A new Congressional Research Service insight outlines how Nepal’s parliamentary elections on March 5, 2026, produced a decisive victory for the Rastriya Swatantra Party, marking a major shift away from the country’s long-dominant political establishment.
According to the report, the elections took place six months after widespread youth-led protests forced the resignation of Prime Minister K.P. Sharma Oli. The protests, which began Sept. 8, 2025, were initially sparked by the government’s decision to block 26 social media platforms for failing to comply with new regulations. Demonstrators, mostly young people, expressed deep frustration with corruption and the lavish lifestyles of some officials’ children. What began as peaceful gatherings in Kathmandu quickly escalated into widespread unrest after police opened fire, leading to arson attacks on government buildings and other targets. Oli resigned Sept. 9, 2025. The unrest left at least 75 people dead and more than 2,000 injured, with economic damages estimated at more than $586 million.
Following Oli’s resignation, Balendra Shah — better known as Balen, a civil engineer and rapper who had served as independent mayor of Kathmandu since 2022 — emerged as a prominent figure during the protests. Although Shah reportedly declined an offer to serve as interim prime minister, an online vote by youth protest leaders selected former Chief Justice Sushila Karki as interim leader. Karki was sworn in as Nepal’s first female prime minister on Sept. 12, 2025, after which President Ramchandra Paudel dissolved Parliament and called elections for March 5, 2026.
The election results represented a stunning repudiation of Nepal’s traditional political forces. The Rastriya Swatantra Party won 182 of 275 seats in the lower house, falling just two short of a supermajority. It was the first time since 1999 that a single party had secured a parliamentary majority in Nepal. The long-established parties fared poorly: the Nepali Congress won 38 seats, the Communist Party of Nepal–Unified Marxist Leninist (CPN-UML) 25 seats, and the Nepali Communist Party 17. Shah handily defeated Oli in his constituency, while several other senior politicians lost to RSP candidates. Shah was sworn in as prime minister on March 27, 2026.
The CRS report notes that Shah ran with the RSP in what some observers described as “a marriage of convenience,” despite having previously served as an independent mayor. Shah has gained popularity as an anti-establishment figure and reformer, though analysts describe his record as mayor as mixed and note that he has been short on specifics regarding his governing plans. He primarily communicates through Facebook posts rather than traditional media.
Analysts point to potential challenges ahead for the new RSP government, including possible tensions between Shah and RSP leadership. The party is described as “an umbrella organization that brings together those disaffected with existing parties under a technocratic vision centered on governance reform.” Shortly after taking power, the government unveiled a 100-point framework for reform. Key issues will include how the administration addresses corruption and pursues accountability for the violence during the September 2025 protests.
The incoming government also faces significant economic and geopolitical hurdles, including high youth unemployment, the return of migrant workers from Persian Gulf states, disruptions to remittance flows linked to U.S. and Israeli military operations against Iran, and ongoing energy shortages.
On foreign policy, the report says Shah’s approach is expected to be pragmatic and focused on national interests, with RSP leaders promising a “balanced and independent” policy centered on “development diplomacy.” It remains unclear how this will affect infrastructure projects under China’s Belt and Road Initiative, which have seen only glacial progress in Nepal.
The CRS report highlights several issues relevant to the United States. Nepal maintains relations with both India and China, its much larger neighbors. The Trump administration in 2025 ended more than $329 million in foreign assistance programs to Nepal and initially paused Millennium Challenge Corporation projects. However, in February 2025, Secretary of State Marco Rubio exempted the MCC Nepal Compact from the pause, and in July 2025 the administration confirmed the projects would continue. A November 2025 amendment increased funding for the compact by $50 million.
U.S. policy toward Nepal has long included support for Tibetan refugees in the country. For fiscal 2026, Congress appropriated $13 million for Tibetans outside Tibet, including programs in Nepal. The report notes that the Chinese government has reportedly pressured Nepal to restrict freedom of assembly and expression among Tibetans there.
The report, titled “Parliamentary Elections in Nepal” (IN12677, Version 2), was written by Maria A. Blackwood, analyst in Asian policy, and prepared for members and committees of Congress.
Kishor Panthi
View More PostsKishor Panthi is the founder and editor-in-chief of Khasokhas and NepYork. He is the author of three books, “Kampan,” "UNTRANSLATABLE" and “Zero Mile.” He writes about social issues, immigration, and politics.
