Police stand guard near ballot boxes as polling stations close during the general election in Kathmandu on Nov 20, 2022. (PRAKASH MATHEMA / AFP)

As efforts in Nepal to form a new government gathered pace, the country’s top political leaders said that the incoming administration must continue to maintain close ties with both China and India to ensure the Himalayan nation’s prosperity and development.

Veteran leaders cutting across party lines believe Nepal needs to maintain a balance in its foreign policy and that the new government that will be formed after the Nov 20 parliamentary elections should take forward friendly relations with all countries, especially its two major neighbors.

Nepal will maintain good relations with China and India under a coalition government led by the Nepali Congress (NC), which is emerging as the largest party in parliament, said senior NC leader and former deputy prime minister Prakash Man Singh

Nepal will maintain good relations with China and India under a coalition government led by the Nepali Congress (NC), which is emerging as the largest party in parliament, said senior NC leader and former deputy prime minister Prakash Man Singh.

Singh told China Daily that Nepal will follow a non-aligned foreign policy. “We will maintain good friendly relations with all the countries including the neighbors by keeping national interest and welfare of the people in focus,'' said Singh. 

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"We need help and cooperation from all the friendly countries towards attaining Nepal’s development and economic prosperity," he added.

Nepal has enjoyed special relations with India for decades and the country will continue to preserve the ties as the two nations share thriving trade links and common religions and customs. At the same time, Kathmandu will also maintain close and friendly relations with China, said Bimalendra Nidhi, a senior NC leader and former deputy prime minister.

The NC, led by incumbent prime minister Sher Bahadur Deuba, is set to emerge as the single-largest party after winning 53 seats so far in the general election. The ruling five-party alliance has won 85 seats, against 55 seats won by the Opposition alliance led by Communist Party of Nepal (Unified Marxist-Leninist), or CPN-UML, according to data posted on the website of Nepal’s Election Commission. 

In the 275-member House of Representatives, 165 are elected through direct voting, while the remaining 110 will be elected through a proportional system. A party or a coalition needs 138 seats to win a clear majority.

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The ruling alliance includes the Nepali Congress led by Deuba; Communist Party of Nepal (Maoist Centre) led by Pushpakamal Dahal, also known as Prachanda; CPN-Unified Socialist headed by Madhav Kumar Nepal; as well as the Lokatantrik Samajwadi Party and Rashtriya Janamorcha.

Former prime minister and CPN-United Socialist chair Madhav Nepal did not rule out the possibility of finding a new ally to form a government. NC will emerge as a single largest party but it will not have the numbers to form a government, he told China Daily. 

“Let the final result come. We have still not decided to whom we will ally,” said Nepal. He said the new government has to maintain cordial relations with both India and China because Nepal has no other option.

Former prime minister and chairman of CPN-UML K P Sharma Oli has proposed to CPN (Maoist Centre) chairman Prachanda that they should work together to form a new government, a senior leader close to Prachanda said. After breaking an alliance with Oli around 18 months ago, Prachanda sided with the NC and formed a five-party coalition government under the leadership of Deuba.

The opposition has campaigned to counter India’s dominance in Nepal. On the other side, Deuba, widely known to be pro-India, called during the campaign for balancing Indian and Chinese power, said Anand Sharma, a businessman in New Delhi who hails from Kathmandu.

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In 2016, when Oli was the prime minister, he signed a Transit and Transportation Agreement that enabled Nepal to access Chinese land and sea ports, ending Nepal’s sole reliance on India for trade. In 2017, the country joined Beijing’s Belt and Road Initiative. The next year, Oli visited China to deepen ties. Chinese President Xi Jinping visited Nepal in October 2019 and committed $493 million in aid to the country.

"They (India and China) are big powers. Our policy of neutrality and non-alignment will be genuinely followed and implemented," Oli said in an interview with Reuters on Nov 2.

China has huge investments in Nepal, while India has longstanding social, economic and cultural links with its Himalayan neighbor. Therefore both countries are interested in what is happening in Nepal, said Sukh Deo Muni, a former diplomat and professor emeritus at the School of International Studies, Jawaharlal Nehru University in New Delhi.

According to official Nepal data, Chinese investors committed $195.74 million in foreign direct investment to Nepal during the first six months of the 2021-22 fiscal year.

Nepal’s foreign minister Narayan Khadka visited China and held a meeting with his Chinese counterpart, Wang Yi, in Qingdao in August this year. Following the meeting, Wang announced that Beijing would provide $119 million to develop infrastructure in Nepal. Earlier, in March, Wang visited to Nepal in a bid to strengthen ties.

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China’s outgoing ambassador to Nepal, Hou Yanqi, took note of Nepal’s parliamentary elections in an article last month in The Kathmandu Post, and expressed hope that bilateral relations would “continue to reach new levels.”

Nepal’s $38 billion economy is expected to expand 4.7 percent in the current fiscal year that began in mid-July, according to Asian Development Bank. Nearly one-fifth of country's people are said to live on less than $2 a day. 

The writer is a freelance journalist for China Daily.