Nepal is preparing to propose an economic package of approximately $2 billion, comprising concessional loans and grants, to the Indian government during Prime Minister Balen Shah’s upcoming official visit to India. Prime Minister Shah is scheduled to visit India from November 22 to 24.
The proposed package includes a request for a $1 billion line of credit for hydropower and other infrastructure development projects. Nepal also plans to seek $500 million in grant assistance for the upgrade of the Siddhartha Highway, which connects the Sunauli border crossing with Pokhara. An additional $500 million in grant assistance is being proposed for post-flood and landslide reconstruction efforts.
Discussions regarding this economic package were held during Indian Foreign Secretary Vikram Misri’s visit to Kathmandu on November 4, 2026. Misri met with Prime Minister Balen Shah, Finance Minister Dr. Swarnim Wagle, Foreign Minister Shishir Khanal, and other high-ranking officials to discuss bilateral relations, mutual cooperation, and the upcoming visit.
During the visit, Nepal will also advocate for additional air entry routes from India and include the Pancheshwar Multipurpose Project, envisioned under the 1996 Mahakali Treaty, as a key agenda item. Joint inauguration of several significant projects completed with India’s assistance is also planned.
The $2 billion economic package proposed by Nepal represents approximately 12.5% of Nepal’s total budget for the fiscal year 2083/84, which stands at Rs 21 kharba 24 arba 34 crore (approximately $16 billion). The International Monetary Fund (IMF) projects Nepal’s real Gross Domestic Product (GDP) growth to be limited to 3.6% in 2026.
While Prime Minister Shah’s visit is expected from November 22 to 24, both countries have yet to make a formal announcement. India has not issued any official statement regarding the proposed package.
Background
- Prime Minister Balen Shah is making his first visit to India approximately eight months after assuming office.
- Indian Prime Minister Narendra Modi extended an invitation to Shah on Chaitra 13, the day of his oath-taking ceremony.
- Shah had previously stated he would not undertake any foreign visits until at least 100 days into his term.
- Finance Minister Dr. Swarnim Wagle and Foreign Minister Shishir Khanal visited Delhi earlier to prepare for the Prime Minister's visit, with an initial aid package proposal presented during Wagle's visit in Asoj.
What happens next
An official from the Ministry of Finance stated that negotiations on the package are likely to conclude and be announced during the visit.
