Nepal’s Development Story: Indian-Funded Projects Thrive, While China’s BRI Initiatives Falter


Nepal’s Prime Minister, Pushpa Kamal Dahal ‘Prachanda’, addressed Nepal Parliament, revealing that during his recent meetings with Chinese leaders, discussions centred around various initiatives.

These included the construction of a transmission line in the northern border region, the establishment of solar power plants along the border, the development of several roads, and the expansion of collaboration in the health and agriculture sectors.

In contrast, it has come to light that several Chinese projects in Nepal remain on paper, a stark contrast to India’s extensive funding in the Himalayan nation.

India has provided approximately $63 billion in grant assistance to Nepal.

Prachanda’s recent visit to China resulted in assurances of funding for 12 projects. Nevertheless, there has been limited progress on China’s Belt and Road Initiative (BRI) projects in Nepal, despite Nepal signing the BRI agreement with China in 2017, as per Economic Times report.

Nepal has yet to realise the benefits of this agreement, even as some Nepalese leaders sought Chinese funding to reduce dependence on India.

Chinese leaders have raised concerns about the delays in BRI projects with Nepalese counterparts, but the reasons behind these delays remain unclear. Some of these projects were added to the BRI at the insistence of certain Nepalese leaders.

India-backed projects

In contrast, India-backed projects have made significant progress since 2018, even during the Covid-19 pandemic. These projects span various sectors, including border check-posts, healthcare services, road-rail links, and power projects.

India’s concessional line of credit to Nepal amounts to $1.65 billion for 22 projects. Additionally, the High Impact Community Development Projects program has been extended, providing up to Rs 3.125 crore per project in critical sectors like health, education, and community infrastructure development.

Some of the completed India-funded projects in Nepal include integrated check posts at Birgunj and Biratnagar, the Motihari-Amlekhgunj petroleum products pipeline, the Terai roads project, and the Jayanagar-Kurtha-Bijalpura-Bardibas rail link, with work on the third phase ongoing.

Other India-backed projects in Nepal encompass the Jogbani-Biratnagar rail link, the 900 MW Arun-III Hydro Electric Project, and post-earthquake reconstruction efforts in housing, education, and cultural heritage sectors.