India-Nepal Relations

India-Nepal Relations: A Look At The Past And Present

Recently, Pushpa Kamal Dahal “Prachanda” was sworn in as Nepal’s New Prime Minister after switching sides and joining hands with former Prime Minister KP Sharma Oli, who is viewed as pro-China by India.

Areas of Cooperation between India and Nepal

• Defence : India is helping the Nepalese army to modernise and improve interoperability through military exercises like Surya Kiran
• Connectivity : BBIN and Raxal Kathmandu Railway Project
• Energy : Cross-border oil products products pipeline from Motihari, Bihar to Amlekhganj, Nepal. Hydroelectric project in Solu corridor and power exchange agreement to meet energy needs in border regions.
• Trade and Economy : India is Nepal’s largest trade partner, reaching trade over $7 billion by 2019-20. India also facilitates transit for almost all of Nepal’s third-country trade.
• Education : India offers scholarship to Nepalese students in Indian universities.
• Water resources : Mahakali Treaty and Koshi Treaty to discuss issues related to water resources cooperation and flood management.
• Multilateral Partnership : India and Nepal are members of several multilateral forums including BBIN, BIMSTEC, Non-Aligned Movement, and SAARC.
• Culture : Strong historical and cultural ties in terms of religion, cuisine, language, movie etc. (Roti-Beti ka Nata)

Challenges in India-Nepal Relations

• China’s rising influence in Nepal’s politics, economy and society affecting India’s traditionally dominant influence.
  • Nepal has joined China’s Belt and Road Initiative (BRI).
  • Significant amount of Anti-India sentiments in Nepal.
• Territorial Dispute : Nepal’s aggressive stand over Kalapani border issue.
• Distrust toward India : There is a lack of trust towards India due to its perceived “big brother” attitude and failure to revisit the 1950 Treaty of Peace and Friendship.
• Nepal’s discontent in bilateral trade due to significant trade deficit it incurs.
• Internal Security : India is concerned about the virtually open Indo-Nepal border, which is exploited by terrorist and insurgent groups from North-Eastern India. For example; for training and fake currency smuggling.

Significance of Political stability of Nepal for India

• Strategic importance of Nepal as it acts as a natural buffer between India and Nepal.
• Internal Security of India : Harmonious relations is necessary to curb terrorist and maoist groups having Nepal as their base.
• Security of India-supported development projects like cross-border railways and the Pancheshwar multi-purpose project etc.
• People-to-people connection and empowerment of Madhesis people to prevent political consequences for India.

Way Forward in India-Nepal Relations

• Emphasis on establishing multimodal connectivity between India and Nepal.
• Establish appropriate bilateral mechanism to solve contentious issues like boundary issues.
• Multilateral Platforms such as BIMSTEC, NAM, SAARC, BBIN etc should be utilised to serve common interest.
• Continuous engagement and limited interference within political sphere of Nepal.
• Further strengthen economic cooperation.
• Revisiting 1950 Peace and Friendship Treaty as suggested by Eminent Persons’ Group setup jointly by India and Nepal.

India’s long-term interests in Nepal are best served by a stable multi-party democracy and economic prosperity in Nepal, which can be achieved through promoting interdependence between the two countries.