Analysing Nepal’s Foreign Policy: A Hedging Perspective

Published date01 August 2022
Date01 August 2022
Subject MatterResearch Articles
Research Article
Analysing Nepal’s
Foreign Policy:
A Hedging Perspective
Raunak Mainali1
Wary of their significant dependence on India, Nepal has pursued a policy of
hedging in order to mitigate potential harm. The harmful consequences of this
dependence were on display in 2015 when a blockade along the southern border
with India resulted in massive economic losses for Nepal at a time when the
nation was recovering from an earthquake. To insure themselves against a similar
fate in the future, Nepal has chosen to hedge by pursuing closer relations with
China. This article analyses and outlines how Nepal has deployed this hedging
strategy. It argues that Nepal’s relations with China, albeit improved, is not
enough as India still retains a monopoly on Nepal’s economy. The increasingly
hostile and polarised nature of Sino-Indian relations also means that hedging is
not a sustainable policy, and if the rivalry between the regional powers worsen,
Nepal may be forced to pick a side.
Nepal, India, China, South Asia, hedging
‘Amity to all, enmity to none’ was the phrase employed by the former Prime
Minister K. P. Oli to capture the intended spirit of Nepali foreign policy (MOFA
Nepal, 2019). The quote, which was relayed by then Foreign Minister, Pradeep
Gyawali, in a press release emphasises Nepal’s commitment to its constitutionally
embedded non-alignment policy. While Gyawali highlighted the recent advances
in dealings between Nepal and other nations, the speech began as Nepali foreign
affairs mostly do, with references to India and China.
Journal of Asian Security
and International Affairs
9(2) 301–317, 2022
© The Author(s) 2022
Reprints and permissions:
DOI: 10.1177/23477970221098491
1 Centre for Social Change, Kathmandu, Nepal
Corresponding author:
Raunak Mainali, Centre for Social Change, Kathmandu 44600, Nepal.
302 Journal of Asian Security and International Affairs 9(2)
Nepal has always been aware of its vulnerable position between its two larger
neighbours. This has ultimately led to the decision to constitutionally guarantee
their non-alignment foreign-policy approach in order not to upset either of their
powerful neighbours. Recently, in order to reduce their dependence on India and
deter possible security risks, Nepal has pursued a strategy of hedging between its
two neighbours. Nepal and India share historical, cultural, social and religious ties
as well as an open border around 1,850 kilometres long. As the border with China
to the north is obstructed by the Himalayas, India provides Nepal access to the
international market. Unlike Bhutan, who also find themselves landlocked
between China and India, Nepal views dependence on the latter in a negative
light. Nepal does not fear a direct military confrontation with India, but their main
insecurity arises from possible encroachment of Nepali sovereignty and economic
threats, both which have arisen as a result of the 1989 and 2015 blockades. To
create economic flexibility and security insurance, Nepal has pursued closer
relations with China, despite already having close ties to India. This is symptomatic
of a hedging strategy, and there is a necessity to analyse the foreign policy actions
of Nepal through this lens and assess its effectiveness. The escalating rivalry
between India and China also makes Nepal an interesting case study as Nepal has
largely been accepted as falling under the Indian sphere of influence but has
recently pursued policies that are antagonistic towards their southern neighbour.
With the end of the cold war and a move away from the orthodoxy of the
balancing and bandwagoning dichotomy, hedging has appeared in international
relations literature but is mostly confined to the analysis of East Asian nations and
their approach to China and the USA. Studies by Goh (2005), Roy (2005) and
Zhao and Qi (2016) are some of the many examples of the hedging literature
relating to East Asian nations. The extensive security guarantees of the USA in
East Asia as well as the lucrative attraction of the Chinese economy has made
hedging an attractive foreign policy choice for East Asian nations. As a result of
this, hedging is mainly applied in the context of East and Southeast Asia with the
exception of some studies such as Toje (2010) and Korolev (2016). This article
aims to analyse the foreign policy of Nepal through the lens of hedging as well as
outline the possible risks associated with pursuing this strategy in a region hosting
intense Sino-Indian rivalry.
This article has several contributions to the existing literature. The concept of
hedging was formulated to explain the foreign policy actions of East Asia to
accommodate a rising China as the traditional concepts of balancing and
bandwagoning was unable to do so. However, few studies have applied this
framework outside of the East Asian region, and this article aims to address this
lacuna by adapting hedging within the South Asian context. Second, the security
component of hedging usually refers to security in the traditional sense of military.
As mentioned previously, the concept arose out of the East Asian geopolitical
context where China has emerged as a military threat to other nations in the region
mainly as a result of territorial disputes. This article will add to the works of
Ciorciari (2019) as well as Lim and Mukherjee (2019) who have expanded
hedging to non-traditional forms of security such as economic security. Nepal
does not face a direct military threat from either of its neighbours but faces a large

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