Nepal’s youth-led anti-corruption uprising has not only upended domestic politics but also forced India and China to recalibrate their strategic, economic, and diplomatic engagement with a volatile Himalayan neighbour
In September 2025, Nepal witnessed one of the deadliest political uprisings in its modern political history—a youth-led anti-corruption movement without any party banners or ideological manifestos that toppled the government in power, reshaped political discourse, and sent shockwaves across South Asia’s geopolitical landscape. The movement, which began as online frustration against corruption and nepotism, escalated into a full-scale revolution that claimed at least 76 lives in just two days and fundamentally altered Nepal’s political trajectory.
The origin of the uprising can be traced to months of discontent simmering among Nepal’s predominantly young population — where the median age is 25. A viral social media campaign against corruption was launched using the hashtag “#NepoBaby”, which highlighted the lavish lifestyles of politicians’ children and other influential figures at a time when the average annual income of citizens is US$1,400. As this movement gained ground and galvanised anger among the public, the government, led by Prime Minister K.P. Sharma Oli, banned 26 social media platforms on 4 September 2025 — including Facebook, YouTube, WhatsApp, and Instagram — through which the campaign was being carried out. This was the immediate catalyst behind the uprising. On 8 September, Nepal’s youth-driven protest turned violent, leading to deadly clashes as police used force, including live ammunition, killing at least 19 protestors. By the next day, attacks on police stations and government buildings intensified, and around 14,000 inmates were freed amid widespread arson. Prime Minister Oli resigned, and the army was deployed. In the ensuing vacuum, over 10,000 users on a “Youth Against Corruption” forum chose Sushila Karki to succeed Oli. President Ram Chandra Poudel appointed her as Nepal’s first female Prime Minister, with elections set for 5 March 2026.
Understanding responses to Nepal’s Gen Z uprising is essential for assessing how India and China—the two major Asian stakeholders in Nepal—interpret and react to youth-led political volatility in a strategically sensitive region.
In this context, understanding responses to Nepal’s Gen Z uprising is essential for assessing how India and China—the two major Asian stakeholders in Nepal—interpret and react to youth-led political volatility in a strategically sensitive region. It also helps reveal how the unrest reshaped diplomatic priorities, humanitarian concerns, and geopolitical calculations toward Nepal.
To assess how Asia’s two major players responded to Nepal’s uprising, it is essential to examine Nepal’s trade relationships with India and China. Nepal maintains a highly asymmetric trade profile. According to trade statistics from the Department of Customs, Nepal enjoyed a trade surplus with only 37 countries of its 164 trade partners in the fiscal year 2024–25, reflecting its import-dependent consumption pattern. The country recorded heavy trade deficits with its major trading partners, amounting to INR1,527.09 billion in the last fiscal year. Among its neighbours, Nepal recorded the highest trade deficits with India and China, amounting to NPR144.67 billion and NPR51.80 billion, respectively.
India dominates Nepal’s external trade by an overwhelming margin, both as a destination for exports and a source of imports. According to data recorded in September 2025, India remains Nepal’s largest export destination—with 71.9 percent of its total exports going to India, amounting to US$136 million. However, the trade balance remains negative, with Nepal’s imports from India amounting to US$516 million. China ranks as Nepal’s second-largest trading partner, and the relationship remains heavily skewed towards imports, much like the case with India. Goods worth US$185 million were imported, while goods worth only US$4.05 million were exported to China, resulting in a trade deficit of US$181 million.
India’s response to the uprising reflected both immediate alarm and strategic calculation. As Nepal’s largest trading partner and closest geographical neighbour, India faced considerable economic consequences arising from the political turmoil. India’s Ministry of External Affairs issued a careful statement noting that it was closely monitoring the developments in Nepal. The statement expressed grief over casualties and extended condolences to the bereaved, and advised Indian citizens in Nepal to follow guidelines issued by the local authorities. Indian officials, however, avoided making any direct comment on Nepal’s internal political developments. Subsequently, in a statement dated 21 September, the ministry expressed concern over the violence that ensued after the promulgation of the constitution. It noted that complaints were voiced by freight companies and transporters over difficulties in movement within Nepal, alongside security concerns.
The impact of the unrest on India-Nepal trade relations was evident. In September 2025, India’s exports to Nepal declined 16.6 percent as political turmoil disrupted road transport, the primary channel for trade between the two nations. The sectors that were most affected included commodities that Nepal’s heavily import-dependent economy relies on for daily functioning, including petroleum products, steel, pharmaceuticals, and machinery.
The impact of the unrest on India-Nepal trade relations was evident. In September 2025, India’s exports to Nepal declined 16.6 percent as political turmoil disrupted road transport, the primary channel for trade between the two nations. The sectors that were most affected included commodities that Nepal’s heavily import-dependent economy relies on for daily functioning, including petroleum products, steel, pharmaceuticals, and machinery. Border towns between India and Nepal witnessed long queues of stranded trucks, while traders reported significant losses due to disrupted commerce.
After the unrest, Nepal’s cross-border trade with China experienced severe supply disruptions as trade through the Rasuwagadhi and Tatopani borders was brought to a halt, leaving containers stranded at the border points. Tourism from China, an increasingly important source of revenue for Nepal, has also dropped significantly due to safety concerns. Nearly half of Chinese visitors cancelled their September bookings, a setback expected to continue in the coming months.
Beijing’s response to Nepal’s political turmoil has been notably cautious. On 10 September, the Chinese Ministry of Foreign Affairs issued a brief statement emphasising China–Nepal friendship while avoiding mention of specific events or casualties. Analysts interpret this as a calculated display of Chinese diplomatic restraint, reflecting concerns that the uprising could undermine Beijing’s long-term Himalayan strategy. The Oli government had played a pivotal role in advancing China’s Belt and Road Initiative (BRI) in Nepal, particularly under the Memorandum of Understanding (MoU) on enhancing connectivity across ports, railways, roads, aviation, and communications. These projects are central to Nepal’s aspirations of graduating from the status of a least developed country (LDC) to achieving middle-income standing by 2030 and advancing its commitments under the Sustainable Development Goals (SDGs). Oli’s removal leaves the future of major BRI ventures, including the Grand Trans-Himalayan Railway, hanging in the balance.
On 10 September, the Chinese Ministry of Foreign Affairs issued a brief statement emphasising China–Nepal friendship while avoiding mention of specific events or casualties. Analysts interpret this as a calculated display of Chinese diplomatic restraint, reflecting concerns that the uprising could undermine Beijing’s long-term Himalayan strategy.
Another critical factor in China’s cautious posture is the Tibet question. Nepal’s adherence to the “One China” policy has been central for Beijing, given the presence of around 15,000 Tibetan refugees and the country’s proximity to Tibet. With the fall of the pro-China Oli administration, Beijing is concerned that external powers—particularly the United States—may attempt to expand influence in Nepal, and that a new generation of politically assertive Nepalis may be less willing to suppress Tibetan activism, potentially amplifying anti-China sentiment within the country.
Nepal’s Gen Z–driven uprising has reshaped its domestic politics while exposing the fragility of its regional ties. The unrest highlighted Nepal’s deep economic reliance on both India and China, and led to cautious responses from each as vital trade routes and strategic projects came under strain. India’s reaction was shaped by immediate security and connectivity concerns, whereas China’s measured diplomacy reflected concerns about stalled Belt and Road investments and shifting political currents in Kathmandu.
Former PM Oli was long perceived as pro-China due to his support for BRI initiatives, while his relations with India remained uneasy. In contrast, interim Prime Minister Sushila Karki is viewed as politically neutral: reassuring for India, and cautiously acceptable to China. Her reaffirmation of the “One China” policy helped ease Beijing’s security anxieties, though major infrastructure progress remains stagnant.
India has also stepped up engagement, amending the Treaty of Transit in November 2025 to expand rail-based freight movement and enhance multimodal connectivity, covering Nepal’s trade with third countries. The treaty also emphasises energy cooperation and digital finance. As Nepal enters a new era of youth-led governance, its ability to balance dynamics with India and China will shape both its stability and South Asia’s evolving geopolitical landscape.
Anasua Basu Ray Chaudhury is a Senior Fellow with Neighbourhood Initiative at the Observer Research Foundation.
Subhangi Mukherjee is an Intern at ORF Kolkata.
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Anasua Basu Ray Chaudhury is Senior Fellow with ORF’s Neighbourhood Initiative. She is the Editor, ORF Bangla. She specialises in regional and sub-regional cooperation in ...
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Subhangi Mukherjee is an Intern at the Observer Research Foundation. ...
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