Strategic Agency in the Himalayas: How Nepal Navigates India and China

Abstract

Situated precariously between the two largest and most rapidly ascending Asian powers India and China Nepal's foreign policy represents a compelling case study of small-state strategic agency in a highly contested geopolitical landscape. This paper examines how Nepal has historically and contemporarily navigated the "Himalayan Waters" of its immediate neighborhood, balancing profound economic dependence on India with an increasingly robust diplomatic and infrastructural engagement with China. Drawing upon a qualitative analysis of bilateral treaties, trade agreements, official diplomatic communiqués, and high-level political visits from 2015 to the present, the study interrogates the central paradox of Nepal’s foreign policy: the simultaneous pursuit of equidistance and equilibrium between two asymmetrically powerful neighbors. Methodologically, this study utilizes qualitative content analysis and process tracing within a single-case study design. Textual data is coded and analyzed using Computer-Assisted Qualitative Data Analysis Software (CAQDAS) to systematically isolate core themes of strategic hedging, infrastructure diplomacy, and structural constraints, while source triangulation ensures analytical validity. This study argues that while Nepal has formally embraced a non-aligned, "zone of peace" identity, its actual policy space is constrained by structural vulnerabilities, including transit dependency, remittance corridors, and shifting regional security alignments. However, far from a passive buffer state, Nepal demonstrates pragmatic agency through issue-based alignment, strategic hedging, and infrastructure diplomacy (e.g., the Belt and Road Initiative and cross-border railways) to diversify its dependencies and expand its foreign policy autonomy. The findings suggest that Nepal’s success in navigating these Himalayan waters will depend less on strict neutrality and more on its capacity to institutionalize cooperation, manage asymmetries through regional forums, and convert geostrategic competition into economic opportunity. This article contributes to the broader international relations literature on small-state survival strategies, hedging behavior, and the evolving geopolitics of South Asia.