The study is a comparative analysis of the presence of China and India in Nepal across the economic, political, social and strategic fronts. I administered elite interview as a primary data collection technique which included Nepali diplomats, academicians, and recognized journalists who have been working in or have prior interests on Chinese and Indian affairs in Nepal. Additionally, I applied secondary textual data gathered from various relevant literatures to supplement my interview data. Due to the propensity of ever-changing discourses, narratives, and phenomena in the domain of my study, I have periodically reviewed the latest cutting-edge news and events in the process of progressing this study.

I have focused on the development, operationalization and controversies of Chinese and Indian aid, infrastructure and soft power diplomacy in Nepal. I have explored and analysed how Nepali elites view the competing interests of China and India in Nepal. However, during the course of my study, I realised that this research will be unfulfilled without mentioning the influence of western actors in Nepal. Therefore, certain elements of western influence in Nepal are bound to come while discussing the presence of China and India in Nepal. It is because both China and India are also concerned about Nepal’s acquired power via western actors that might spill over across the border impacting their national interest. It is interesting to see the great power convergence in Nepal and Nepal’s own strategies and tactics in balancing these actors for its own survival. Essentially, to understand Chinese and Indian presence in Nepal, I lay out following interrelated research questions:

1. How are China and India displaying their presence in Nepal?

2. What are China and India attempting to achieve in Nepal?

3. How ought Nepal government engage with China and India?

I have argued that China and India have a competing interest over Nepal, both trying to influence the political, economic and institutional resources. As compared to China, India has a lesser need of soft power diplomacy in Nepal mainly due to the existing cultural and linguistic affinity, political brackets and an unparalleled open border regime between them. However, with China’s inevitable rise as an emerging global power, it is clearly presenting itself as a more active neighbour of Nepal if not an interventionist, contesting with India’s traditional influence in Nepal. Nepal adopts an approach known as strategic hedging to protect itself from strategic and economic vulnerabilities when dealing with major powers, particularly China and India, through a stance that is either limited or ambiguous in alignment. This study further shows how the geo-strategic location of Nepal is significant in South Asia both for regional and extra-regional actor(s) and how Nepal attempts to leverage its location maintaining the neutrality and non-engagement in power bloc politics.