Central Himalayas to take centre stage at Balen Shah's first India visit

Nepal PM likely to come in Nov, says finance minister Swarnim Wagle; reworking trade treaty also on table

During Nepalese Prime Minister Balendra ‘Balen’ Shah’s maiden visit to India, the top agenda on the table will likely be discussions on saving the central Himalayas from ecological destruction, according to the country’s Finance Minister Swarnim Wagle.

 

Other topics set to be heavily featured during the visit, which could take place in November, are reworking the India-Nepal trade treaty and boosting Indian investments across sectors, especially in hydropower and connectivity projects. 

 

On Sunday, Nepal’s Foreign Ministry said it has set up an environment diplomacy section to institutionalise and strengthen diplomatic efforts on climate change and environmental issues. It is the first time the ministry has set up a dedicated section on climate change-related issues.

 

New Delhi is also discussing with Dhaka the dates for Bangladesh PM Tarique Rahman’s visit in November, as it steps up its neighbourhood outreach. The talks will cover water-sharing issues and investments. Even with constraints on its own energy security during the West Asia conflict, India has continued to ensure supplies to its neighbours, including Nepal and Bangladesh.

 

Wagle was in New Delhi last week for his first visit abroad after taking over as Nepal’s finance minister. He acknowledged India’s assistance following the recent flash floods in Nepal, and also its support for the Himalayan nation’s energy security. He met his Indian counterpart Nirmala Sitharaman and External Affairs Minister S Jaishankar on Friday; and addressed think tanks, including the Research and Information System for Developing Societies (RIS), which works under the Ministry of External Affairs, and industry chambers on Saturday.

 

Wagle said Shah could visit India in November. The 36-year-old Nepalese PM had earlier announced that he will travel abroad only after his government completes a year — however, the flash floods have spurred Nepal’s new leadership to reach out to neighbours and international organisations. The Rabi Lamichhane-led Rastriya Swatantra Party, with Shah as its prime ministerial candidate, achieved a historic and unprecedented victory in the March elections on the back of GenZ support and its promise to deliver good governance and crack down on corruption.   

 

In New Delhi, Wagle flagged the damage that the August 26 flash floods have wrought. He said a 300-megawatt (Mw) operational hydroelectric plant was swept away, as well as an under-construction 500-plus Mw plant — a cumulative hit of 800 Mw, or nearly 20 per cent of Nepal’s 4,200 Mw installed hydroelectric capacity. Kathmandu has sought India’s assistance and investments in achieving its target of 28,000-35,000 Mw of clean energy, mostly hydropower, by 2035.

 

Wagle said that the floods affected significant foreign investments in hydroelectric projects, especially South Korean investment. He thanked India for its pledge to ensure 650 Mw of electricity supply to Nepal in the aftermath of the floods.

 

The Nepal government has estimated that it would need $5 billion to recover from the damage. The losses include 31 bridges, 70 km of walkway roads, around 8,000 buildings, and thousands displaced. 

 

Additionally, Wagle said at the RIS interaction that Nepal is keen that existing projects between itself and India, some of which were conceived decades back, could now be finished with a new government in Kathmandu that does not carry the baggage of preceding governments, particularly those helped by the communists that painted India as a ‘Big Brother’ figure. 

 

In the coming weeks, Wagle is scheduled to attend international engagements where Nepal will highlight its vulnerability to climate change and seek greater support for climate-vulnerable countries. He is scheduled to be in Doha this month to attend the annual meeting of the Beijing-based Asian Infrastructure Investment Bank’s (AIIB’s) Board of Governors, and is slated to participate in the annual meetings of the International Monetary Fund and World Bank Group in Bangkok next month.

 

At the AIIB meeting and other international engagements, Wagle will speak about the scale of the August 26 flash floods along the Bhotekoshi-Trishuli river system and the growing costs of climate-related disasters for Nepal. The floods have killed at least 1,403 people and left 6,150 missing. The Nepalese government has made climate-related disasters a growing focus of its international diplomacy. Its foreign minister Shisir Khanal will focus on the issue at the 81st session of the United Nations General Assembly and in other bilateral and multilateral engagements in New York later this month.

 

“We felt it in Nepal, but the cause and the consequences are truly global and regional. I think this needs to be appreciated much more. I think that’s one purpose of these international visits that I will be undertaking,” Wagle told journalists on Saturday in New Delhi. He added: “Nepal’s global greenhouse gas emissions are very little, but the consequences are being felt by the poor people of the country.” 

 

India and Nepal signed a joint vision document on power sector cooperation in 2022 for the development of power projects, cross-border transmission lines, bi-directional power trade, and coordinated operation of national grids. The power trade agreement signed in 2014 envisaged export of 10,000 Mw of power by Nepal to India. Nepal exported about 1,100 Mw of electricity to India in 2025 and also sent power to Bangladesh through the Indian grid. India’s SJVN is developing the Arun-III project which will be the largest power project in Nepal once operationalised (900 Mw), and Lower Arun, which will have a capacity of about 670 Mw.

 

The first regional cross-border petroleum pipeline was inaugurated between Raxaul and Amlekhgunj in 2019. It was funded and constructed by the Indian Oil Corporation. An agreement for a new pipeline between Siliguri and Jhapa and for building two greenfield terminals in Chitwan and Jhapa was signed in 2023.

 

India is Nepal’s largest partner in terms of trade and investment. Their bilateral goods trade was worth about $9.38 billion in 2025-26 (FY26), which was more than 60 per cent of Nepal’s total external goods trade. India is also Nepal’s biggest export destination and received more than 80 per cent of Nepal’s goods exports in FY26.  

 

In services, the bilateral trade  comprises about a third of Nepal’s total external trade in services. In connectivity, there are two operational cross-border railway lines (Jaynagar-Bijalpura and Jogbani-Nepal Customs Yard), three operational Integrated Check Posts (ICPs) at Birgunj, Biratnagar; and Nepalgunj, and the Motihari Amlekhgunj Petroleum Pipeline.