Nepal and Nicaragua established diplomatic relations on October 5, 1986.
Since then their relationship has been based on goodwill, friendship, and mutual understanding. Both countries share status as least developed countries and members of the Non-Aligned Movement and G77.
Their relationship has been cordial but with minimal trade. Both countries and the United States are currently involved in a legal battle regarding the termination of Temporary Protected Status (TPS) for nationals of Honduras, Nepal, and Nicaragua, with the final termination date currently set for November 18, 2025, after a pause was lifted by the Ninth Circuit Court of Appeals on August 20, 2025.