There is a threshold in bilateral relationships between unequal states at which cooperation becomes structural dependency. The threshold is not marked with a sign. It passes gradually, through accumulated agreements, growing financial obligations, and deepening institutional ties that make any recalibration increasingly costly. Nepal is approaching that threshold in its relationship with China. It has not yet crossed it. The question is whether Kathmandu’s political institutions have the capacity to recognise the threshold before it is behind them.
Nepal’s defence cooperation with China has grown substantially over the past decade through joint military exercises, officer training programmes, and equipment transfers. Bilateral military cooperation began in 1988, but acquired new momentum after 2017, when the two countries held their first-ever joint military drill—the Sagarmatha Friendship exercise—marking a significant turning point. In October 2018, Deputy Prime Minister Ishwar Pokhrel travelled to Beijing, where he and Chinese Defence Minister Wei Fenghe signed a memorandum of understanding expanding military assistance and training ties.
The following year, President Xi Jinping’s state visit to Kathmandu elevated the relationship to a “strategic partnership of cooperation.” India, which along with the United States and the United Kingdom had historically been one of Nepal’s primary external defence partners, raised its concerns through diplomatic channels. The response from Kathmandu was reassurance: Nepal would remain non-aligned, equidistant, and independent.
The reassurance is sincere. The structural trend runs in a different direction—though it is not without countercurrents. Defence cooperation creates institutional linkages that are difficult to walk back. Training programmes align doctrines. Equipment transfers create maintenance dependencies. Joint exercises build habits of cooperation that, over years, become assumptions. Nepal’s army is not becoming Chinese in any meaningful sense. It is becoming, in specific technical domains, more oriented toward Chinese systems and Chinese operational practices.
Yet this process has limits: Nepal’s joint exercises with China have been suspended since 2019, and in 2022 Nepal procured ammunition from an Indian supplier after Chinese manufacturers failed to compete on quality in an open bidding process. These are signs of continued agency, not merely of drift.
The diplomatic consequence of the broader trend is nonetheless visible. India’s discomfort with the direction of Nepal-China defence ties has affected the warmth of bilateral conversations at senior levels. Nepal’s ability to use its relationship with India as a counterweight to Chinese pressure depends on that relationship remaining functional and warm. As defence and economic engagement with China deepens, maintaining that warmth with India requires active diplomatic investment that coalition governments in Kathmandu have not always been able to sustain.
Nepal’s foreign ministry has competent professionals who understand these dynamics clearly. The problem is structural rather than personal. Coalition politics in Nepal produces governments with short horizons and multiple veto players. Long-term strategic planning of the kind required to manage great power competition around a small state requires institutional continuity that Nepal’s political system has struggled to provide.
The dependency that threatens Nepal’s foreign policy autonomy is not primarily financial, though that pressure is real, most visibly in the ongoing negotiations over Belt and Road Initiative projects, where Kathmandu has pushed back firmly against commercial loan terms it considers unsustainable.
The more subtle danger is the dependency created by layered agreements, each of which makes sense in isolation, whose cumulative effect is to leave Nepal with fewer and fewer credible options if it ever needs to say no to Beijing.