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PM Modi speaks to Nepal leaders Rabi Lamichhane, Balendra Shah

March 09, 2026 4 min read International Relations GS Paper 2 (International Relations)
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What Happened

  • Prime Minister Narendra Modi, on March 9, 2026, held telephonic conversations with Rastriya Swatantra Party (RSP) Chairman Rabi Lamichhane and senior RSP leader Balendra Shah (Balen Shah), congratulating them on their party's landmark victory in Nepal's general elections held on March 5, 2026.
  • Modi expressed confidence that joint endeavours would take India-Nepal relations to new heights, reaffirming India's commitment to working with the new leadership for mutual prosperity and progress.
  • The RSP won a sweeping majority in Nepal's 275-member House of Representatives, securing 182 seats — the first single-party majority in Nepal since 1999.
  • Balendra Shah (age 35), a structural engineer and former rapper, was sworn in as Nepal's youngest Prime Minister on March 27, 2026, defeating former PM KP Sharma Oli in the Jhapa-5 constituency by a margin of over 49,000 votes.
  • The election was precipitated by Gen Z-led anti-corruption protests in 2025 that toppled the previous coalition government, with 76 people killed during the protests.

Static Topic Bridges

India-Nepal Bilateral Relations: Structure and Significance

India and Nepal share a unique relationship underpinned by an open border, deep civilisational and cultural ties, and the 1950 Treaty of Peace and Friendship, which provides Nepali citizens near-equal treatment in India. Nepal is landlocked and critically dependent on India for trade, transit, and supply of essential goods, including petroleum products. The two countries are also linked by the Kosi, Gandak, and Mahakali river treaties.

  • India is Nepal's largest trade partner, accounting for over 65% of Nepal's total trade.
  • The 1950 Treaty of Peace and Friendship allows free movement of people and goods across the open border.
  • India and Nepal are connected by major hydropower projects: Pancheshwar Multipurpose Project (6,720 MW potential), Upper Karnali, and Arun-III.
  • Nepal is a member of SAARC and BIMSTEC; India-Nepal connectivity is a priority under India's Neighbourhood First Policy.
  • Nepal's constitution (2015) declared it a federal democratic republic with a 275-seat House of Representatives (lower house) and a 59-seat National Assembly (upper house).

Connection to this news: Modi's proactive outreach to the RSP leadership immediately after election results signals India's intent to build ties with the new generation of Nepali leadership and maintain strategic depth in its most sensitive neighbourhood.

Electoral Politics in Nepal: From Instability to RSP's Historic Majority

Nepal has been characterised by extreme political fragmentation since the abolition of monarchy in 2008 and adoption of the 2015 constitution. No single party has won a majority in the House of Representatives since the Nepali Congress in 1999. Frequent coalition collapses — Nepal had over 13 prime ministers between 2008 and 2025 — have hampered governance and development.

  • Nepal's 275-seat House of Representatives uses a mixed system: 165 seats via First Past the Post (FPTP) and 110 via Proportional Representation (PR).
  • RSP won 125 FPTP seats and 57 PR seats, totalling 182 — a near two-thirds majority.
  • The RSP was founded in 2022 by Rabi Lamichhane and contested its first election in November 2022, winning 20 seats; the 2026 win represents an extraordinary surge.
  • The election was triggered by 2025 Gen Z-led protests against corruption; 76 protesters were killed.
  • Balendra Shah (Balen) — 35, structural engineer, hip-hop artist — is Nepal's youngest and first Madhesi-origin Prime Minister.

Connection to this news: Modi's call signals recognition of a generational shift in Nepali politics and India's desire to engage with a stable, majority-backed government — a rarity in Nepal — to advance bilateral projects, especially hydropower cooperation.

Hydropower Diplomacy: India-Nepal's Strategic Opportunity

Nepal holds an estimated 83,000 MW of technically feasible hydropower potential, making it one of the world's richest in this resource. India-Nepal hydropower cooperation has historically progressed slowly due to political instability in Kathmandu and bilateral differences. A stable RSP government with a strong majority could accelerate key projects.

  • Pancheshwar Multipurpose Project: 6,720 MW potential; governed by the 1996 Mahakali Treaty; remains unimplemented due to political delays.
  • Upper Karnali (900 MW) and Arun-III (900 MW) are under development with Indian private sector involvement.
  • India is already importing 452 MW of power from Nepal; cross-border power trade is governed by the 2014 Power Trade Agreement.
  • Nepal's new government is expected to prioritise foreign investment in hydropower as a key revenue source.

Connection to this news: PM Modi's early engagement with the RSP leadership is aimed at building the diplomatic foundation for accelerating stalled hydropower agreements and positioning India as Nepal's preferred development partner.

Key Facts & Data

  • RSP founded: 2022 by Rabi Lamichhane; 2022 election result: 20 seats; 2026 result: 182 seats (out of 275).
  • Nepal House of Representatives: 275 seats (165 FPTP + 110 PR).
  • Balendra Shah: 35 years old, sworn in March 27, 2026, Nepal's youngest PM, first Madhesi-origin PM.
  • Last single-party majority in Nepal: Nepali Congress in 1999.
  • India-Nepal bilateral trade: India accounts for over 65% of Nepal's total trade.
  • Nepal hydropower potential: 83,000 MW technically feasible; 6,720 MW Pancheshwar project under the 1996 Mahakali Treaty.
  • Gen Z protests 2025: 76 killed; led to dissolution of previous coalition government.