A 25-member US Congressional delegation will arrive in the Nepalese capital of Kathmandu today.
Today’s visit focuses on economic development, trade and investment, and comes after Nepal’s decision to approve a $500 million grant from the US Millennium Challenge Corporation (MCC) agency. The grant is designed to modernize Nepal’s electricity and logistical infrastructure and promote economic integration with India.
Along with approval of MCC’s grant, a confluence of developments—including a recent $659 million USAID grant, Kathmandu’s rejection of new Belt and Road Initiative agreements due to concerns over Chinese loan agreements and a breakdown of unity in Nepal’s Communist Party—have pushed Nepal to take on an Indo-Pacific tilt. As a result, Nepal-India ties have begun to normalize and work towards the US’ broader Indo-Pacific strategy, which aims to empower India’s regional standing. Trade and investment encompass a portion of this strategy and will feature in today’s meeting.
As US foreign direct investment has declined recently, expect US delegates to encourage Nepalese officials to adopt laws that American investors deem necessary, specifically a compensation law. US delegates will also push for revitalizing the US-Nepal Trade and Investment Framework Agreement due to little progress since the last meeting in December 2020, before the pandemic disrupted various sector stakeholders.
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Alan is an analyst with the Current Developments team, focusing on security and politics, particularly within the former Soviet Union, the Middle East and Africa. He contributes regularly to the Daily Brief.