India eyes reset in Nepal ties under Balen Shah's stable government

With Balen Shah's Rashtriya Swatantra Party heading for a landslide in Nepal's polls, New Delhi hopes a stable majority government will reset strained ties after the K P Sharma Oli era

With the Rashtriya Swatantra Party (RSP) led by the musician-turned-politician Balendra Shah ‘Balen’,  on course to secure a landslide victory in Nepal’s general elections, New Delhi is looking forward to fostering improved ties with a stable full-majority government rather than one comprising disparate coalition partners. Nepal has seen 14 governments in the past 18 years. 

South Block is also hopeful of overcoming the strain in relations during the Khadga Prasad Sharma Oli-led government of 2024-25, given its leadership’s penchant for turning to Beijing. Balen Shah is expected to be Nepal’s next prime minister and would be the first Madhesi PM of the landlocked country, which has deep social, cultural, and economic ties with India. Nepal shares borders with five Indian states. India accounts for 64.1 per cent of Nepal’s total trade, amounting to about $8.85 billion in FY23, followed by China (13 per cent). India is also Nepal’s largest export destination, receiving 67.9 per cent of its total exports. 

Sources said the Indian government also deeply appreciates the role played by Sushila Karki, the former chief justice and interim prime minister of Nepal, in ordering the conduct of elections and paving the way for the formation of a new government within months of the September 2025 protests. In contrast, in Bangladesh, following youth protests in August 2024, the interim government headed by Mohammad Yunus delayed elections, and minorities were attacked in the country during its tenure. India-Bangladesh relations returned to an even keel after the new government led by the Bangladesh Nationalist Party (BNP) was sworn in, sources pointed out. 

Formed in 2022, the RSP has won 120 of the 165 directly elected seats and was leading in another six in the House of Representatives elections, according to Nepal’s Election Commission. The EC had announced results for 156 of the 165 seats as of 5:30 pm. 

RSP’s 35-year-old Balen Shah defeated four-time prime minister K P Sharma Oli, the chair of one of Nepal’s largest parties, the Communist Party of Nepal (Unified Marxist-Leninist) or CPN-UML, by a massive margin of about 50,000 votes in the Jhapa-5

constituency. 

In the results announced so far, the Nepali Congress (NC) is a distant second with 17 seats, while Oli’s CPN-UML has won a mere seven seats and is leading in three. The Nepal Communist Party (NCP) has won seven seats. Of the 275 members of Parliament, 165 are elected through direct voting, while the remaining 110 are elected through proportional representation. 

Prime Minister Narendra Modi congratulated the people and government of Nepal on Saturday for the successful conduct of the election. He said that, as a close friend and neighbour, India remains steadfast in its commitment to working closely with the people of Nepal and its new government to scale new heights of shared peace, progress, and prosperity. 

The Ministry of External Affairs said: “India has consistently supported peace, progress, and stability in Nepal and, in keeping with our commitment, provided logistical supplies as per the request from the Government of Nepal for these elections. We look forward to working with the new government of Nepal to further build on the robust, multifaceted ties between our two countries and peoples for mutual benefit.” 

Gen Z protesters, through two days of intensified demonstrations on September 8 and 9 last year, had ousted Prime Minister Oli, who was heading a coalition government backed by the Nepali Congress that enjoyed nearly two-thirds majority support.