Nepal–US Relations: The 1947 Treaty, the MCC Compact, and Which Numbers Hold Up

Nepal and the United States have kept a working relationship for longer than most people reading this have been alive. Ask what it consists of and you get a pile of things: a treaty, a grant compact, aid programmes that have changed shape more than once, students, a diaspora, and a great deal of argument. Ask what is documented, and the pile gets smaller. It is not empty, though.

This piece sticks to what can be checked. Where a current, checkable figure wasn't available, the point is made in words instead of numbers. That is a deliberate choice, not an oversight.

The 1947 treaty that nobody argues about

The Treaty of Commerce and Navigation between Nepal and the United States was signed in April 1947 and entered into force in April 1948. Both governments still list it: it appears in the US State Department's treaty records and in Nepal's Ministry of Foreign Affairs treaty listing, under the same name and the same dates. No discrepancy between the two.

It is the oldest piece of the relationship, and unusually for a 1947 instrument, it is still the legal reference people reach for when they talk about trade and navigation between the two countries. If you only remember one date from this article, make it this one.

MCC compact: what was committed, and when it ends

The Millennium Challenge Corporation compact with Nepal was signed in September 2017. Parliament ratified it in February 2022, after an argument that ran for years and split parties down the middle, and it entered into force on 30 August 2022.

The money is a US grant of $500 million plus a Government of Nepal contribution of $130 million, so $630 million in programme value. The compact runs five years from entry into force, which puts the closing date at 30 August 2027.

There are two components. One builds high-voltage transmission lines and substations; the other funds maintenance on strategic roads. MCC publishes quarterly progress reporting on physical completion, and that is where you should look for current percentages. This article won't quote a completion figure it can't point you to, and if you see one quoted elsewhere without a document behind it, treat it as decoration.

US aid after the 2025 reorganisation

Until mid-2025, most US development assistance to Nepal ran through USAID. That changed on 1 July 2025, when the agency ceased to exist independently and its remaining functions were absorbed by the State Department. So the useful question in late 2026 is not "what is USAID doing in Nepal" but "what is the State Department funding now, and how much of the old portfolio survived the move".

Answering that precisely is harder than it should be. Country-level Nepal figures published before the reorganisation are now dated, and post-reorganisation reporting is organised by functional bureau rather than by country, which makes the Nepal slice difficult to total. What can be said with confidence is that health and nutrition work, and earthquake reconstruction and resilience, were the two largest strands of US assistance to Nepal before the change, and both were carried into the new structure in some form.

Here is a simple test. Anyone quoting an exact aid obligation for Nepal in 2026 should be able to show you the document. The document should be State Department-branded, and it should be dated. A USAID-branded fact sheet dated after July 2025 is not a thing that exists.

Nepali students: the cleanest data strand

The Institute of International Education's Open Doors survey counted 16,742 Nepali students in US higher education in the 2024/25 academic year, reported in late 2025. Nepal sits consistently among the larger places of origin, which for a country of its size is striking.

Open Doors uses a consistent methodology each edition, which makes it the most comparable number in the whole bilateral relationship. Watch the survey year when you cite it: 2024/25 data is not the same as the current academic year, and the gap matters when enrolments move.

The diaspora: two counts, two definitions

The US Census Bureau's American Community Survey, 2023 five-year estimates, puts the Nepali-ancestry population at roughly 205,000, with a margin of error around 12,000. A different table in the same release counts about 162,000 US residents born in Nepal.

The gap between those two figures is not an error. Ancestry counts people who claim Nepali descent, including those born in the US. Place of birth counts only the foreign-born. Nepal's own census uses different definitions again, so its numbers will never match the American ones.

Practical rule: cite one source, name it, and don't add it to another source's count. Commentary that blends them produces diaspora figures nobody can defend.

September 2025: the protests and the foreign-funding claims

In early September 2025, protests that began over social media regulation and official corruption turned into the most serious domestic upheaval Nepal had seen in years. People were killed. The death toll then became a dispute in its own right.

Official figures were revised upward more than once in the days that followed, as people injured during the crackdown died in hospital. Nepali human rights monitors and victims' groups have published their own counts, which differ from the government's because they apply different criteria, counting deaths in custody and deaths from injuries sustained during the protests. Early counts, including some that circulated widely in the first 48 hours, were too low. They should not be quoted as a final toll.

If you need a number, take the most recent release from the official inquiry or from a named monitor, give the date, and say which criteria it uses. Anything less misleads on a claim where accuracy matters more than fluency.

Alongside the street protests came claims that outside money or coordination had driven them. No government, Nepali, American or any other, has put on the record evidence substantiating those claims. They remain unverified, and should be described that way.

Trade, in broad shape

Nepal's exports to the United States are narrow: ready-made garments, pashmina, carpets and handicrafts, mostly. Imports run the other way and are heavier, dominated by machinery, aircraft and parts, and medical equipment. The merchandise balance sits firmly in the American favour.

Nepal's Department of Customs publishes the annual and monthly figures, including by partner country, and those are the numbers to use. Provisional and revised releases differ, so check which one you are looking at before quoting it. The United States is one of Nepal's larger export destinations but nowhere near the largest; the overwhelming share of Nepali trade still moves south, to India.

What can be measured, and what can't

Migration, student counts, compact disbursement, trade: every one of these has an owner, a publication schedule and a definition. That is precisely why they can be argued about in public without everyone shouting past each other.

Public opinion about the United States has no equivalent in Nepal. We could not find a recent, nationally representative survey of Nepali attitudes toward the US, having looked at the Asia Foundation's Nepal surveys, Pew's global attitudes work and Nepali polling organisations. Commentary from the diaspora, however sharp, is not a substitute for one. That absence is worth sitting with rather than papering over.

Where these figures come from

Treaty dates: the US State Department's treaty records and Nepal's Ministry of Foreign Affairs treaty listing. Compact amounts and dates: the compact text and MCC's Nepal country page. Student numbers: IIE Open Doors, 2024/25 academic year. Diaspora estimates: American Community Survey 2023 five-year tables B04006 and B05006. Trade: Nepal Department of Customs. Aid: State Department reporting after July 2025, with pre-2025 figures treated as historical.

Each of those is something a reader can go and check. That is the only standard worth applying.

Published 19 October 2026.

Related: Nepal Foreign Relations Overview | MCC Compact Nepal: Full Details | Nepali Diaspora Statistics