Debt trap has been a topic of concern in Nepal, as a significant portion (approximately one tenth) of the total revenue needs to be allocated annually for paying the interest and principal to the foreign lenders.

Nepal has already built a national consensus on not accepting loans to build Chinese railways and rather prioritise grants (Republica, 2019). Hence, debt trap doesn’t appear as a challenge in the context of Nepal-China railways. But, expressing suspicion over China’s flagship project, even the United States has cautioned Nepal not to fall into the Chinese ‘debt trap’.