This paper explores the politicization of ethnicity in Nepal since 1990. In particular it looks at how ideas of indigeneity have become increasingly powerful, leading to Nepal becoming the first and to date only Asian country to have signed ILO 169. The rise of ethnic politics, and in particular the rise of a new kind of ethnicity on the part of the ‘dominant’ groups, Bahuns (Brahmans) and Chhetris (Kshatriyas), is the key to understanding why the first Constituent Assembly in Nepal ran out of time and collapsed at the end of May 2012, despite four years and four extensions of time, following historic and unprecedentedly inclusive elections in April 2008 and a successful peace process that put an end to civil war.