A first-timer in his 30s with the right vision and intention, if given a chance, can perhaps deliver more for citizens. Nepal’s youngest-ever Prime Minister, Balen Shah, has shown signs of right intention to deliver for the constituency that feels connected with him through his music.

Shah’s music has created hope for the youth who have limited economic opportunities at home.

For the uninitiated, the newly elected leader is a popular rapper.

He has brought hope to about 30 million people who have borne the brunt of corruption and nepotism.

Power Potential

It took decades for the country’s leaders to realise that Nepal could be the next Bhutan based on its hydel power potential. It was only a few years ago that Kathmandu decided to export energy to India and subsequently turned an exporter of electricity to Bangladesh as well, via the Indian grid.

The new Nepalese government now has the opportunity to fix the fractured economy of the country, elevate the cross-border energy partnership with India to the next level by harnessing the full hydel power potential. Nepal’s revenue generation by selling cross-border electricity can multiply manifold if Kathmandu exploits its full potential.  

Indeed, the power sector will be key for India-Nepal bilateral relations. The Joint Vision Statement of 2022 laid out a comprehensive roadmap for bilateral cooperation in the power sector. Its key pillars include joint development of power generation projects in Nepal, development of cross-border transmission infrastructure, bi-directional power trade, coordinated operation of the national grids and institutional cooperation in sharing the latest operational information technology and know-how.

Major landmarks in the cross-border power sector include the finalisation of the Long-Term Power Trade Agreement; finalisation of the trilateral power trade agreement between India, Nepal, and Bangladesh; and signing of agreements with respect to the development of new Hydropower Projects in Nepal by Indian developers, including the 480 MW Phukot Karnali and the 669 MW Lower Arun.

In 2021, Nepal became the first country to benefit from India’s revised guidelines (2018) on cross-border power trade in electricity when Nepal Electricity Authority entered into an arrangement with NTPC Vidyut Vyapar Nigam Ltd to buy power in real time from the Indian Energy Exchange.

Global Integration 

While Nepal is keen to get itself integrated into the global economy to boost the average income of its citizens, the closest and viable road to integration lies through India, with which it has an open border policy. And while the new government wants to pursue the Nepal First policy, strengthening and expanding cross-border projects with India is a win-win proposition and will not infringe upon the sovereignty of the Himalayan State.  

India and Nepal have been strengthening cross-border connectivity through rail, road, energy, and infrastructure projects. Key initiatives include the strategic 136-km Raxaul–Kathmandu railway, operationalised Integrated Check Posts (ICPs) like Birgunj-Raxaul, and cross-border petroleum pipelines. These projects enhance trade, energy security, and regional integration.

Some of the landmark connectivity initiatives include the Integrated Check Posts at Nepalgunj, Bhairahawa and Dodhra-Chandni; inauguration of a freight train service between India and Nepal, progress on the Kurtha – Bijalpura and Raxual-Kathmandu railway line; Motihari - Amelekhgunj pipeline phase II and construction of a new petroleum pipeline from Siliguri to Jhapa and Amelekhgunj to Chitwan.

An existing cross-border pipeline inaugurated in 2019 carries petroleum products from Motihari in India to Amlekhgunj in Nepal. This is South Asia’s first cross-border petroleum products pipeline. It is 69 km long, has a capacity of 2 million metric tons per annum,  and provides cleaner petroleum products at an affordable cost to the people of Nepal. This pipeline has ensured that Nepal continues to receive energy despite the crisis in West Asia.

Deepening Ties

One area that holds huge promise is cross-border digital connectivity, given the depth of people-to-people ties. Nepal started accepting UPI payments in March 2024 through interoperability with FonePay QR of Nepal. An MOU between NPCIL (National Payments Corporation of India Limited) and Nepal Clearing House Limited (NCHL) for facilitating cross-border digital payments is under implementation. Collaboration in the Digital Public Infrastructure sector has a big scope for expansion, given India’s expertise and the aspirational young population of Nepal.  

The achievements so far in India-Nepal cross-border connectivity projects are just the tip of the iceberg. Whether it is cross-border electricity, highway, railway or oil pipeline, there is an immense opportunity to increase the projects that would contribute to Nepal’s economy, provide relief to its population and increase per capita income. PM Shah is standing on the cusp of history to take the India-Nepal partnership rooted in history to the next level in future and make Nepal a success story.       

As the young leader takes charge of Nepal, all eyes are on his melody to create conditions for the economy to graduate to the next level. Will he manage to live up to the expectations? 

(The writer is a commentator on geopolitics. Views expressed are personal.)