Two countries landlocked between India and China

Nepal and Bhutan are two poor landlocked Himalayan countries, sandwiched between a democracy and an authoritarian one-party state: India and China. After an authoritarian past, during the last decade, they have begun reforms in order to switch towards a democratic model.After a long and complicated path, Nepal succeeded in adopting a new constitution in 2015. Its first post-constitution government is run by an alliance of communist parties. In Bhutan, the king has successfully steered the country towards democratisation, as confirmed by the October 2018 general elections.While historically the two countries have nurtured solid relations with India, in recent years Beijing has expanded its footprint in the region considerably, challenging Delhi's traditional sphere of influence and increasing its sense of encirclement.

In 2017 this led to a crisis referred to as the 'Doklam Plateau standoff'. There is currently a window of opportunity for Nepal and Bhutan to diversify their economic and security partnership and to rebalance their foreign policies betweentheir two big neighbours.The EU has been supporting the two countries on their democratic journey and tripled resources for both countries' development for the 2014-2020 period. As they are among the world's poorest countries, Nepal and Bhutan benefit from the EU's 'Everything But Arms' scheme, which grants full duty free and quota free access to the EU single market for all products.