Realpolitik at the Himalaya: India–China Trade Reopening via Lipulekh and the Strategic Costs for Nepal

Abstract

This article analyses the 2025 reopening of the Lipulekh trade route between India and China, utilising a Realist perspective to assess its strategic implications for Nepal. This paper utilises a qualitative case study approach rooted in Classical and Structural Realism to examine how the bilateral agreement illustrates power politics, spheres of influence, and the geopolitical vulnerabilities faced by Nepal. This study utilises historical context, strategic interest analysis, and policy review to illustrate that the reopening presents opportunities for regional trade yet poses risks of marginalising Nepal and compromising its sovereignty. The article concludes with policy recommendations for Nepal to effectively navigate the challenging environment via diplomatic diversification and strategic engagement. The findings contribute to the literature on small-state security dilemmas, demonstrating how middle-power bargaining can result in the exclusion of weaker neighbours from essential regional processes.