Nepal and its position in the rivalry between China and India: potential ways forward

Abstract

Nepal, a small nation-state, is strategically located between two powerful rising powers— China and India—in a geopolitical context akin to a ‘yam between two boulders.’ Notwithstanding its relatively modest dimensions and political-economic abilities, Nepal has effectively maintained its sovereign status in the face of the dynamic geopolitics of the region. On the contrary, neighbours, including Sikkim and Tibet, have encountered challenges maintaining their existence in the same geopolitical environment.

This research investigates Nepal's status as a small nation-state in the South Asian region, where two regional powers—China and India—emerge as prospective future superpowers, motivated by strategic considerations on their respective parts. Nepal's internal political instability and the external factors of China and India's strategic interests and concerns regarding dominance and influence contribute to their rivalry within the regional geopolitics, which includes Nepal. The rivalry is evident in economic and domestic spheres, encompassing aid/grants, trade, and investment. It has generated both beneficial and adverse results, including increased investments in infrastructure and interventions in domestic politics.

This study begins by surveying the foreign policy of three small states, namely Bangladesh, Sri Lanka and Bhutan, in the region to establish the options available to small states affected by great power rivalry. It then examines these policy alternatives in detail, including bandwagoning, balancing, non-alignment and neutrality, and hedging. This makes it clear that internal factors are key to understanding a small state's survival in a threatening external geopolitical environment. This thesis will, therefore, use a Realist framework to analyse Nepal's remarkable tale of survival and provide a salutary example for other small states to harness their own internal socio-political assets to protect their sovereignty in a region in transition. Finally, through this study, it can be concluded that maintaining a balanced way of relationships, especially a hedging strategy, with the region's rising powers can help to survive as the achievement of a significant goal for a small state like Nepal.

Date of Thesis submission	2025
Original language	English
Awarding Institution	Western Sydney University
Sponsors	Australian Government Research Training Program Scholarship
Supervisor	Simon Burrows (Supervisor), Brett Bowden (Supervisor), Diane Colman (Supervisor) & Drew Cottle (Supervisor)