Nepal faces uncertainty after US freezes $500 million grant amid China opposition

February 26, 2025 | Foreign Affairs: House Committee, Standing Committees - House & Senate, Congressional Hearings Compilation


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Nepal faces uncertainty after US freezes $500 million grant amid China opposition
In a recent session of the U.S. House Committee on Foreign Affairs, the spotlight turned to Nepal's bold decision to partner with the United States, a move that has sparked both hope and concern among its leaders. The meeting, held on February 26, 2025, highlighted the significant $500 million grant Nepal accepted from the Millennium Challenge Corporation in 2022, aimed at enhancing its electricity grid and improving road infrastructure.

Mr. Fontaine, a key witness at the hearing, recounted the fierce opposition from China and its supporters within Nepal, who argued against this collaboration. They warned that aligning with the U.S. could jeopardize Nepal's interests. However, the Nepali government chose to proceed, a politically challenging decision that many now reflect upon with uncertainty.

The abrupt freezing of U.S. assistance by the Trump administration has left Nepalese officials questioning the wisdom of their choice. As they navigate the complexities of international relations, the sentiment among Nepal's leaders appears mixed. While they initially felt empowered to stand against Chinese influence, the lack of transparency surrounding U.S. support has sown seeds of doubt about their partnership.

This meeting not only underscored the delicate balance Nepal must maintain between global powers but also raised critical questions about the future of U.S.-Nepal relations. As the committee deliberated, it became clear that the implications of these decisions extend far beyond immediate financial aid, shaping the geopolitical landscape of the region for years to come.

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