Nepal-India relations


Nepal and India enjoy excellent bilateral relations, and treasure very close, comprehensive and multidimensional relations since centuries. The relations are strengthened further by the age-old ties of history, culture, tradition and religion, and pronounced more in political, social, cultural, religious and economic dealings with each other. To add up the formal flavor to this historic relations, Nepal and India established diplomatic relations on 17 June 1947. The unfathomable commitment to the principles of peaceful coexistence, sovereign equality, and understanding of each other’s aspirations and interests have been the firm foundations on which the bilateral relations have been moving to a new height.

After India had achieved independence, Nepalese-Indian relation continued to based on the treaty which had been signed with government of British India in 1925. Beginning in 1950, however relations were based on two treaties under the Treaty of Peace and Friendship, ratified in July 1950,where each government agreed to acknowledge and respect the other’s sovereignty, territorial integrity, and independence; to continue diplomatic relations, and , on matters pertaining to industrial and economic development to grant rights equal to those of its own citizen to the nationals of the other residing in its territory. And an agreement governing both bilateral trade and trade transiting Indian soil.

The 1950 treaty and letters stated that “ neither government shall tolerate any threat to the security of the other by a foreign aggressor” and obligated both sides “to inform each other of any serious friction or misunderstandings with any neighboring state likely to cause any breach in the friendly relations subsisting between the two governments” These accords cemented a ‘special relationship’ between India and Nepal that granted Nepal preferential economic treatment and provided Nepalese in India the same economic and educational opportunities as Indian citizens.
 History saw a series of highs and lows in India-Nepal bilateral relations. In the 1970s, Nepal pressed for substantial amendments in its favour in the trade and transit treaty and openly criticized Sikkim’s merger with India, which it considered as part of Greater Nepal. India sponsored Nepal’s admission to the UNO in 1990. Bilateral relations with India got a further boost with an agreement to resume water talks after a four year hiatus

The unfathomable commitment to the principles of peaceful coexistence, sovereign equality and understanding of each other’s aspirations and interests have been the firm foundations of bilateral relations. Nepal avowed not to allow its territory to be misused by any inimical elements against India and also expects same sort of reciprocity and assurances from India. The open border between the two countries has been a unique paradigm of the political and geographical ties that rarely exists around the world. Such facilitation of movement of the people has increase more exchanges and interactions at the people to people level. Both countries have common approach and work in tandem in various International fora like the UNO, NAM and others.

The SAARC and BIMSTEC in South Asia opened up more avenues for enhancing regional cooperation have been identified to leap forward in this direction. It further strengthened during the deliberations between Indian President Pranab Mukharjee and Nepal President Ram Baran Yadav in the last week of December 2012. The recent visit by Nepal’s Chief of Army Staff Gaurav Shamsher Jang Bahadur Rana, on 4th October, 2013, included the series of joint Indo-Nepal Military exercises Surya Kiran which initially started at platoon level and were enhanced to battalion level in Pithoragarh in Uttarakhand. Surya Kiran is aimed at achieving tactical level understanding and interoperability between troops of both armies.

India had played a leading role in helping the Nepal Army (NA) in its modernization through provision of equipment and training. More than 250 training slots are provided every year for training of NA personnel in various Indian Army training institutions.

Border and Territorial Issues

The ruggedness of Nepal-China boundary is clearly revealed by its length which is 1415 kilometres, while Nepal-India boundary which runs along three sides of Nepal is only 1580 kilometers, 165 kilometers longer than Nepal-China boundary. The mountainous portions of the boundary lie in Sikkim State and Darjeeling district of West Bengal State in the east, while rest of the boundary runs along the plains in the south and along the Mahakali River in the west.

The Territorial disputes of India and Nepal include Kalapani-Limpiyadhura, Susta, Mechi River Area, Tanakpur, Sandakpur, Thori, etc. Kalapani is an area under territorial dispute in Darchula District, Nepal and Pithoragarh District of India.  The origin of Kali river is situated on the Kailash Mansarovar route, at an altitude of 3600 meters. It is said that the Great Sage Vyasa meditated at this place, giving the region its name — Vyasa valley, locally called Byans valley. A pool by the temple of the Goddess Kali is considered to be the source of the Kali River. A verdant valley covered with Pine, Bhojpatra and Juniper trees, it offers stunning views of some of the lesser known peaks like Om Parvat in the Central Himalayas Lipu Lekh leading into Tibet is 17 kilometers from Kalapaani. Susta is another area under territorial dispute currently in Tribenisusta, Nepal  and near Nichaul, Uttar Pradesh, India. The area under dispute totals over 14,000 hectares.

 Drug  Trafficking

India and Nepal have common border with Bhutan too. Hashish and marijuana/ganja are the two cannabis derivatives that have been traditionally trafficked from Nepal into India. Lately, a growing demand for Nepalese and Bhutanese cannabis in India and a corresponding demand for codeine based pharmaceutical preparations as well as low-grade heroin in Nepal and Bhutan have resulted in two way smuggling of narcotics and drugs through the India-Nepal and India-Bhutan borders. In 2009, about 16,589 kg of ganja smuggled from Nepal was seized in Uttar Pradesh. In the same year, 4,468 kg of Nepalese ganja was seized in Raxaul. In recent years, marijuana/ganja of Bhutanese origin has also started appearing in India.

Considering that India has been a transit hub as well as a destination for drug trafficking, emphasis has been laid upon ensuring the security of the borders by preventing the easy ingress and egress of the drug traffickers along with their consignments through the borders. In this respect, the most visible measure that was undertaken was the building of border fences and strengthening surveillance along the borders adequately. Personnel from several central organizations such as the Customs, the Directorate of Revenue Intelligence, the Narcotics Control Bureau, and the Central Bureau of Narcotics  as well as state organizations such as state police, state excise and state forest are also employed for the detection and apprehension of drug consignments along the borders.

Economic Relations  

Nepal has been pursuing a liberal foreign investment policy and striving to create an investment friendly environment to attract FDIs into the country. The few sectors that are not open to foreign investment are either reserved for national entrepreneurs in order to promote small local enterprises and protect indigenous skills and expertise or are restricted for national security reasons. Approval of the Government of Nepal is required for foreign investment in all sectors. No foreign investment is allowed in cottage industries. However, no restriction is placed on transfer of technology in cottage industries. 

Water resource is considered as the backbone of Nepalese economy, which has been of prominence in the agenda of relations. The flashflood and erratic behavior of the rivers caused huge loss of lives and properties during the monsoon. With a view to optimizing the benefits and addressing the problems, 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.

The hydropower potential of Nepal's rivers, based on average flow, has been estimated at 83,000 MW. The technical feasibility for development could yield an estimated 44,000 MW. Furthermore, the regional electrical grids, to which Nepal's surplus could be exported, are likely to benefit a lot from the development of prime sites at relatively low capacity factors. Seti, Tamakoshi, Upper Karnali, Arun and Budhi Gandaki are some ofthe hydel projects that have attracted interest of foreign investors. Preliminary studies have identified potential for over half a dozen medium and large hydroelectric projects which is off greatest value for Nepal from the perspective of exporting hydroelectric power to neighbouring countries.

 In addition to power generation, some of the identified projects can bring enormous benefits in terms of irrigation, flood control and inland navigation beyond the Nepalese territory as well. Typical of these projects is the Karnali (Chisapani) Multipurpose Project, with an estimated capacity of over 10,800 MW and the potential for providing navigation on the Ganges River in the Indian plains. Nepal encourages development of the enormous hydropower potential with financial and technical assistance from donor countries, multilateral agencies, local and foreign private investors.

Trade and commerce

India is Nepal’s largest trade partner, source of foreign investment and tourist arrivals. Bilateral trade between India and Nepal has received further impetus after the signing of the revised Trade Treaty in 2009 which has provisions that allow Nepal greater access to the Indian market. According to the figures for the Nepalese fiscal year (ending July 2012), bilateral trade with India stood at Rs.21812.8 crores which accounted for 65.1% of Nepalese total external trade. India and Nepal have a treaty of transit, which confers transit rights through each other’s territory through mutually agreed routes and modalities.

The Transit Treaty was renewed on 5 January 2013 for 7 years. The two countries have concluded a Rail Services Agreement (RSA) and a revised Air Services Agreement (ASA) to enhance bilateral connectivity. India also remains Nepal’s largest source of foreign investment and Indian investments in Nepal amount to Rs.2175.5 crores with 525 FDI projects. India accounts for 46% of the total foreign investments in Nepal. In October-November 2011 the two countries have also concluded the Bilateral Investment Protection & Promotion Agreement (BIPPA) and the Double Taxation Avoidance Agreement (DTAA) which provide legal framework for enhancing Indian investment into Nepal and further integrating the two economies.

Cultural Ties

Social and cultural ties have been enhanced by open border with no restrictions on the movement of people on either side. Social and cultural similarities do exist along the Nepal China boundary as well but more so in the case of Nepal India border where people have easier access and interaction. Ethnic and linguistic similarities exist along the Nepal-India border both in the south plains and hills in the east and west. The role of religious centres of pilgrimage for both Hindus and Buddhists in both countries has been responsible for strengthening the social and cultural bonds between the two countries. When health infrastructures in Nepal were not developed, a large number of people from the Terai as well as from the hills used to go to hospitals in India across the border.

Peoples in both countries share many languages. Such common languages include, inter alia, Nepali, Maithili, Bhojpuri, Hindi, Avadhi, etc. Sanskrit is the root of many of these languages, which is regarded as the language of the gods and saints. Nepal and India both use Devnagari script in writing Nepali, Hindi and many other common languages. Many a religious texts, including the Vedas, Upanishads, Puranas, Tripitak, are written in this script.


The arrests of two high profile terrorists, Adul Karim Tunda and Mohammed Ahmed Sidibappa alias Yasin Bhatkal have brought the India-Nepal border into sharp focus. The open border between India and Nepal  has been misused by terrorists and criminals since long. Activities like giving a slip to the police and the Interpol, smuggling, infiltration, smuggling, circulating fake Indian currency, drug and human trafficking have been on the rise.

Policymakers in India have taken note of the deteriorating security situation along the India-Nepal border and have undertaken a number of measures in response. For instance, the presence of the Sashastra Seema Bal (SSB) along the Indo-Nepal border has been further augmented with the construction of five additional Border Out Posts (BOPs).

For addressing the twin objectives of security and trade facilitation, two integrated check posts with state of the art detection and screening devices as well as support facilities are being constructed at Raxual and Jogbani. India has also been seeking Nepal’s cooperation in managing the border through several bilateral mechanisms. However, domestic political turmoil, lack of political will and resource crunch have so far prevented Nepal from effectively cooperating with India.

Tuesday, 25th Mar 2014, 07:39:10 PM

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