwhile, Washington, a development cornerstone for seven decades, has pivoted from an aid partner to a high-stakes strategic interest partner, with recent post-election congratulations explicitly hinting at “shared security goals.”

But the first “baptism by fire” for the Shah administration may well lie in the volatile West Asia. With millions of Nepalese migrants’ lives and critical energy lifelines tied to the Persian Gulf caught in an escalating US-Israel-Iran War, India’s logistical depth as a regional first responder offers an indispensable synergy for contingency planning to Kathmandu. This is where Balen’s nationalist doctrine must meet the hard reality of strategic pragmatism. The new leadership remains untested in conventional diplomacy.

An opportunity for India

This moment offers a rare opening for New Delhi to recalibrate. India must move past the coercive shadow of the 2015 blockade and what is widely perceived in Kathmandu as outdated impulse for political micromanagement. New Delhi must recognise this transition not as a tilt away from divergence from India preferences but as a new opening for modern partnership that respects the domestic rise of ‘Nepal First’ politics. Shah’s mandate mirrors India’s own tectonic shift in 2014; in Shah, Nepal has found its “strongman” archetype, a leader whose personal charisma and promise of technocratic reform have dismantled a decades-old establishment. Whether this energy can be institutionalised remains to be seen, but for now, the “choreography” of diplomacy must account for a significantly more complex script.

In the end, Nepal’s geopolitical reality remains unchanged even as its politics transform at home. India’s proximity will always matter most, China’s influence will remain structural reality, and world powers like the U.S. will continue to pursue its strategic interests with renewed rigor. Ultimately, Nepal’s voters were not adjudicating between global strategies, but seeking domestic renewal. For Balendra Shah and the RSP, bashing the “old guard” is a potent domestic strategy, but it carries zero currency in the cold-eyed theater of international relations.

While the streets celebrate a new era, the ‘multipolar crosshairs’ of the Himalayas remain unforgiving. Balendra Shah represents a rare, raw moment of new possibility. To ensure that this is not just a brief pause before the old guard returns, Nepal’s new leaders must trade populist fumes for ‘strategically sober’ diplomacy. Because in a crowded neighbourhood, the unstrategic nationalist can quickly become someone else’s strategy.

(Bibek Raj Kandel is an analyst and AsiaGlobal Fellow at the University of Hong Kong and a graduate of Harvard Kennedy School.)

Published – March 23, 2026 10:50 pm IST

This week marked a new chapter in India’s 20 year old interest in a port in Iran- Chabahar. On a visit to Tehran, Shipping Minister Sarbananda Sonowal and his Iranian counterpart oversaw the signing of an agreement to develop the Shahid Beheshti terminal- one terminal in the warm water port just off Iran’s Sistan Baluchistan province.

Broadly, here are the terms of the agreement.

The Long term contract signed is for 10 years- earlier, the two sides had signed an MoU in 2016, part of a trilateral agreement with Afghanistan for the development of the port, but it could not be converted into a long term contract for a number of reasons- changes in the jt venture partners, the slow pace of Indian investment etc.

India has committed US $120 million, and a credit line of US $250 million to develop the terminal. This is a small amount compared to the other big projects in the region, but it’s a start.

Thus far the terminal has a modest operation, 6 harbour cranes, and other equipment worth $25 million- to handle about 8.5 million metric tonnes of cargo, mostly between India and Iran and India and Afghanistan, but the plan is for a 4-phase development of its capacity to 82 million tons per year and 32 jetties.

The Contract is between India Ports Global and Ports and Maritime Organisation of Iran. Earlier the joint venture was with the Aria Banader Iranian Port & Marine Services Company. The contract contains a clause to extend the lease of the port terminal to India after 10 years as well.

But here’s where trouble struck. In a US State department briefing, its spokesperson, when asked about the deal, raised the risk of potential sanctions. When asked if there would be an exemption for this, the spokesperson said no.

That “No” at the end is the most significant part of his statement. Why? Because in 2018, the US had introduced an amendment to its Iran Freedom and CounterProliferation Act (IFCA), allowing an exemption from very stringent sanctions on any company doing business in Iran –

1. For Humanitarian aid to Iran

2. For any assistance and support to Afghanistan (which is what Chabahar was designated as).

3. A temporary waiver of 6 months to India, China and other countries for the import of oil from Iran. While China continued its oil imports from Iran after the 6 months ran out, India bowed to the Trump administration’s pressure, and stopped all oil imports.

The US State department has not clarified its statement so far- but if it is changing policy, it may be for a number of reasons:

1. The US pulled out from Afghanistan in 2021, and no longer wishes to support Kabul under the Taliban regime.

2. The US wants to dissuade India from broadening Chabahar’s scope to the INSTC and trade with Russia – even with the exemptions, India has had to slow down investments in Chabahar, has found it hard to find suppliers and insurers for its shipments, and plans to build the Chabahar Railway line have been dropped.

3. The Biden administration is getting tougher on Iran, especially under fire from Trump in an election year, and is narrowing its exemptions for Chabahar as well.

On the other hand, many believe the US is unlikely to follow through on its threat, given its previous records on threatening sanctions.

1. In 2017, the US had threatened sanctions on Chabahar as well as India’s oil imports from Iran and Venezuela. On Chabahar it gave an exemption, but India pulled out of a number of oil investments and cancelled imports from Iran and Venezuela.

2. Prior to 2018, US had threatened India in 2012 to cancel Iranian oil imports, but New Delhi at the time had not agreed, no sanctions followed.

3. With Russia- the US threatened CAATSA sanctions over India’s purchase of the S-400 systems, but has not followed through, although its acted against China and Turkey.

The US has banned a handful of Indian companies in its sanctions regime, including one for selling dual use tech to Russia, but nothing like it has done with other countries including China- a testament to India’s importance.

Why Chabahar, Iran connectivity ties matter

1. Ties with Iran part of traditional diplomacy, alternative to Pakistan, access to central asia.

2. Chabahar and INSTC balance India’s west asia policy with I2U2 and IMEEC.

3. India is part of multilateral platforms with Iran: SCO and BRICS.

4. Backtracking on oil imports, other deals has cost India, Chabahar is now the lynchpin of ties

Worldview Take

With all the problems the US has this year, including Ukraine, Gaza, the Iran-Israel tussle, ties with China and others, it is hardly likely to open a new front with India over Chabahar. However, New Delhi must keep an eye on US Congress, which could take a tougher line, even after US elections, even as it moves to shore up flagging ties with Iran. Eventually, diplomacy is the art of letting others have your way, and not one of constant brinkmanship.

Script and Presentation: Suhasini Haidar

Production: Shibu Narayan and Ananyaa Desikan