Nepal PM Balen Shah says 'eager to work closely' with India

Nepal's New Prime Minister Signals Commitment to India Relations

Balendra Shah, who was recently sworn in as Nepal's Prime Minister following a decisive electoral victory by the Rastriya Swatantra Party in March 2026, has expressed his eagerness to strengthen ties with India. In a response to congratulatory messages from Indian Prime Minister Narendra Modi, Shah conveyed his commitment to advancing the multifaceted relations between the two neighboring countries. The warm diplomatic exchange between the two leaders marks an optimistic beginning for Indo-Nepal relations under the new government, with both sides emphasizing their dedication to working together for the common prosperity of their peoples.

A Fresh Start After Political Turbulence

Nepal has experienced significant political instability in recent years, with the country witnessing 14 prime ministers in just 18 years. The path to Shah's appointment was marked by considerable unrest in 2025, during which at least 77 people were killed in protests against corruption and political instability. Shah's emergence as prime minister represents a turning point, as voters decisively rejected the traditional political elite and embraced the political newcomer Rastriya Swatantra Party. The electoral victory ended Nepal's pattern of coalition politics that had plagued the nation's governance and development. The new government now faces the challenging task of addressing economic hardships, creating employment opportunities, and ensuring accountability regarding the previous administration's actions during the crisis period.

Diplomatic Warmth and Pragmatic Partnership

Prime Minister Modi extended warm congratulations to Shah, stating that his appointment reflects the trust of Nepal's people in his leadership. Modi expressed optimism about taking India-Nepal friendship and cooperation to greater heights for the mutual benefit of both nations. Shah, in turn, responded with appreciation for Modi's wishes and reiterated his commitment to deepening bilateral relations. , Shah conveyed in his message. This diplomatic engagement has been noted for its speed and warmth, with Modi holding telephone conversations with both Shah and Rastriya Swatantra Party Chairman Rabi Lamichhane to reinforce India's commitment to mutual prosperity.

I am eager to work closely with you to advance the multifaceted relations between our two countries for the common prosperity of our people

The warm diplomatic overtures represent a notable shift from Shah's tenure as Kathmandu mayor, when his approach to India-related matters had raised concerns in New Delhi. During his mayoral period, Shah had displayed maps depicting a "Greater Nepal" that included Indian territories and had threatened measures against Indian cultural products over specific controversies. However, since his electoral victory, Shah has adopted a more conciliatory tone, emphasizing the importance of deepening "historic" Nepal-India ties and making them more "outcome-oriented." Political analysts and business leaders suggest that while Shah's nationalism may be genuine, the geographical and economic realities binding the two nations enforce pragmatism in bilateral relations.

Opportunities for Cooperation and Development

The India-Nepal relationship extends far beyond formal diplomacy, rooted in deep cultural, social, and economic connections. Nepal relies heavily on India for the transportation of goods and services, and the two nations share extensive trade flows, labor migration patterns, and familial links that transcend formal diplomatic frameworks. Shah, who hails from the Madhesi community of southern Nepal and speaks Maithili, carries strong cultural and linguistic connections with neighboring Indian states, particularly Bihar, reflecting the unique cross-border kinship between the populations.

Looking forward, there are numerous avenues for enhanced cooperation. Nepal seeks to capitalize on its hydropower potential and has already concluded a long-term power trade agreement with India in 2024. The new government, having pledged economic development through energy expansion, particularly hydropower, views this agreement as an opportunity to harness significant economic gains. Nepal is also seeking Indian investment in major hydroelectric projects, including the 900 megawatt Arun-3 Hydroelectric Project. Beyond energy cooperation, experts anticipate that the new government will sustain broader developmental partnerships with India, fostering collaboration in infrastructure development, connectivity, tourism growth, and emerging sectors like startup ecosystems and innovation partnerships.

The nascent government's focus on economic development and practical governance aligns with India's strategic interests in the region. Business leaders have noted that Shah and the next tier of Rastriya Swatantra Party leadership understand that a "Nepal First" policy still requires close and constructive ties with India. As both nations move forward, the challenge lies in translating diplomatic warmth into concrete developmental outcomes that benefit ordinary citizens of both countries while respecting Nepal's sovereignty and aspirations.