Nepal and China have officially signed a significant framework agreement for the Belt and Road Initiative (BRI) on December 4, 2024. This agreement marks a pivotal step in advancing infrastructure projects that have been stalled since the initial BRI agreement was signed in 2017.

The agreement was finalized during Nepalese Prime Minister K P Sharma Oli's four-day visit to China, his first foreign trip since taking office again in July 2024. The signing involved discussions with high-ranking Chinese officials, including Premier Li Qiang and President Xi Jinping.

The BRI Cooperation Framework aims to enhance economic cooperation between Nepal and China, focusing on developing a Trans-Himalayan Multi-Dimensional Connectivity Network (THMDCN). This network is expected to improve connectivity across various sectors, including transportation, power grids, and telecommunications, thereby assisting Nepal in transitioning from a landlocked to a land-linked country.

A significant aspect of the negotiations revolved around financing terms. Initially, Nepal proposed "grant" financing; however, this was replaced with "aid assistance financing" after discussions with the Chinese side. This compromise reflects a shift towards a model that may involve loans rather than outright grants, raising concerns about potential debt liabilities for Nepal.

The signing of this framework indicates a shift in Nepal's diplomatic focus towards China, breaking from its historical ties with India. Prime Minister Oli emphasized the benefits of the BRI for Nepal’s development and encouraged Chinese investments in the country.

The new BRI framework is expected to pave the way for the implementation of various infrastructure projects that have been delayed due to political divisions within Nepal and concerns over debt. While specific project timelines have not been detailed, both countries have expressed commitment to advancing their bilateral relations through this initiative.