India-Nepal relations

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Nepal has protested against the inauguration of a Himalayan link road built in a disputed territory by India that falls at a strategic three-way junction with Tibet and China. India’s defence minister, Rajnath Singh, inaugurated the 80-kilometer (50-mile) Lipulekh road, the shortest route between the capital New Delhi and the revered Hindu pilgrimage site on the Tibetan plateau, Kailash-Mansarovar. The link road via Lipulekh Himalayan Pass is also considered one of the shortest and most feasible trade routes between India and China. In a statement by Nepal’s foreign ministry the act of India was termed as “unilateral act” that “runs against the understanding reached between the two countries and that a solution to boundary issues would be sought through negotiations.”

It was called a “historic” achievement by the defence minister that he opened the path via video conference. The new road is also expected to provide Indian traders with better access to the India-China border trade at the Lipu Lekh Pass every summer from June to September. The government has underlined that through this improved route, yatris do not need the alternative routes now available for the pilgrimage, one through the Nathu La border in Sikkim and the other via Nepal, which entailed “ 20 per cent land journeys on Indian roads and 80 per cent land journeys in China … the ratio has been reversed. Now pilgrims to Mansarovar will traverse 84 per cent land journeys on Indian roads and only 16 per cent in China .”

Significance of this development

Building roads leading to the disputed LAC with China has been a contentious exercise for the Indian government. The India China Border Roads as they are known, were conceptualised in the late 1990s by a consultative group called the China Studies Group, approved at the highest level of the Cabinet Committee on Defence, and provided the go-ahead for construction in 1999. Yet the deadlines were movable targets, and it was only in the midst of the 70-day Doklam stand-off with China in 2017, that India realised with surprise that most of those roads had remained on the drawing board. For all those years, only 22 had been completed.

The Standing Committee on Defence, in its 2017-2018 report, noted that “ the country, being surrounded by some difficult neighbours, with a view to keeping pace, construction of roads and creation of adequate infrastructure along the borders is a vital necessity. The parliamentary committee recommended a higher budgetary allocation for the BRO. Another report on border roads, submitted by the Standing Committee in March 2019, marked the ICBRs as a key element in “ effective border management, protection and construction of infrastructure in inaccessible areas bordering the China Border ”.

India-Nepal relations

In this phase India has tried to normalize its relations with Nepal again after when the monarchy system is demolished in 2008. These two countries witnessed high level of exchanges between them. India is the largest foreign investor on Nepal .and have a significant role in Nepal economy. India is currently helping a lot to Nepal providing aid and developing infrastructure with the extension of $1 billion. These aid and development also include military aid. Nepal prime minister has recently visited India and signed agreements focusing on improving of infrastructure and aiding to earthquake victims’ post-earthquake reconstructions border security and hydropower development.

When Nepal was hit by a devastating earthquake of 7.8 magnitude in 2015April25 followed by a powerful after shock in 12May2015 of 7.4 magnitude. The first move that government of India has taken was dispersion of National Disaster Response Force (NDRF). With rescue and important materials this relief has arrived in Nepal after 6 hours of earthquake. India also has helped Nepal in restoring three power sub-stations in Kathmandu. The relief was amounted to over US$67 million.

The largest investors in Nepalese market are Indian firms. Accounting for about 30% of the total foreign direct investments of the country. The total investments of the Indian firms in Nepalese market is (INR-5942.68 crores). About 150 Indian ventures are operating in Nepal now engaged in various sectors like banking, insurance, dry port, education, telecommunication etc. Mutual understanding on water resources is one of the key prospects of bilateral diplomacy. There was a large number of rivers that flow from Nepal to India. These small flowing rivers have power to become the major source of irrigation and power for both these countries. A 3-tier bilateral mechanism was established in 2008 to concentrate on key areas of water management, flood management, and hydropower related issues between Nepal and India.

Historical background of relations

The start of bilateral diplomatic relationship between Nepal and India can be traced back from 1950 peace and friendship treaty. Articles 5,6,7 of the treaty were the key articles in 1950 peace and friendship treaty. Article 5- allowed Nepal access to weaponry from India. Article 6- Says that national treatment for both Indian and Nepalese business (i.e. if once imported, foreign goods would be treated no differently than domestic goods). Article 7-says about reciprocal treatment of Indian and Nepali citizens in these two countries.

In 1950 the treaty of trade and commerce was signed between these two countries. Which has also helped in strengthening of trade bond between these two countries. Not only there was a improvement in trade policies. But also, customs duties and trade regulations between these two countries were made narrower resulting to increase in trade between India and Nepal.

1960 has been a golden year for Nepal as Nepal has balanced its relations with both India and China. By this time the trade and commerce between India and Nepal has achieved a new height of glory. In 1960 another PEACE and FRIENDSHIP TREATY was signed with china. However, in the long journey of relationship between these two countries there were many more treaties signed. In 1965 a secret agreement is signed between these two countries. According to this agreement Nepal is allowed to import arms only from India. However, in 1969 this treaty was cancelled by Nepal also a call was made to remove Indian military personnel from Nepal.

1978 has also saw a great amount of joint investments between Indian and Nepalese co-operates and firms. That was also marked as a great year of business between these two countries. the turning point come in 1989, when failure to negotiate a new trade policy and purchase of weapons from china which leads to the expiration of main trade and transit of goods treaties between these two countries, which had placed a big blind spot in Nepal economy.

Major agreements between India and Nepal

India has been assisting Nepal since many years. This assistance is given for cross border road development, infrastructure, health, and education development. The total economic help provided by India in financial year 2017-2018 is Rs.375 crore. Which was increased by 73% in the financial year 2018-2019. More than 559 projects including small scale and large-scale projects of cost NPR-76 billion have implemented in Nepal by India since 1951. Till now approximately 692 ambulances, 140 school buses have been allotted in 77 districts of Nepal. Except from this assistance a credit of (USD-1.65 billion) has been granted for infrastructural development and post-earth quake assistance.

Both countries have a great cooperation in field of defence. India has always been supporting to Nepalese Army (NA) by providing training and supplying required equipment’s. joint military trainings, bilateral visit by army staffs shows how strong the defence cooperation between these two countries are. The Indo-Nepal joint military exercise SURYA KIRAN Is conducted twice a year between both the armies.

Critical analysis

It can be stated that through the lapse of time there was no change in diplomatic relationship and structure between these two countries. However, since years the relationship between these two countries is improving and there was no major change in relationship Between these two countries. There were many situations of odds between these two countries. Like blockage by India. And also, there were many falls in the relationship between these two countries. But also, major change in relationship is not heard. However, these changes in day to day diplomatic process between Nepal and India does not have a major impact in its diplomatic process.

Landlocked between two major regional powers, the quick readthrough of Nepal’s ties with India and China shows that not being overly dependent on either India or China is a crucial aspect of Nepal’s foreign policy. Strategically, it makes sense for Nepal to balance between India and China, as being landlocked hinders Nepal’s opportunity to trade with the rest of the world freely and being overly reliant on either nation would only lead to potential problems if either country withdrew their support. The bilateral diplomatic process between these two countries is good. But yes, need certain improvements like-1. The diplomatic process should be such that it does not affect the subject population. 2. there is a lack of information in the grassroot level of Nepal about India.

Probable future

People should also be made aware about the aids, funds and facilities so that the corruption should also be minimized and peoples of Nepal should be made aware about what help their neighbour is giving. The latest developments hence, suggest no diversion from this historical status quo and future talks between India and Nepal should be expected. There are numerous treaties and agreements such as the PFT, Trade and Transit Treaties, Arms Assistance Agreement, etc. between the two neighbours. The current dispute must be solved mutually, believing the universal truth that neighbours can never be changed. The suffering of neighbours shall affect all, owing to the world’s liberal trend towards global citizenship, or citizenship without frontiers.


In conclusion, following suggestions could be made for strengthening the relationship between the two neighbours:

  • Both the countries are affected due to the abuse of open border by internal and external powers, the duty of border protection and control 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.
  • India should preserve the policy of keeping away from internal affairs of Nepal, meanwhile in the spirit of friendship India should steer 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.

Author: Nipun Kalra from National Law University, Delhi.

Editor: Dhawal Srivastava from Rajiv Gandhi National University of Law, Patiala.


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