Nepal's New Youth-Led Government Outlines Liberal Economic Agenda and Regional Strategy

Speaking at the Asia Society in New York on the sidelines of the UN General Assembly, Foreign Minister Shisir Khanal described the rapid rise of Nepal’s Rastriya Swatantra Party, a party founded in 2022 that moved from fourth-largest parliamentary force to near a two-thirds majority after a March election. He linked the party’s ascent to a Gen Z movement fueled by corruption, stagnant growth and massive youth out-migration.

Khanal said the new government will combine socially progressive policies with economically liberal reforms, seeking market liberalisation, reduced bureaucracy and greater foreign investment, especially in hydropower. He outlined a “development autonomy” foreign policy that treats Nepal’s position between India and China as an economic advantage, aiming to expand trade, infrastructure and connectivity while preserving autonomy.

Relations with India remain “excellent,” while ties with China will focus on transparent, value-for-money projects, and the United States is targeted for increased investment. Ultimately, Khanal hopes Nepal will become a vibrant, middle-income nation that offers its citizens viable opportunities at home.