The August 26 flash floods, triggered by the collapse of glacier-covered mountain slopes, landslides and the subsequent swelling of the Bhotekoshi River along the Nepal-China border, flattened thousands of homes and resulted in devastating environmental and humanitarian losses. Rapid glacier retreat, destabilising mountain slopes and the growing threat of glacial lake outburst floods (GLOFs) are making the Himalayan landscape increasingly fragile. All three major transit points between Nepal and China remain closed. The floods illustrated the vulnerability of Nepal’s cross-border connectivity infrastructure, particularly along its high-altitude, mountainous frontier with China’s Tibet Autonomous Region. They are, to quote former UN Secretary-General Kofi Annan, “problems without passports” disrupting cross-border trade, transit, connectivity and supply chains between Nepal and China. The “Himalayan Tsunami,” in words of Nepal’s Prime Minister, Balendra Shah, is not a local tragedy, but a “close warning for humanity.”
Thousands of miles from Nepal, disruption in the Strait of Hormuz — a vital artery for global oil shipments and a significant share of liquefied natural gas—can quickly create hardships from roads to households' kitchens. Other maritime routes, including the Panama Canal, Suez Canal, Bab al-Mandeb and Turkish Straits, are crucial to the flow of energy and consumer goods around the world, yet remain vulnerable to geopolitical crises. Closer to home is the Strait of Malacca, one of the world’s busiest maritime passages and a vital route for energy supplies moving from the Middle East to Asia. It connects the Indian and Pacific Oceans. India lies near the strait's western approaches, an area important to its Act East policy. Great Nicobar, India’s largest island, together with the Andaman Islands constitutes the Union Territory of Andaman and Nicobar Islands—India’s strategic bridge between the Bay of Bengal and Southeast Asia.
Strategic competition
India plans to develop Great Nicobar as a major commercial and logistics centre, including an international container transshipment terminal at Galathea Bay, a dual-use airport, energy facilities and a township. Its location near the Strait of Malacca gives it considerable commercial and strategic importance. Strategic competition between China and India is already visible across South and Southeast Asia and the Indian Ocean, including the Strait of Malacca, Singapore and the entrance to the South China Sea. The strait is about 2.8 miles at its narrowest point. In November 2003, Chinese President Hu Jintao expressed concern that “certain major powers” could block the strait and threaten China’s economy. Strategists have since described China’s reliance on this passage as the “Malacca dilemma.”
Great Nicobar could help India monitor container traffic now handled by ports such as Singapore, Colombo and Port Klang, improve maritime surveillance, and strengthen its ability to respond to emergencies in the eastern Indian Ocean. A disruption in the Strait of Malacca could eventually raise transport, fuel and commodity costs. Nepal should therefore watch developments around both the island and the strait, carefully assessing how changing regional conditions may affect its economic security. Most goods imported by Nepal from distant markets begin their journey by sea before reaching Indian ports and continuing overland. Petroleum products, machinery, electronic equipment, industrial inputs, fertiliser and many consumer goods depend on maritime supply chains.
If competition near the Strait of Malacca raises freight charges, and increases delivery times, the consequences could travel through regional supply networks. Nepal could face higher import costs, pressure on foreign-exchange reserves, inflation and shortages of essential commodities. The burden would fall most heavily on low-income households and businesses already facing high transport costs.
More efficient Indian port and logistics infrastructure could benefit Nepal. If Great Nicobar reduces congestion, improves container movement and enhances the reliability of Indian supply chains, some gains could reach Nepal through shorter delays and better regional connectivity. The larger concern is intensifying strategic competition across the Indo-Pacific. India, China, the United States, Japan, Australia and Southeast Asian countries all have interests in keeping this vital passage secure.
First, Nepal needs a permanent mechanism and enhanced institutional capacity to study developments in its neighbourhood and monitor maritime and regional supply-chain risks. The ministries responsible for foreign affairs, commerce, finance, industry and energy should regularly assess disruptions at Malacca, Hormuz and other strategic waterways linked to fuel supplies, food security and fertiliser procurement. Second, Nepal should strengthen contingency planning for essential imports. Maintaining reasonable reserves of petroleum, medicine, fertiliser and critical industrial materials would provide time to respond to temporary disruptions. Strategic reserves should be guided by risk assessments.
Third, Nepal should diversify transit routes and supply chains. India remains Nepal’s most important transit partner because of geography, infrastructure and market connections. Diversification should strengthen resilience, not become an instrument of geopolitical competition. Nepal should operationalise dry ports and border facilities while carefully evaluating northern transit routes as supplementary options. Fourth, Nepal should pursue better transit networks and arrangements with India that could reduce the uncertainty of Nepali trade and the ballooning trade deficit. Expanding Indian port capacity allows both countries to facilitate faster customs clearance, digital cargo tracking, predictable rail services, inland logistics terminals and transparent transit charges.
Environmental considerations
Fifth, Kathmandu must remain alert to environmental considerations. Nepal should draw a broader lesson: strategic infrastructure must be evaluated not only in terms of investment and security, but also through ecological resilience, social safeguards and long-term economic viability. Finally, Nepal’s foreign-policy priorities begin with its neighbours. Its policy of friendship with all and enmity with none provides a basis for constructive engagements with the wider international community. Nepal has long pursued a policy of restraint and pragmatism, respecting the legitimate security concerns of its neighbours while expecting reciprocity. Clarity and consistency remain important as regional competition intensifies.
Nepal cannot afford to ignore developments in an increasingly interconnected and interdependent world. For landlocked Nepal, although the sea is geographically distant, it is never economically remote, as its economic lifelines extend far beyond its land borders. Government ministries, universities, policy institutes and think tanks should develop greater expertise in maritime trade, port economics, supply-chain geography and Indo-Pacific diplomacy. This calls for a stronger domestic capacity, reasoned and seasoned diplomacy and enhanced regional connectivity.
(The author is a former ambassador)
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