The last quarter of a century has been a period of continuing political transition for Nepal. It began with the introduction of constitutional monarchy and multiparty democracy in 1990, and following a decade-long Maoist insurgency, has led to the promulgation of a new Constitution which, unfortunately, failed to win the acceptance of all sections of society. Meanwhile, the 250-year-old monarchy stands abolished, with Nepal declaring itself a republic. The year 2015 was a particularly difficult one for the country, with the earthquake in April and then a five-month-long trade disruption provoked by the protests in the Terai against the new Constitution. Meanwhile, relations with India deteriorated. Nepal’s dysfunctional politics came into play and once again, Nepal tried to use its ‘China card’. But the reality is that the India-China relationship is much broader in scope. Nepal’s political leadership needs a change of mindset in order to profit from the country’s strategic location between the two fastest growing economies of Asia.