FEB 10

Mains   > International relations   >   India and Neighbours   >   India- Nepal


  • The year 2021 saw Kathmandu and Delhi making efforts to reset its bilateral ties with high-profile talks and visits.


  • Founded on the age-old connection of history, culture, tradition and religion, Nepal and India enjoy excellent bilateral ties.
  • Nepal shares a border of over 1850 km with five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.
  • The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.



  • There are regular exchanges of high-level visits and interactions between India and Nepal. Eg: Prime Minister Narendra Modi visited Nepal four times in six years.
  • Parliamentary exchanges: Members and officials of Nepal’s Parliament often conduct study tours to India. In 2019, the Federal Parliament of Nepal formed ‘Nepal-India Parliamentary Friendship Group’ to strengthen the cooperation.


  • Government of India has its Embassy in Kathmandu and a Consulate General in Birgunj (south-central part of Nepal). Government of Nepal has its Embassy in New Delhi and a Consulate General in Kolkata.


  • Trade: India is the largest trading partner of Nepal. India has provided transit facility to Nepal for the third country trade. Total bilateral trade in 2018-19 reached INR 57,858 cr. Nepal’s main imports from India include petroleum products; motor vehicles, other machinery & parts and medicine.
  • Investment: Indian firms are among the largest investors in Nepal, accounting for more than 30% of the total approved foreign direct investments.


  • India has been assisting the Nepal Army in its modernisation by supplying equipment and providing training.
  • Assistance during disasters, joint military exercises and bilateral visits are other aspects of India’s defence cooperation with Nepal. Eg: The Indo-Nepal Joint Military Exercise SURYA KIRAN is conducted alternately in India and in Nepal.
  • The Gorkha regiments of the Indian Army are raised partly by recruitment from hill districts of Nepal.

Disaster management:

  • Following the devastating 2015 earthquake, India swiftly dispatched National Disaster Response Force (NDRF) teams and special aircrafts with rescue and relief materials to Nepal. India is also providing grants to support reconstruction.
  • During the Pandemic, India provided one million doses of Oxford-AstraZeneca’s Covishield vaccine to Nepal as grant assistance.

Connectivity and Developmental partnership:

  • India’s development assistance to Nepal focuses on creation of infrastructure in the areas of connectivity, health, water resources, education and rural & community development. Eg: B.P. Koirala Institute of Health Sciences, Dharan
  • In recent years, India has also assisted Nepal in development of border infrastructure. Eg: Integrated Check Post at Birgunj (Nepal)

Water resources:

  • A three-tier bilateral mechanism was established in 2008 to discuss issues relating to cooperation in water resources, flood management, inundation and hydropower between the two countries.

Energy cooperation:

  • An important Power Trade Agreement was signed between the two countries in 2014 paving way for the power developers of the two countries to trade electricity across the border without restrictions.
  • The two countries have undertaken various collaborative projects such as the Lower Arun Hydropower Project, Upper Karnali and Trishuli Hydropower Station.
  • Cooperation in oil is promoted through South Asia’s first cross-border petroleum products pipeline, constructed by Indian Oil Corporation, connecting Motihari in India to Amlekhgunj in Nepal.

Human resource development:

  • India provides around 3000 scholarships/seats annually to Nepalese nationals for various courses at the Ph.D/Masters, Bachelors and plus–two levels in India and in Nepal.


  • The B.P. Koirala India-Nepal Foundation was set up in 1991 to foster educational, cultural, scientific and technical cooperation between India and Nepal. The Swami Vivekananda Centre for Indian Culture was set up in Kathmandu in 2007 to showcase the best of Indian culture.
  • Besides these, Agreements have been signed between cultural institutions such as Sahitya Kala Akademi and Nepal Academy, and between Doordarshan and Nepal TV.


  • Around 6,00,000 Indians are living in Nepal and six million Nepalis work in India. Nepalese citizens avail facilities and opportunities on par with Indian citizens in accordance with the provisions of the Treaty. Nearly 8 million Nepalese citizens live and work in India.

Multilateral and Regional Fora:

  • Both Nepal and India have common approach to regional and multilateral institutions and hence, work in tandem in the United Nations, Non-aligned Movement and other international fora.
  • Furthermore, both the countries have been deeply engaged in the regional and sub-regional frameworks of SAARC, BIMSTEC and BBIN.


  • Border disputes:
  • Anti-India sentiments:
    • Criticism over India’s “Big Brother” behaviour, border disputes, India’s criticism of Nepal’s 2015 constitution and subsequent blockade, supplemented by narratives from China-backed political parties have created strong anti-Indian sentiments. This trust deficit hinders effective cooperation.
  • China factor:
    • China has been actively pursuing outreach with the political parties and has begun to play a visible role in Nepal’s domestic politics. Its economic weight positions it as a potential development partner and Nepal has enthusiastically joined in the Belt and Road Initiative.
  • Internal security concerns:
    • With Nepal and India sharing a porous border, India has always been suspicious about the possibility of terrorists and traffickers using the border to cause harm to India.
  • Political instability:
    • With 28 governments in the past 32 years, Nepal continues to remain hostage to petty party politics, which has prevented the realization of any significant developmental progress.  
  • Delayed completion of projects:
    • The issues between Nepal and India are affecting the implementation of various Indian-aided projects in Nepal.
    • Eg: The recent border dispute has cast a shadow on the future of the proposed Pancheshwar multipurpose dam project.


  • Encourage talks:
    • Since Sher Bahadur Deuba came to power in Nepal, there have been several rounds of interactions between the two side. India needs to leverage on this and promote talks to find amicable solutions to the issues surrounding India-Nepal relations.
  • Encourage balance relations:
    • Nepal’s dependence on India is more than India’s dependence on Nepal. To increase India’s dependence on Nepal, it is necessary to place the increase in trade and economic activities at the forefront.
  • Adhere to non-interference:
    • India should maintain the policy of staying away from Nepal’s internal affairs should refrain from actions that antagonise the people of Nepal.
  • Invest in hydropower:
    • Current hydroelectric power generation in Nepal is at 650 MW per annum, which is less than one percent of the proven potential.  To utilize this and meet India’s rising demand for clean energy, investments in hydroelectric power needs to be made.
  • Leverage regional platforms to foster cooperation:
    • Regional platforms like the BIMSTEC and the SAARC could be leveraged to foster cooperation in common areas of interest like technology-driven agriculture.
  • Economic support:
    • To deepen its engagement with the Nepal, India needs to encourage its private sector enterprises (such as telecom and power) to increase investment in the region.
  • Security cooperation:
    • Both countries should strengthen cooperation in areas of counter-terrorism, counter-radicalisation and drug trafficking, through measures like regular intelligence sharing and frequent joint security exercises.


Q. Nepal-India relations are deep, wide-ranging, and unique, but also fraught with complexities. Discuss?