India–Nepal Relations: Cooperation, Challenges & Way Forward

India and Nepal share one of South Asia’s most unique bilateral relationships, rooted in geography, history, culture, religion, and people-to-people interactions. The two countries maintain an open border of approximately 1,751 km, facilitating the free movement of people, goods, and services. The relationship is often described as a “Roti-Beti” relationship due to deep familial and cultural ties.
For India, Nepal occupies a vital place in its Neighbourhood First Policy, while for Nepal, India remains its largest trading partner, major development partner, and a crucial transit route to global markets.

Background and Historical Evolution of Relations:

1. Ancient and Civilizational Ties:
   • Shared heritage of Hinduism and Buddhism.
   • Janakpur in Nepal is associated with Goddess Sita, while Lumbini is the birthplace of Lord Buddha.
   • Centuries-old pilgrimage routes strengthened social and cultural interactions.
2. Colonial Period:
   • The Anglo-Nepal War (1814–1816) culminated in the Treaty of Sugauli (1816).
   • The treaty defined much of the modern boundary between the two countries.
3. Post-Independence Phase:
   • 1950 Treaty of Peace and Friendship
   The treaty institutionalized bilateral relations by providing:
   • Reciprocal treatment to citizens regarding residence and economic activity.
   • Free movement across borders.
   • Security consultations.
   It remains the cornerstone of bilateral relations.
4. Democratic Transition in Nepal:
   • India supported Nepal’s transition from monarchy to democracy.
   • Nepal became a Federal Democratic Republic in 2008.
5. Contemporary Phase:
   Relations have witnessed both cooperation and friction:
   • 2015 Constitution controversy and Madhesi protests.
   • Perception of an unofficial blockade by India.
   • Border disputes involving Lipulekh, Limpiyadhura, Kalapani.
   • Growing Chinese presence in Nepal.
   • Renewed emphasis on connectivity and energy cooperation.

India–Nepal relations have evolved from a predominantly security-centric framework to a multidimensional partnership encompassing trade, energy, connectivity, development, and people-to-people engagement.

Areas of Cooperation:

1. Political and Diplomatic Cooperation:
   • Regular high-level visits.
   • Joint commissions and institutional dialogue mechanisms.
   • Cooperation under India’s Neighbourhood First Policy.
2. Economic and Trade Relations:
   • India is Nepal’s largest trading partner.
   • Nepal depends heavily on Indian ports for overseas trade.
   • Bilateral trade has expanded significantly over the years.
3. Connectivity Initiatives:
   Projects include:
   • Jaynagar–Kurtha railway.
   • Integrated Check Posts.
   • Cross-border transmission lines.
   • Road connectivity projects.
4. Energy Cooperation:
   • Nepal possesses enormous hydropower potential.
   • India imports electricity from Nepal.
   • Joint development of hydropower projects strengthens energy security.
5. Defense and Security Cooperation:
   • Joint military exercise: Surya Kiran.
   • Recruitment of Nepali citizens into Gorkha Regiments.
   • Intelligence sharing and border management.
6. Development Partnership:
   India assists Nepal through:
   • Schools and hospitals.
   • Community development projects.
   • Post-earthquake reconstruction.
   • Capacity-building programmes.
7. People-to-People Relations:
   • Open border facilitating mobility.
   • Educational exchanges.
   • Pilgrimage tourism.
   • Inter-marriages and familial ties.
   • “Roti-Beti Ka Rishta”

Challenges in India–Nepal Relations:

1. Boundary Disputes: Disputed regions include:
   • Kalapani
   • Lipulekh
   • Limpiyadhura
   • Susta
   The western disputes (Kalapani, Lipulekh, Limpiyadhura) stem from differing interpretations of the Sugauli Treaty. The Susta dispute, however, primarily stems from the shifting course of the Gandak River.

1. Treaty Revision Demands:
   Many sections within Nepal consider the 1950 Treaty unequal and seek revision to reflect contemporary realities.
2. Anti-India Sentiment and “Big Brother” Perception:
   • Concerns regarding excessive Indian influence.
   • Political narratives occasionally exploit nationalist sentiments.
3. China’s Growing Influence:
   • Expanding Chinese investments and infrastructure projects.
   • Nepal’s balancing strategy between India and China poses strategic concerns.
4. Open Border Challenges: The porous border facilitates:
   Smuggling, Human trafficking, Fake currency circulation, Cross-border criminal activities.
5. Madhesi Issue:
   India’s support for inclusive constitutional arrangements in Nepal has sometimes been viewed as interference in domestic affairs.
6. Implementation Deficit:
   Several bilateral agreements suffer from delays and bureaucratic hurdles.

Way Forward:

1. Adopt a Partnership of Equals:
   • Respect Nepal’s sovereignty and sensitivities.
   • Move away from perceptions of asymmetry.
2. Review and Modernize the 1950 Treaty:
   • Undertake mutually acceptable revisions.
   • Reflect present geopolitical and economic realities.
3. Resolve Boundary Issues Through Dialogue:
   • Activate diplomatic mechanisms.
   • Avoid politicization of disputes.
4. Deepen Connectivity:
   • Accelerate rail, road, and digital projects.
   • Enhance cross-border infrastructure.
5. Expand Energy Cooperation:
   • Promote long-term power trade agreements.
   • Develop Nepal’s hydropower potential sustainably.
6. Strengthen Border Management:
   • Use technology-driven surveillance.
   • Enhance coordination between security agencies.
7. Enhance People-Centric Diplomacy:
   • Educational scholarships.
   • Cultural exchanges.
   • Tourism promotion.
   • Youth engagement initiatives.
8. Promote Sub-Regional Cooperation:
   • Utilize platforms such as BBIN and BIMSTEC for mutual growth.

Conclusion:

India–Nepal relations are founded on an exceptional blend of civilizational affinity, geographic proximity and strategic interdependence. While contemporary challenges such as border disputes, treaty concerns, and geopolitical competition have introduced strains, the enduring strength of people-to-people ties continues to provide resilience to the relationship.
A future built on mutual respect, sensitivity to each other’s interests, and shared prosperity can transform this age-old partnership into a model of neighbourhood cooperation in South Asia.

Practice Questions:

Question 1 With reference to the India-Nepal power sector cooperation, consider the following statements:

1. The Arun-III Hydroelectric Project is a storage-type project being developed by the Nepal Electricity Authority (NEA) independently.
2. India and Nepal have signed a long-term Power Trade Agreement targeting the export of 10,000 MW of electricity from Nepal to India over the next decade.
3. Nepal is the first country to use India’s “Cross-Border Trade in Electricity” (CBTE) regulations to sell power in the Indian Day-Ahead Market.
   Which of the statements given above is/are correct?
   (a) 1 and 2 only
   (b) 2 and 3 only
   (c) 3 only
   (d) 1, 2, and 3
   Answer: (b)

Question 2 Consider the following statements regarding the geographical and institutional framework of India-Nepal relations:

1. The Mechi River forms a part of the eastern boundary between India and Nepal.
2. The 1950 Treaty of Peace and Friendship allows Nepali citizens to work in Indian government services (except for the IFS, IAS, and IPS).
3. The “Eminent Persons Group” (EPG) was a joint mechanism formed to review and suggest updates to existing bilateral treaties, including the 1950 Treaty.
   How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None
   Answer: (c)

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