But that status seemed to waver when Nepal’s parliament ratified a key deal in February that brought it closer to the United States.
Through the Millennium Challenge Corporation (MCC) Nepal Compact, the US pledged $500 million for road and energy infrastructure development in the landlocked country.
But the move met with much opposition as it was seen as a way for the US to use the Himalayan nation as a tool to counter Chinese influence. There were also concerns that the pact could eventually compromise Nepal’s sovereignty.
The MCC Nepal Pact was finally signed after the US government made it clear in writing that it was not part of Washington’s Indo-Pacific strategy and that the Nepalese Constitution takes precedence over the agreement.
Analysts believe that Nepal will inevitably figure into the US regional strategy as it refocuses on the Indo-Pacific.
Professor Harsh Pant of the Observer Research Foundation told the big power contest that the US has to offer a better alternative to smaller nations like Nepal, which can “decide for themselves what they want to do” with it.
After analysts blamed Sri Lanka’s financial crisis in part on costly Chinese debt, many people in Nepal have become wary of China’s footprint in their country. Meanwhile, observers see this as an opportunity for neighboring India to bring Kathmandu into its fold.
If Oli unseats Deuba in the upcoming elections, Nepal could well move further away from New Delhi and closer to Beijing, the experts said, stressing that the elections could not only decide relations with its neighbors but also influence geopolitics in the country. South of Asia.