India-Nepal Relationship

India-Nepal Relationship

Emerging India-Nepal Relationship

This article discusses “Daily current affairs for UPSC” about the India- Nepal relationship, Post Appointment of the new Prime minister. In GS-2 and the following content has relevance for UPSC.

For prelims: India- Nepal treaty of Peace and friendship 1950, Kalapani boundary issue

For mains: GS-2, India and its neighborhood

Why in news:

  • The next prime minister of Nepal, Pushpa Kamal Dahal, aka “Prachanda,” was sworn in.
  • The coming together of Communist forces represents a turning back of the clock for India because it is thought that Deuba’s predecessor, KP Sharma Oli, was pro-China.
  • Relationships between India and Nepal had deteriorated throughout Oli’s administrations in 2015–2016 and 2018–2021, but they had recovered since Deuba took office as prime minister in 2021.

Status of the India-Nepal Relationship

Areas of cooperation between the two countries

Trade and economics:

  • With bilateral trade exceeding USD 7 billion in FY 2019–20, India remained Nepal’s top trading partner. Nearly all of Nepal’s trade with third countries is transited through India.
  • Indian companies are among the biggest investors in Nepal, making up more than 33% of the country’s total stock of FDI, which is worth close to USD 500 million.

Defense Cooperation:

  • Through the provision of equipment and training, bilateral defense cooperation helps the Nepalese Army modernize.
  • The Indian Army’s Gorkha Regiments are partially staffed via recruiting in Nepal’s hill areas.
  • Since 2011, India and Nepal have participated in a joint military exercise called Surya Kiran.

On Humanitarian Grounds:

  • Nepal remains the largest beneficiary of India’s humanitarian aid due to its location in a fragile ecological zone where earthquakes and floods can cause significant damage to property and human lives.


  • Tibet, which has very little road connectivity, is open on one side of landlocked Nepal, which is also encircled by India on three sides.
  • In order to strengthen interpersonal connections and foster economic growth and development, India and Nepal have launched a number of connectivity initiatives.
  • Within the framework of trade and transit agreements, India is attempting to create inland canals for the flow of freight, giving Nepal more access to the sea under the name “connecting Sagarmatha (Mt. Everest) with Sagar” (Indian Ocean).

Multilateral Partnership:

  • Bangladesh, Bhutan, India, and Nepal (BBIN), the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Non-Aligned Movement, and the South Asian Association for Regional Cooperation are just a few of the multilateral forums that India and Nepal are members of.

Key Challenges of the India-Nepal Relationship

A. Territorial Issues:

  • The Kalapani boundary dispute is one of the major obstacles to improving relations between India and Nepal. These borders were established by the British in 1816, and in 1947, India took over the territory over which the British had exercised territorial sovereignty.
India Nepal Relationship

India-Nepal relationship

B. Issues with the Peace and Friendship Treaty:

  • In order to maintain the unique relations Nepal had with British India, as well as to grant them an open border and the ability to work in India, the Nepali government requested the 1950 Peace and Friendship Treaty in 1949.
  • Today, however, it is seen as a manifestation of an unequal relationship and an important by Indians.

C. China’s Intervention:

  • As Nepal veered away from India’s sway in recent years, China has progressively filled the void with investments, loans, and other forms of assistance.
  • China views Nepal as a crucial ally in the Belt and Road Initiative (BRI) and desires to invest in Nepal’s infrastructure as part of its broad aspirations to increase international trade.

D. Internal Security:

  • The Indo-Nepal border is essentially unguarded and is a major source of concern for India because it is used by terrorist organizations and rebel groups from the country’s North Eastern region to supply trained cadres and counterfeit money

E. Hydro-electricity:

  • Electricity from India is imported to Nepal via hydropower. It experiences power outages for a minimum of 16 hours each day. Nepal is hesitant to collaborate with India on electricity production.

F. Nepal complaints:

  • Nepal is in the seismic zone, and India aims to build large-scale dams. India demands a monopoly on the control of power. India insists that Nepal give India priority, but Nepal wants open tenders with other nations to get a better deal.

Way ahead:

  • In terms of the India-Nepal relationship, administrative cooperation, and political exchanges, India should be more proactive with Nepal.
  • Today, it is important to steer clear of territorial nationalism rhetoric and set the stage for a peaceful conversation in which both parties show compassion as they consider what is practical. For the neighborhood’s first policy to take hold, India must be a considerate and giving partner.
  • Territorial nationalism discourse needs to be avoided in today’s world. It has prepared the ground for a cordial discussion in which both parties demonstrate sympathy. They take practicality into account.
  • India must be a thoughtful and generous partner for the neighborhood’s first policy to succeed.
  • Nepal needs to pay more attention to the Bilateral Investment Promotion and Protection Agreement (BIPPA) that was signed between India and Nepal.
  • Power-sharing agreements were made between the government, India, and Nepal. These agreements cover cooperative development, marketing, infrastructure construction, and the installation of transmission lines.


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Plutus IAS current affairs eng med 29th Dec 2022

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