• India and Nepal share not only social and cultural ties historically but, more important, an open border allowing seamless movement of people to further such ties. India and Nepal have cooperated on security issues with an objective to bolster each other’s security.
  • There has been a long tradition of free movement of people across the borders. It shares a border of over 1850 kms in the east, south and west with five Indian States – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand – and in the north with the Tibet Autonomous Region of the People’s Republic of China. The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.

Historical Ties

  • Nepal is an important neighbour of India and occupies special significance in its foreign policy because of the geographic, historical, cultural and economic linkages/ties that span centuries.
  • India and Nepal share similar ties in terms of Hinduism and Buddhism with Buddha’s birthplace Lumbini located in present day Nepal.
  • The two countries not only share an open border and unhindered movement of people, but they also have close bonds through marriages and familial ties, popularly known as Roti-Beti ka Rishta.
  • The foundation and of friendship between India and Nepal was laid with Indo-Nepalese friendship treaty in 1950.
  • As the number of Indians living and working in Nepal’s Terai region increased and the involvement of India in Nepal’s politics deepened in the 1960s
  • The Nepalese Citizenship Act of 1952 allowed Indians to immigrate to Nepal and acquire Nepalese citizenship with ease
  • Also in 1952, an Indian military mission was established in Nepal, which consisted of a Major General
  • In June 1990, a joint Kathmandu-New Delhi communique was issued pending the finalisation of a comprehensive arrangement covering all aspects of bilateral relations, restoring trade relations, reopening transit routes for Nepal’s imports, and formalising respect of each other’s security concerns.

Importance of Nepal

  • Nepal shares border with 5 Indian states- Uttarakhand, Uttar Pradesh, West Bengal, Sikkim and Bihar. Hence an important point of cultural and economic exchange.
  • Importance for India can be studied from two different angles: a) their strategic importance for India’s national security; and b) their place in India’s role perception in international politics.
  • Nepal is right in the middle of India’s ‘Himalayan frontiers’, and along with Bhutan it acts as northern ‘borderland’ flanks and acts as buffer states against any possible aggression from China.
  • Rivers originating in Nepal feed the perennial river systems of India in terms of ecology and hydropower potential.
  • Many Hindu and Buddhist religious sites are in Nepal making it an important pilgrim site for large number of Indians.
  • Janakpur, where the Hindu god Rama’s wife Sita was born is located in Nepal and is an important site for pilgrimage

Areas of Cooperation

A) Trade and economy

  • India is Nepal’s largest trade partner and the largest source of foreign investments, besides providing transit for almost the entire third country trade of Nepal.
  • The main items of exports from India to Nepal are petroleum products, motor vehicles and spare parts, m.s. billets, machinery and spares, medicines, hot rolled sheets, wires, coal, cement, threads and chemicals.
  • The main items of exports from Nepal to India are polyester yarn, textiles, jute goods, threads, zinc sheet, packaged juice, cardamom, G.I. pipe, copper wire, shoes and sandals, stones and sand.
  • Indian firms engage in manufacturing, services (banking, insurance, dry port), power sector and tourism industries etc.
  • Recently Cabinet approved crore investments for Arun-3 hydro project.The project will provide surplus power to India’s strengthening economic linkages with Nepal
  • Both public and private sectors of India have invested in Nepal.
  • Nepal and India have concluded bilateral Treaty of Transit, Treaty of Trade and the Agreement of Cooperation to Control Unauthorized Trade.
  • Indian firms are the biggest investors in Nepal, accounting for about 38% of Nepal’s total approved foreign direct investments.

B) Connectivity

  • Nepal being a landlocked country, it is surrounded by India from three sides and one side is open towards Tibet which has very limited vehicular access.
  • India-Nepal has undertaken various connectivity programs to enhance people-to-people linkages and promote economic growth and development.
  • MOUs have been signed between both the governments for laying electric rail track linking Kathmandu with Raxaul in India.
  • India is looking to develop the inland waterways for the movement of cargo, within the framework of trade and transit arrangements, providing additional access to sea for Nepal calling it linking Sagarmath (Mt. Everest) with Sagar (Indian Ocean).
  • Integrated check-posts have been set at various points on Indo-Nepal border namely (i) Raxaul-Birganj, (ii) Sunauli-Bhairahawa, (iii) Jogbani-Biratnagar and (iv) Nepalganj Road-Nepalgunj.
  • India has been assisting Nepal in development of border infrastructure through upgradation of roads in the Terai areas

C) Political Relations

  • Nepal-India relations are, in essence, much more than the sum of treaties and agreements concluded between the two countries.
  • The frequent high level visits have helped promote goodwill, trust, understanding and cooperation between the two countries and, have injected fresh momentum to further consolidate age-old and multi-faceted bilateral relations of friendship and cooperation on a more mature and pragmatic footing.
  • Government of India welcomed the roadmap laid down by the historic Comprehensive Peace Agreement of November 2006 towards political stabilization in Nepal, through peaceful reconciliation and inclusive democratic processes.
  • India has always believed that only an inclusive Constitution with the widest possible consensus by taking on board all stakeholders would result in durable peace and stability in Nepal.
  • India’s core interest in Nepal is a united Nepal’s peace and stability which has a bearing on India as well because of the long and open border shared between India and Nepal.

D) Development Assistance

  • Government of India provides development assistance to Nepal, focusing on creation of infrastructure at the grass-root level.
  • The areas assistance include infrastructure, health, water resources, and education and rural & community development.
  • Government of India’s Small Development Projects (SDPs) programme in Nepal extends assistance for the implementation of projects in critical sectors such as health, education & community infrastructure development.
  • India has been assisting primarily in the areas of infrastructure development and capacity development of human resources in Nepal.
  • P. Koirala Institute of Health Sciences, Dharan; Emergency and Trauma Centre at Bir Hospital, Kathmandu; and Manmohan Memorial Polytechnic at Biratnagar are some of the flagship projects completed and operationalized under the Indian assistance.
  • In the International Conference on Nepal’s Reconstruction held in Kathmandu in June 2015, the Government of India pledged a fund of US$ 250 million grant and US$750 million soft loan.

E) Defence Cooperation

  • Bilateral defence cooperation includes assistance to Nepalese Army in its modernization through provision of equipment and training.
  • India played a part in training and equipping Nepali police.
  • The two countries established security mechanisms such as the Nepal-India Bilateral Consultative Group on Security Issues.
  • India has special Gurkha regiments comprising soldiers recruited from Nepal within its armed forces to bolster security ties between the two countries.
  • India from 2011, every year undertakes joint military exercise with Nepal known as Surya Kiran.

F) Cultural Ties

  • India has signed three sister-city agreements for twinning of Kathmandu-Varanasi, Lumbini-Bodhgaya and Janakpur-Ayodhya.
  • Government of India initiatives to promote people-to-people contacts in the area of art & culture, academics and media include cultural programmes, symposia and events organized in partnership with different local bodies of Nepal, as well as conferences and seminars in Hindi.
  • India is establishing an E-library system across Nepal. The setting up of a Light & Sound show at Lumbini with Indian assistance is under process.
  • The Archaeological Survey of India (ASI) is involved in the renovation of the Pashupatinath Temple Complex in Kathmandu.
  • The Nepal–Bharat Library was founded in 1951 in Kathmandu. It is regarded as the first foreign library in Nepal. Its objective is to enhance and strengthen cultural relations and information exchange between India and Nepal.

G) Humanitarian Assistance

  • Nepal lies in sensitive ecological fragile zone which is prone to earthquakes, floods causing massive damage to both life and money, whereby it remains the biggest recipient of India’s humanitarian assistance.
  • Government of India swiftly dispatched National Disaster Response Force (NDRF) teams and special aircrafts with rescue and relief materials to Nepal.
  • India’s assistance, included tons of relief material including rescue equipment, medical supplies, food, water, tents, blankets and tarpaulin. Medical teams from India were deployed in various parts of Nepal
  • The Government of India has also been substantially supporting Nepal’s reconstruction efforts

H) Indian Community

  • Around 6,00,000 Indians are living/domiciled in Nepal.
  • These include businessmen and traders who have been living in Nepal for a long time, professionals (doctors, engineers, IT personnel) and labourers (including seasonal/migratory in the construction sector).

I) Multilateral Partnership

  • India and Nepal shares multiple multilateral forums such as BBIN (Bangladesh, Bhutan, India, and Nepal), BIMSTEC (Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation) NAM, and SAARC (South Asian Association for Regional Cooperation) etc.
  • Both the countries have been deeply engaged in these regional and sub-regional frameworks for enhancing cooperation for greater economic integration by harnessing collectively the potentials and complementarities available in the region.

J) Cooperation in Water Resources

  • Water resource is considered as the backbone of Nepali economy.
  • Both Governments have set up three-tier mechanisms called
    • Joint Ministerial Commission for Water Resources (JMCWR),
    • Joint Committee on Water Resources (JCWR) and
    • Joint Standing Technical Committee (JSTC) to implement agreements and treaties and also address water induced problems of flood and inundation.
  • There is also an additional mechanism – Joint Committee on Inundation and Flood Management (JCIFM) – which deals explicitly with the issues of inundation, embankments and flood forecasting.
  • 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. develop two mega hydropower projects – Upper Karnali and Arun III.
  • Government of India has been providing assistance to Nepal for strengthening and extension of embankments along Lalbakeya, Bagmati and Kamla rivers.
  • A Development Authority was set up in September 2014 to carry out the Pancheshwar Multipurpose project.
  • India and Nepal signed an agreement on “Electric Power Trade, Cross-Border Transmission Interconnection and Grid Connectivity” popularly known as the Power Trade Agreement (PTA) in October 2014.

K) Security Cooperation and Boundary Management

  • Security related issues are of prime concern to both the countries.
  • To deal jointly with each other’s security concerns, the two countries have institutionalized Home Secretary level meetings and established Joint Working Group on Border Management (JWG) and Border District Coordination Committees (BDCCs).
  • Nepal-India Joint Technical Committee formed in 1981 made important accomplishments in scientifically mapping Nepal India boundary.
  • The Boundary Working Group (BWG) established in 2014 has taken over the technical works related to Nepal-India boundary.
  • BWG has mobilized joint teams in the field for carrying out works relating to construction, repair and restoration of boundary pillars, preparation of inventory of encroachment of No Man’s land and cross border occupation, and GPS observation of boundary pillars.

Challenges and Roadblocks

  • Internal Security is a major concern for India; Indo-Nepal border is virtually open and lightly policed which is exploited by terrorist outfits and insurgent groups from North Eastern part of India eg. Supply of trained cadres, fake Indian currency.
  • Overtime trust deficit has widened between India-Nepal because of the Indian reputation for delaying implementation of various projects.
  • Nepal over the years has witnessed chronic political instability, including a 10-year violent insurgency, damaging Nepal’s development and economy.
  • There is anti-India feeling among certain ethnic groups in Nepal which emanates from the perception that India indulges too much in Nepal and tinkers with their political sovereignty.
  • There has been an increasing dominance of Maoism in Nepal’s domestic politics
  • Growing China-Nepal relations under the Belt and Road Initiative (BRI) and enhanced Chinese investment in connectivity and infrastructure projects to inter-link the two countries in several sectors indicated India’s waning influence in Nepal
  • Nepal finalized the protocol of the Transit and Transport Agreement with China in Kathmandu with an objective to allow Nepal access to four Chinese ports in Tianjin, Shenzhen, Lianyungang and Zhanjiang including access to dry ports and roads facilities intended to diminish Kathmandu’s trade dependence on New Delhi.
  • Issue of revising the Peace and Friendship Treaty which has served as the bedrock of bilateral relation since 1950.
  • Border disputes between two countries are another contentious issue that occasionally creates friction in bilateral relations. To enhance people-to-people relations, Nepal and India must resolve contentious issues relating to the border, including the two major areas of dispute at Susta and Kalpani.
  • There is a need for construction, restoration, and repair of boundary pillars, and the clearance of no man’s land on both sides.
  • Another point of friction relates to India demonetization. This badly affected Nepali nationals residing in Nepal as well as in India because those notes were legal tender in Nepal.
  • The birthplace of Gautama Buddha has long been a cultural and social issue devoid from the political landscape of both Nepal and India.
  • Human trafficking in Nepal is a serious concern. An estimated 100,000–200,000 Nepalese in India are believed to have been trafficked. Sex trafficking is particularly rampant within Nepal and to India, with as many as 5,000–10,000 women and girls trafficked to India alone each year
  • Nepal promulgated its new Constitution in 2015 but the Madheshis, the Janajatis and the Tharus, who are considered as the marginalized groups felt they were being left out in the new constitution. These groups, Madheshi in particular, then blockaded the border points. The Nepalese government accused India of deliberately worsening the embargo by not allowing vehicles to pass from check-points
  • The continuing perception that the water agreements concluded with India were not advantageous to the country and India’s failure to deliver on its commitments in time led to Nepalese distrust of India’s engagement and to uncertainty over implementing the Mahakali Treaty and commencing the construction of the Pancheswar Dam project under the treaty.
  • India’s foreign policy in the last five years has moved towards new policies — the Bay of Bengal Initiative for Multi-sectoral Technical Economic Cooperation (BIMSTEC), the Bangladesh Bhutan India Nepal Initiative (BBIN) and the Act East policy — rather than strengthening SAARC. India has lost interest in SAARC due to tensions with Pakistan.

Way Forward

  • Both the countries are affected due to the misuse of open border by internal and external forces, the responsibility of border management and regulation depends on both.
  • India should provide an alternative narrative for India-Nepal ties, one that takes into account longstanding people-to-people ties and cultural connect.
  • India should focus on fructifying the potential of hydropower cooperation, which has remained untapped largely due to differing perceptions.
  • Amend the Peace and Friendship Treaty of 1950 so that it is in line with modern standards if diplomatic engagement
  • India should maintain the policy of keeping away from internal affairs of Nepal, meanwhile in the spirit of friendship India should guide the nation towards more inclusive rhetoric.
  • With its immense strategic relevance in the Indian context as Indian security concern, stable and secure Nepal is one requisite which India can’t afford to overlook.
  • Nepal as a developing economy will need investment in key areas of its growth such as agriculture, manufacturing, information technology and tourism. India must focus on these areas and assist Nepal in its development.
  • India has an opportunity to capitalize on people-to-people contacts facilitated by its open border, suitable geographic location and historical and cultural ties (the factors that place India in an advantageous position compared with China) that exist between the two countries predominantly populated by Hindus.
  • Diversification of foreign relations and opening up of opportunities of higher studies at various places other than India are changing the educated class’s perception about India’s interaction with their countries.
  • Connectivity through inland waterways and expanding linkages to connect Indian railway lines to Kathmandu
  • Nepal needs to assuage India’s concerns about Chinese activities in Nepal.
  • Kathmandu should also keep an eye on illegal activities like human trafficking, black money dealings and terrorist intrusions which constitute a major security concern for the Indian establishment.
  • An open border, job opportunities for Nepalese youth in India and the Gorkha regiment position within the Indian Army remain pathways for rejuvenating relations.


  • Nepal and India enjoy excellent bilateral ties. Founded on the age-old connection of history, culture, tradition and religion, these relations are close, comprehensive and multidimensional and are pronounced more in political, social, cultural, religious and economic engagements with each other.
  • The unwavering commitment to the principles of peaceful coexistence, sovereign equality, and understanding of each other’s aspirations and sensitivities has been the firm foundation on which our bilateral relations have been growing further.
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