ELECTIONS IN NEPAL: FUTURE PROSPECTS FOR THE NEPALESE GENZ
On 5 February, elections were held in Nepal for the House of Representatives, the lower house of the country’s Federal Parliament. The results of this election painted a picture dominated by discontent among the younger sections of the population and the victory of an outsider, Balendra Shah, who, whilst marking a break with the historical establishment, also presents elements of uncertainty, particularly regarding the feasibility of the proposed policies and continuity in Nepal’s international relations.
The election was dominated by Balendra Shah, leader of the Rastriya Swatantra Party (RSP), which won 182 of the 275 seats available. The RSP, founded three years ago and considered one of Nepal’s most progressive political alternatives, won the support of Nepal’s GenZ and saw its seat count rise by 162, up from the 20 it held in the previous legislature. On the other hand, the established parties, including the Communist Party of Nepal (CPN-UML), linked to Sharma Oli, the Nepal Communist Party (NCP), formed in November 2025 through the merger of ten left-wing parties and groups, and the Nepali Congress, a centrist party modelled on its Indian counterpart, have instead suffered significant losses. The Congress secured only 38 seats, losing 51; the CPN-UML arrived third with 25 seats, marking a drop of 53; and finally, the NCP ended up with 17 MPs, compared to 45 in the previous legislature.
These results illustrate the extent to which the protests of 8 September 2025 have generated a shift in the country’s political direction, particularly given that 800,000 members of GenZ were able to vote for the first time. Last September, in fact, young Nepalese people were at the forefront of a wave of large-scale protests against the established political parties and the widespread corruption within the system, linked to issues such as nepotism and misgovernance. The demonstrations were also an expression of the population’s deep frustration, stemming from the economic consequences of prolonged political instability.
Economically, although Nepal has shown some signs of recovery, including real GDP growth rising from 2% in the 2023 financial year to an estimated 4.3% in 2025, unresolved structural issues persist, fuelling the country’s economic insecurity. More specifically, data updated through 2024 indicate that in a context where over 60% of the population is under 30, youth unemployment exceeds 20%. In addition, high poverty rates are recorded, whilst projections for 2026/2027 do not appear to signal any structural improvement. Given this context, many members of Nepal’s GenZ have emigrated abroad, particularly to the member states of the Gulf Cooperation Council, which are estimated to host around 4.5 million Nepalese migrant workers. The national economy has therefore become, over the years, heavily dependent on remittances, which are said to contribute over a quarter of GDP, masking the weakness of job creation at the national level. Finally, the tourism sector, another key driver of the national economy, has also seen a significant decline in recent years.
In this context, Balendra Shah’s victory appears to embody the response of Nepal’s GenZ to the profound disillusionment with the traditional establishment, favouring a party considered more progressive and closer to young people, capable of appealing not only to urban youth but also to the more rural sections of the population. Shah’s ability to consolidate his political credibility and national prominence emerged particularly from his experience as Kathmandu’s mayor. In this context, indeed, the promotion of a programme of infrastructure regeneration and the expansion of essential services enabled him to secure widespread popular support.
In light of these factors, the RSP’s election manifesto appeared consistent with Shah’s profile and with the issues raised by the recent protests. In particular, the party committed to creating 1.2 million jobs to reduce forced migration, increasing Nepal’s per capita income, and providing safety nets such as health insurance for the entire population, all within five years. However, these proposals, which are predominantly social in nature and focused on the short- to medium-term, raise significant concerns regarding both timing and implementation. The stated objectives, in fact, appear difficult to achieve within the proposed timeframe, and would also require a technical and administrative apparatus capable of initiating and sustaining the reforms in question – an apparatus of which the country does not seem to be sufficiently equipped. Finally, questions have arisen regarding the potential impact of an infrastructure modernisation project on the most vulnerable social groups, given the history of property confiscation by law enforcement during Shah’s tenure as mayor of Kathmandu. In this context, the absence of these prerequisites, combined with the need to assess the financial sustainability of the measures, could erode Shah’s political stability in the long term.
Finally, it remains unclear what stance the new RSP-led government will adopt on the international stage, particularly with regard to the historical interests of the main regional players: China and India. For China, the country plays a security role in relation to Tibet and serves as a stepping stone for expanding its influence in South Asia, whilst for India, it is of fundamental importance, particularly in terms of water resources. In recent decades, the historic rivalry between India and China in Nepal has gradually intensified at various levels, particularly affecting the development of infrastructure and commercial projects. China, for example, as part of the Belt and Road Initiative, has promoted measures to construct and expand motorways, railways, and hydroelectric power stations. Furthermore, through the Chinese Agency for International Development Cooperation, it has supported various Nepalese projects, with a total commitment of $1.3 billion. Similarly, India has also invested in Nepal, coming to account for approximately 64.1% of Nepal’s total trade, amounting to $7.87 billion in the Indian fiscal year 2023–2024, and has promoted the implementation of infrastructure projects relating to roads, bridges, cross-border railway lines, integrated checkpoints and oil pipelines. In this context, Kathmandu’s relations with regional actors would therefore appear crucial to Nepal’s economic development. Nevertheless, Shah’s latest statements would seem to suggest the adoption of a less conciliatory stance towards Beijing and New Delhi, potentially giving rise to friction in the short to medium term.