The complex topography, geology, and tectonic environment prevailing in the Himalaya are the main challenges while applying the unlined or shotcrete lined pressure tunnel concept for hydropower projects. In addition, rock masses in the Himalayan region are influenced by faulting, folding, schistosity, and jointing to a varying degree representing geological complexity. Similarly, frequent occurrence of large scale earthquakes changes in situ stress dynamics. In spite of these challenges, an unlined/shotcrete lined pressure tunnel is being constructed at the headrace tunnel system of Upper Tamakoshi Hydroelectric Project (UTHP) in the Nepal Himalaya. This article studies the unlined or shotcrete lined pressure tunnel in terms of the topographical conditions, in situ stress state, and overall rock engineering aspects. First, the pressure tunnel alignment is assessed using the Norwegian confinement criteria. Second, the minimum principal stress state is assessed using numerical simulation by validating measured in situ stress conditions. Finally, a comprehensive assessment on the rock engineering aspects of the headrace tunnel is carried out. It has been found that if there exist good quality rock mass with tight joints, it is possible to apply the unlined/shotcrete lined pressure tunnel system in the Himalaya provided that the stress requirement is fulfilled. It was also found that the Norwegian confinement criteria are too optimistic for direct use in the design of high pressure headrace tunnel alignment. The detailed rock engineering assessment and stress state analysis indicated that there are some critical locations along the Upper Tamakoshi headrace tunnel alignment. This is specially the case for an about 700 m downstream stretch of the headrace tunnel from where there is a risk of hydraulic jacking, which may possibly lead to excessive water leakage during power plant operation.