Nepal's Prime Minister K.P. Sharma Oli has recently defended the country's renewed agreement with China under the Belt and Road Initiative (BRI), asserting that it will significantly benefit Nepal's economic development. Following his four-day official visit to China, Oli emphasized that the agreements signed, including a framework for BRI cooperation, are aimed at enhancing Nepal-China relations and facilitating infrastructure projects that have long been stalled since the initial BRI agreement was signed in 2017.

During his visit, which marked a notable shift in diplomatic priorities as it was his first official trip outside Nepal since taking office, Oli met with Chinese President Xi Jinping and other high-ranking officials. Together, they signed ten agreements, including memorandums of understanding on trade and economic cooperation. Despite concerns about potential debt implications from Chinese loans, Oli ruled out signing any loan agreements during this trip, indicating a preference for grants and technical assistance instead.

Oli's government has faced internal debate regarding the approach to BRI financing, with some factions advocating for caution against loans due to Nepal's precarious economic situation. However, he believes that the framework agreement will pave the way for implementing much-needed infrastructure projects, thereby transforming Nepal from a landlocked to a land-linked country. The Nepali Congress party, a key coalition partner, has historically opposed heavy reliance on loans for such initiatives, reflecting broader concerns about national debt levels.

Prime Minister Oli's recent statements and actions underscore a strategic push to deepen economic ties with China while navigating the complexities of domestic political dynamics and external geopolitical pressures, particularly from neighbouring India.