Nepal Seeks $5 Billion for Flood Recovery, Signals Reset in Ties with India

Nepal is seeking international backing for a reconstruction effort estimated at $4.7–5 billion over the next three to five years, a month after floods devastated large parts of the country, Finance Minister Swarnim Wagle has said.

Mr. Wagle, an economist and former United Nations Development Programme official, chose Delhi for his first trip abroad since taking office, holding talks with the Indian government on how it can contribute to the rebuilding effort. He is also due to attend meetings of the Asian Infrastructure Investment Bank, the International Monetary Fund and the World Bank to mobilise support.

Rapid assessments by Nepal's National Disaster Risk Reduction and Management Authority put direct damages at about $1.8 billion and losses at roughly $900 million at replacement value. Mr. Wagle said the final bill would be higher because the aim is to rebuild for resilience rather than simply restore what existed. He added that confirmed fatalities from the floods could reach 8,000–10,000, a toll comparable to the 2015 earthquake, though the damage this time is concentrated in roads, bridges, suspension bridges, housing and hydropower infrastructure.

India, he said, has been supportive and proactive. Discussions covered signature projects and assistance that could be adapted to reconstruction needs, drawing on the model of the $250 million grant and $750 million line of credit extended after the 2015 earthquake. Mr. Wagle said concessional credit suits publicly built hydropower plants, transmission lines and substations, while roads, bridges and public housing are better served by grants. An agreement reached in December 2025 allows subsequent Indian lines of credit to be denominated in Indian rupees, a facility New Delhi extends to only a few countries.

On the wider relationship, Mr. Wagle said the new government in Kathmandu wants a reset with India and a review of long-pending trade and connectivity projects, including overflight rights for Nepali airports, while handling difficult issues such as the border dispute constructively. He said Prime Minister Balen Shah's first bilateral visit abroad will be to India and is expected well before the end of the year. Mr. Shah is scheduled to address the UN General Assembly and return immediately, with a courtesy call on the UN Secretary-General the only item on his agenda there.

Asked about suggestions from Nepal's foreign minister that major polluters owe the country reparations, Mr. Wagle said that line of thinking is unhelpful at present, though the issue will return at climate talks, including the next Conference of the Parties in Turkiye in November 2026. He described the loss and damage fund as inadequate, noting that only a modest $20 million had been granted. He cited scientific findings that climate change contributed to permafrost thaw and glacial thinning in the Himalaya.

Nepal is not abandoning big hydropower, highways and tourism, he said, but must build differently, learning from errors such as tunnels placed too close to river banks with single entry and exit points, and highways built along rivers rather than ridges. The Kathmandu–Raxaul highway built by India in 1956 followed mountain ridges and has withstood the weather, whereas later roads along river banks proved more vulnerable.

Mr. Wagle defended the four-year-old Rastriya Swatantra Party government against criticism of inexperience, saying voters backed it for its integrity and focus on good governance and economic growth. He said the administration has a heavy legislative agenda to scrap old laws and introduce new ones, and that the Prime Minister governs in a different style, with digitalisation playing a role.