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This paper analyzes the different strategies pursued by China and India in their ongoing security competition in Nepal, and the latter's foreign policy responses to this competition. It examines whether both China and India have accepted the status quo in Nepal, or are incessantly looking for opportunities to expand their influence in the country. First, a theoretical framework of great power politics is provided to examine the Sino-Indian power competition vis-à-vis Nepal. This is followed by an examination of Chinese and Indian foreign policy strategies in Nepal. Finally, Nepal's foreign policy response to preserve its sovereignty and security is examined. This paper has broader implications for small states seeking to preserve their sovereignty in the context of the great power competition for exercising hegemony over them. [ABSTRACT FROM AUTHOR]