Indo-Nepal Relations

Fresh SSB batches starting 17th July. Referred articles were published in The Hindu.

"A friend is like a four-leaf clover; hard to find and lucky to have." — Irish Proverb 

Introduction 

India and Nepal share a unique and multifaceted relationship, characterized by deep-rooted historical, cultural, religious, and geographical ties. Their connection is marked by an open border policy, allowing free movement of people and goods, fostering strong people-to-people interactions.  

Historical Background 

The foundation of Indo-Nepal relations was laid with the Indo-Nepal Treaty of Peace and Friendship signed in 1950. This treaty established close strategic ties, allowing for free movement of people and goods, and fostering collaboration on defense and foreign policy matters.

Key Areas of Cooperation

1. Economic and Trade Relations:
   • Trade: India is Nepal's largest trading partner, accounting for a significant portion of Nepal's trade. 
   • Investment: Indian firms are among the largest investors in Nepal, contributing to various sectors including manufacturing, services, and infrastructure.
2. Energy Cooperation:
   • Hydropower Projects: Both countries collaborate on hydropower projects, with agreements facilitating power trade and development of new projects like the 480 MW Phukot Karnali and 669 MW Lower Arun. 
   • Electricity Trade: Nepal exports surplus electricity to India, enhancing energy cooperation and contributing to regional energy security. 
3. Defense and Security:
   • Military Cooperation: India assists in the modernization of the Nepalese Army by providing equipment and training. Joint military exercises and intelligence-sharing agreements are also part of the defense collaboration. 
   • Gorkha Regiments: Nepalese citizens serve in the Gorkha regiments of the Indian Army, reflecting deep military ties. 
4. Cultural and People-to-People Ties:
   • Religious Links: Shared heritage in Hinduism and Buddhism, with significant sites like Pashupatinath in Nepal and Varanasi in India, bolster cultural bonds. 
   • Open Borders: The open border policy facilitates familial, cultural, and economic interactions, strengthening bilateral relations. 

• Border Disputes: Territorial issues, such as those concerning Kalapani, Limpiyadhura, and Lipulekh, have occasionally strained relations. 
• Economic Blockades: Incidents like the 2015 blockade have impacted trade and fuel supplies, leading to humanitarian concerns and diplomatic tensions. 
• China's Growing Influence: Nepal's increasing engagement with China, including participation in the Belt and Road Initiative, presents strategic challenges for India.

• High-Level Visits: Regular exchanges, such as the visit of Nepal's Prime Minister to China in December 2024 to seek investment, indicate Nepal's efforts to diversify its international partnerships. 
• Hydropower Initiatives: Nepal and Bhutan are actively seeking Indian investments to enhance their hydroelectric power generation and export surplus electricity to India. 

• Diplomatic Engagement: Continuous dialogue to resolve border disputes and address mutual concerns is essential.
• Enhanced Connectivity: Investing in cross-border infrastructure like roads, railways, and energy grids can bolster economic ties.
• Balanced Foreign Policy: Nepal's engagement with both India and China should aim for regional stability and mutual benefit.

Indo-Nepal relations are deeply rooted in shared history and cultural ties. While challenges exist, proactive diplomacy, economic cooperation, and people-to-people interactions can further strengthen this enduring partnership.