India-Nepal relations

Nepal is the world’s 45th-biggest country in the world, with a population of 29 million people. Thus, if only for its size, Nepal is too big a nation-state to be a vassal. The country takes pride in its history of never having been colonized and has an important geostrategic position, with India and China on either side. However, contrary to conventional notions of a harmonious diplomatic relationship, there is a sharp difference in the way Nepal and India view each other.



  • The relation between India and Nepal goes back to the times of rule of the Sakya clan and Gautama Buddha. Initially, Nepal was under tribal rule and only with the coming of Licchavi rule in Nepal did its feudal era truly begin.
  • From 750 to 1750 AD period saw a shift from Buddhism to Hinduism in Nepal and witnessed widespread cultural diffusion.
  • The early 1700s witnessed a change in the Nepalese power structure. The subsequent period witnesses both monarchical and prime ministerial rule. There established a dynastic rule for the Prime Minister, known as the “Rana”.
  • The Rana rule took hold and continued in Nepal till 1951.
  • In the 1920s, as the Indian freedom struggle progressed, many educated Nepalese people came to India and partook in the struggle. This gave the Nepalese elite an insight into nonviolent struggle.
  • The Nepali elite subsequently launched a movement in Nepal and succeeded in ousting the Rana rule.
  • The most instrumental role in this movement was played by the Nepali Congress (NC).

  • In 1951, after the ousting of the Rana rule, the monarchy continued to dominate Nepalese politics. Nepali Congress party won and the NC struggle to control Nepal.
  • In 1959, King declared NC as corrupt, removed it from power and subsequently installed a party-less Panchayat system.
  • In 1994, the Unified Marxist Leninist Party (UML) tried to generate an anti-India feeling in Nepal. The UML began to assert that the NC is in reality controlled by Congress party of India. This led to a perception amongst the Nepali people about India’s control and interference over Nepal and its internal affairs through the NC.
  • The anti-India plan worked in favour of UML and they succeeded in capturing power for a short period of 9 months in Nepal.
  • The UML was removed and the NC assumed power again in 1994. The subsequent period not only saw civil unrest.
  • The civil unrest, over a period of time, evolved into civil uprising and took an ideological turn to Maoism. The Maoist movement in Nepal became fully manifested by 2005.
  • An interim constitution was prepared in 2007.
  • Nepal would establish the new constitution by 2010. However, by 2010, the constitution was not ready but delayed.
  • After tremendous delays, Nepal finally accepted a constitution in September 2015.

Madhesis are people living in South of Nepal in the region of Terai. They are people living close to the border of India.

The Madhesis have always been discriminated against by Pahadis or the people living in the upper reaches of Nepal.

In fact, the discrimination against Madhesis at one point of time, was so intense by Pahadis that if a Madhesi citizen wanted to visit Kathmandu, they had to apply for a permit.

The Madhesis, through their representation, demanded rights in the new constitution.

  • Indian leadership is conscious of the self-respect and pride of the Nepalese people. Jawaharlal Nehru wrote in “The Discovery of India” and also in “Glimpses of World History” that Nepal has been the only truly independent country of South Asia.
  • Nepal responded to India’s needs as a friendly neighbor in the past. Its political leaders contributed to India’s struggle for freedom.
  • People-to-people relationship between India and Nepal is unmatched.
  • Even in the remotest corners of India, Nepalese enjoy good will. There is nobody in India that wishes ill for Nepal.
  • The comments of the Army Chief that, Nepal is acting at someone else’s behest is unwarranted.
  • Both the countries have an established mechanism to deal with the boundary matters.


  • Nepal is dependent on India for transit to the Seas. It is completely dependent on India for transit rights.
  • The misunderstanding created during the constitution framing / Madhesi agitation changed the entire gamut of relations between India and Nepal.
  • During his visit to China in 2016, Mr.Oli, the Prime Minister of Nepal managed to push the agenda of trade and transit agreement with China, on the lines of special agreements with India.
  • Nepal will be connected with China through a railway network, in addition to roads.
  • Transmission lines will connect the two countries. It provides Nepal a much needed alternative to sell excess power.
  • Rail and road networks will also provide Nepal an alternative for petroleum products.
  • Relationship took a beating in 2015, when India first got blamed for interfering in the Constitution drafting in Nepal.
  • India was also blamed for an “unofficial blockade” in the Madhesis issue, this generated widespread resentment against the country.
  • The politicians in Nepal exploited Nepali Nationalism and anti-Indianism successfully.
  • China seized the opportunity- In the past, China maintained a link with the Palace and its concerns were primarily related to keeping tabs on the Tibetan refugee community.
  • Now, that the monarchy is abolished, China has shifted its attention to the political parties, as well as institutions like the Army and Armed Police Force.
  • Today, China’s foreign policy is more assertive and China considers Nepal as an important element in its ever expanding footprint.

Recently, Nepal unveiled a new political map that claimed strategically important land Kalapani, Limpiyadhura and Lipulekh of Uttarakhand as part of its sovereign territory.

India Nepal Border

India and Nepal share an approximately an 1,800- kilometer long open border running along West Bengal, Uttar Pradesh, Bihar and Sikkim.

It was after the Peace and Friendship Treaty of 1950 that the two countries encouraged a well-identified and formally accepted “open border” between them.

An “open border” means that there is free and unrestricted movement of people from either side. Open border has led to better social and trade connectivity between the two countries leading to what is called ‘roti-beti karishta’.

India-nepal border


  • The Survey of India issued a new political map (eighth edition) on November 2, 2019: this is to reflect the change in the status of Jammu and Kashmir into two Union Territories.
  • Nepal registered a protest, though the map in no way had changed the boundary between India and Nepal.
  • On November 8, the ninth edition was issued and the delineation remained identical, but, the name Kali River has been deleted. This led to stronger protests in Nepal.
  • Constitution second amendment bill by Nepal will change the Schedule 3 of the Nepalese Constitution and replace the existing map with the disputed map.
  • The new map depicts the strategically important land covering Limpiyadhura, Lipulekh, and Kalapani as part of Nepal.
  • The new alignment adds 335 sq km to Nepali territory, a territory that has never been reflected in a Nepal map for nearly 170 years.
  • The disagreements between India and Nepal over the border dispute are over the regions which include Kalapani, Lipulekh, Limpiyadhura (all three in Uttarakhand) and Susta (Bihar).

Origin to the boundary dispute

  • Before the 1816 Treaty of Sugauli, the Nepalese kingdom stretched from the Sutlej river in the west to the Teesta river in the east. Nepal lost the Anglo-Nepalese War.
  • The resulting Treaty limited Nepal to its present territories.
  • The Sugauli Treaty was between the Rajah of Nepal and the East India Company.
  • The Rajah of Nepal, his heirs, and successors, renounce the claims towards the west of the River Kali.
  • Under the provisions of the Sugauli Treaty, Nepal lost Sikkim, Kumaon, Garhwal and Western Terai (Flat) area.
  • River Mechi became the eastern border with India while the river Kali (called Mahakali in Nepal) was demarcated as the north-western border.
  • The Treaty of Sagauli also defined Gandak as the international boundary between India and Nepal.
  • The Treaty established Mahakali River as a dividing line in the Western sector.

After Independence, India continued with the tradition of an open border and it was noted under the Indo–Nepal Friendship Treaty of 1950.

Main issue

The main issue related to the border management between India and Nepal is that the borders have been demarcated on the basis of a flowing river.

The problem is that the rivers shift their courses over a period of time. This impacts the border which gets affected due to shifting rivers.

Nepal considers the source of Kali river near Limpiyadhura, which is higher in altitude than the rest of the river’s flow. Thus, all the three areas Limpiyadhura, Lipulekh and Kalapani are considered to the east of the river Kali.



  • Kalapani area is the largest territorial dispute between Nepal and India.
  • It is located in the easternmost corner of Uttarakhand Pithoragarh district.
  • It is a tri-junction between India, China and Nepal which is of strategic significance in South Asian diplomacy.
  • As per the treaty, Kali River is designated as the western part of the boundary. In between the two streams of the Kali River lies Kalapani. The issue arises as the segments to the West of Kalapani of Kali River are claimed by Nepal while India claims segments to the East of Kalapani of Kali river area, thereby making a claim to entire Kalapani. In the 1962 Indo–China war, Kalapani was occupied by Indian forces and India considers it strategically important.



Susta in Bihar is on the banks of River Gandak. The changing course of River Gandak often created issue between two countries.


Lipulekh pass

The Lipulekh pass is a far western point near Kalapani, a disputed border area between Nepal and India. There is Protest against the construction of a key road connecting the Lipulekh pass with Dharchula in Uttarakhand. 80-Km new road inaugurated is expected to help pilgrims visiting Kailash-Mansarovar in Tibet in China as it is around 90 kms from the Lipulekh pass.


Issue wasn’t there till 1996

In 1953, India and China identified Lipulekh Pass for both pilgrims and border trade.

After the 1962 war, pilgrimage through Lipulekh resumed in 1981, and border trade, in 1991.

In 1960s / 1970s, India and Nepal showed Kalapani as the origin of Kali river.

After 1979, Indo-Tibetan Border Police has manned the Lipulekh Pass.

After the 1996 Treaty of Mahakali, which envisaged the Pancheshwar multipurpose hydel project, the issue of the origin of Kali River came to the forefront.



  • India says, the Lipulekh pass has always been a part of the road to Tibet.
  • It was mentioned as one of the border passes for trade in a 1954 agreement with China. This was also reaffirmed in another trade agreement in 2015.
  • Since 1981, when China reopened Kailash-Mansarovar pilgrimage route for Indians, this route is being used and pilgrims walk into Tibet through this route. The road built now follows the same alignment.
  • It would essentially cut down the travel time by three days each way.
  • It is the area controlled by ITBP, which has a post there since 1962.
  • The border begins at Kalapani which India says is where the river begins.
  • Kali originates in springs well below the Lipulekh pass, and the Sugauli treaty does not demarcate the area north of these streams.
  • India has controlled this territory since 1950s and built other infrastructure here before, besides conducting its administration and deploying military forces up to the border pass with China.


Challenges in settling border dispute:

  • China factor: China opening port facilities to Nepal and providing access to Trans Himalayan Railway reduces Nepal’s dependency on India and reduces the leverage that India has with the Nepal to settle the dispute.
  • Interpretation of the boundary: The dispute is mainly because of the varying interpretation of the origin of the river and its various tributaries that slice through the mountains.
  • Big Brotherly attitude: India’s Big Brotherly attitude towards Nepal has created a sense of insecurity in the Nepalese government and its citizens and any settlement would be seen as a weakness.
  • Nepal internal politics: deeply divided and unstable democracy.

India and Nepal, on 31st July, 1950, signed a Treaty of Friendship and Peace. Seven decades later, clamour is now growing louder in Nepal to “revise” the pact to reflect “new changes and realities”. The call for revision was once again raised during the India-Nepal Joint Commission Meeting held this year. This came nearly seven years after both sides agreed to “review, adjust and update” the Treaty of Peace and Friendship of 1950, during Prime Minister first visit to Nepal in 2014.


Features of the treaty

  • This treaty acts as the bedrock of the relation between the two nations. The treaty extends mutual peace, friendship and sovereignty to each other while it accepts non-interference in each other’s territory.
  • As per the treaty, Nepal would consult India whenever they undertake any arms imports from any nation other than India.
  • The treaty lets the nations extend national treatment to each other.
  • The national treatment clause also extends for industrial and economic development.
  • Citizens are empowered to the same privileges for property, trade and residence and movement in both countries. That means, a Nepali
  • Citizen can buy property in India while and Indian citizen can do so in Nepal
  • an Indian citizen can reside anywhere in Nepal and a Nepali citizen too enjoys the right to residence in India under national treatment.
  • Another important point of the treaty is open borders. As per this point, Indian citizens can move to Nepal without the need of a visa and vice versa.
  • As per the treaty, either party can ask for a change in the treaty whenever demanded.


Critical Issues in Indo–Nepal Treaty

  • The Treaty favours Nepal more than India, but Nepal still has certain issues with it.
  • Nepal initially complained that when the treaty was concluded in 1950, India concluded the treaty with a Rana ruler. Nepal alleges that India signed the treaty with the Rana who had become unpopular.
  • Certain sections in Nepal also alleged that the way treaty was signed signified that India considered Nepal as a small state and not an equal state.
  • The fact that the treaty was signed on India’s behalf by someone who was in lesser designation compared to the Prime Minister of Nepal was seen by Kathmanduas an insult and disrespect for protocol.
  • Besides, Nepal has always had reservations with Articles 2, 6 and 7 of the treaty. Article 2 states that both governments should “inform each other of any serious friction or misunderstanding with any neighbouring State likely to cause any breach in the friendly relations subsisting between the two Governments”.
  • Articles 6 and 7 stipulate India and Nepal will give the same privileges of economic activity, employment, resident and ownership of property to each other’s nationals in their territory.
  • In 1994, the UML had successfully generated an anti-India plank in the election. Since then, raising anti-India slogans and alleging that the Indo–Nepal Treaty of 1950 favours India more than Nepal has become a norm for gaining political mileage.
  • Many times, Nepali political parties have demanded a change in the treaty.
  • Whenever Nepal has asked for a change in the treaty, India has accepted the Nepali request, but, absence of consensus in Nepal on issues that need revision prevents any meaningful engagement about the issue. This demand for revision of the treaty was recently also raised during Indian the PM’s visit to Nepal in 2014.
  • India was seen interfering in the internal political matters of Nepal by brokering its first steps towards achieving democracy with the ousting of the autocratic Rana regime and restoring the monarchy.
  • Nepal was also questioned, for establishing defence ties with its northern neighbor China.
  • Matters only got worse during a stiff economic blockade between India and Nepal due to the agitation by the Madhesi population there over Nepal’s Constitution promulgated in 2015.
  • The blockade led to the restriction of food and essential supplies from India to Nepal and New Delhi was blamedfor steering the agitation.



  • Under his ‘Gujral Doctrine’, former Prime Minister I.K. Gujral assured all neighbours including Nepal that New Delhi will not interfere in their internal matters.
  • In August 1997, India and Nepal held a round of discussions to review the treaty keeping in mind Nepal’s growing resentment but it was never taken further by successive Indian governments until PM Modi promised to look into the matter during his Kathmandu visit in 2014. no formal steps have been taken to review it.
  • “The issue needs to be discussed keeping all stakeholders in mind and not just by a few who are aiming to do this for narrow political gains.”


India often faces criticism from its immediate neighbourhood that it holds the development projects but does not deliver on time. There was suggestion, India to speed up the development projects in Nepal in the face of growing Chinese influence.

However, in the last couple of years, India’s image of not completing projects on time has gradually changed with completion of few vital projects. The joint projects are showing welcome signs of professionalism.


Weakness in Indian infrastructure projects

The Mahakali agreement has remained in limbo for over two decades.

In 2008, the collapse of Koshi’s embankment unleashed massive flooding, highlighting India’s failure to take precautionary measures and its refusal to take responsibility.

Many joint projects are still mired with bureaucratic hurdles, the non-operational railway line from Janakpur in Nepal to Jaynagar, India.

Hydropower projects funded by India did not make much progress in the last two decades in Nepal due to various reasons. Arun-3 project was one of the much-talked and pending issues since 1990s.


Progress in infrastructure projects

Improving the connectivity between the two countries, in implementation mode. Noticeably, the Nepalese Prime Ministers’ India visits are known to majorly include issues of pending projects in communiqués.


Energy sector

  • In the last couple of years, there have been some visible progresses in hydropower projects. For instance, Arun-3 hydro-electricity projects have gained momentum.
  • When it comes to energy cooperation, two countries have already agreed to go for energy banking concept and two sides are working to operationalize it. According to this concept, Nepal will export power to India during the summer season which exceeds imports during the dry season.
  • One of the remarkable projects completed before the stipulated time framework is cross-border petroleum pipeline.


Motihari-Amalekhgunj petroleum pipeline
  •  In September 2019, inaugurated the Motihari-Amalekhgunj petroleum pipeline, first of its kind in South Asia.
  • The 69-km pipeline is reducing the cost of transportation of fuel from India to Nepal.
  • This project is taken as a game-changing project in Nepal.



Connectivity projects


Road projects

  • Completion of 7 out of 14 India-funded roads in Terai region of Nepal. These roads will strengthen Terai road network in Nepal and improve the movement of people and economic activities in the region.
  • Coming to the road network, two countries are connected as Kathmandu-New Delhi direct bus service is already in place. Similarly, Nepal’s other few big cities are directly connected to Delhi through bus services.
  • there may be an announcement on the proposed Ramayan circuit.


Inland waterways network

  • Nepal has been keen to work in unison with India. India has already agreed to allow Nepal to use three inland waterways, thus expanding its transit options.
  • Nepal can operate its own vessels on the river Ganga. India has given consent to grant access to the Kolkata-Kalughat, Raxual; Kolkata-Sahebgunj, Biratnagar and Kolkata-Varanasi-Raxual routes for waterways.
  • India has developed a waterway on the Ganges River which connects Varanasi and the seaport of Haldia, Kolkata. If Nepal gets access to waterways, it will facilitate movement of cargo which it imports from third countries to Nepal.
  • Railway projects
  • There has been substantial progress in the railway connectivity as well. At least six railway projects are proposed and there have been some progress in the recent times.
  • Unlike Nepal-China railway line that is uniquely placed with difficult geography, the construction of Kathmandu-Raxual railway line is something very much possible as per the earmarked budget and construction plan.


Motihari-Amalekhgunj petroleum pipeline
  • Jaynagar (India)-Janakpur (Nepal) to Bardibas in Nepal,
  • Jogbani in India to Biratnagar in Nepal,
  • Nautanwa in India to Bhairahawa in Nepal,
  • Rupaidiha in India to Nepalgunj in Nepal,
  • New Jalpaiguri in India to Kakarbhitta in Nepal, and
  • Kathmandu-Raxual Mainly after the talk of Chinese railway



Integrated Check-Post (ICP)

  • The tasks of construction of integrated check posts have gained momentum in the past couple of years.
  • The Integrated Check-Post (ICP) in Biratnagar was inaugurated with some modern facilities such as electronic weighbridges, fire safety, warehousing facilities including the refrigerated cargo, 24×7 monitoring through CCTV and public announcement systems.
  • Earlier in 2018, India handed over the Integrated Check Post (ICP) Birgunj to Nepal.


Two countries have already agreed to construct Integrated Check-Posts at four major points along borders.
  • Raxual (India)-Birgunj (Nepal),
  • Saunali (India)–Bhairahawa (Nepal),
  • Jogbani (India)-Biratnagar (Nepal) and
  • Nepalgunj Road (India)-Nepalgunj (Nepal).

Out of four, two have been already completed and remaining two is being constructed.



Way forward

  • India should be serious on completing the pending projects
  • Irrespective of diplomatic high and low, India and Nepal should give top priority to speed up the development projects which can contribute to maintain cordial ties between two countries.
  • The meeting of existing bilateral mechanisms should take place on regular basis.
  • Making the initiatives productive has been a key challenge before the policymakers in both sides, now the reckoning should be to calibrate the shifting fundamentals and keep the policies and action in order.


The basic reason of Chinese presence in Nepal is to ensure that Nepalese territory is not

Used by Tibetans for breeding of discontent.  In the initial years, from 1950s to 1980s, the Chinese tried to build an economic presence in Nepal, which got enhanced tremendously post 1990s.

China has made inroads into Nepal in infrastructure, education and health sectors and has increased participation with Nepal at the economic front.


Soft policy

  • In the last decade, Chinese engagement with Nepal has got strengthened at soft policy level.
  • For that matter, China has opened up many Mandarin language training schools in the Terai region.
  • Chinese are providing Mandarin language training to Madhesis to ensure that in the near future, the Madhesis emerge as potential labours to work in the ever-expanding Chinese economy.



  • China is helping Nepal to fill the infrastructure gap.
  • Nepal wants to take advantage of the rail infrastructure built by China in Tibet. It committed to build a railway line connecting Kathmandu and Pokhara, with the birthplace of Lord Buddha at Lumbini.
  • China and Nepal signed agreements for all-weather road connectivity between Kathmandu and the Tibet Autonomous Region. Rasawagadi-Syabrubesi Road link also an important one.
  • Both countries have agreed to intensify the implementation of projects under the Belt and Road Initiative, now to be developed under the Trans-Himalayan Multidimensional Connectivity Network
  • Nepal is a part of Chinese Belt and Road Initiative with a SEZ promised.


Economic policy

  • Nepal agreed to allow Chinese banks to open branches and other financial services in Nepal and increase imports from China.
  • The two countries signed several MoUs, including one on Investment and Cooperation on Production Capacity, Human Resource Development Cooperation, and Economic and Technical Cooperation.
  • China has agreed to “take positive measures to facilitate Nepal’s export to China” and support “product development and post-harvest technology in agro-products” and wants to tap Nepal’s resources such as “construction materials, water conservation and hydropower and organic agriculture and herbs”
  • Both sides have also agreed to finalise the China-Nepal Free Trade Agreement (FTA).
  • The two sides have already concluded trade and transit agreements, and Nepal is eyeing connections with the Chinese market and oil refineries as well as the global supply chain via Chinese ports: Tianjin seaport to the east, Central Asia to west and beyond.


Administrative and security

Nepal also signed a treaty with China on mutual legal assistance in criminal matters, which will allow China to investigate cases of crime that might target Nepal.

Nepal acknowledged, Taiwan was an inalienable part of China and promised not to allow any anti-China activities on Nepalese territory. Joint Military Exercise Pact.

China will offer 100 training opportunities to the Nepalese law enforcement officers each year.

China agreed to build Madan Bhandari University for Science and Technology as a mark of respect for the late leader of the Communist Party of Nepal.



Reasons behind Nepal’s growing proximity with China

Indian policy errors – New Delhi was for long perceived in Kathmandu as “hawkish” and “selfish” in dealing with sensitive matters. The most notable instances of this include different river treaties, reluctance to respond to regular border-encroachment complaints, high-structure build-up along the border, inundation complaints, the armed border forces’ harsh behaviour, trade and transit crises, and embargoes.

People disbelief on India– the open border has always been a crucial area of contention.

Over reliance on india– Nepal has found itself heavily reliant on India, never acquiring the comparative advantage to increase exports. Unable to compete against lower-priced Indian products that flood the market.

India’s delay in implementation of various projects in Nepal more so vis-a-vis China and its implementation of agreed-upon projects. E.g. Mahakali agreement has remained without start for over two decades

Potential benefits from China– Nepal views the Chinese railway as an opportunity to bring Chinese pilgrims and tourists to Lumbini, the birthplace of the Buddha,

Ideological basis- The communist parties in Nepal have favoured and consistently protested against India. This time around the Nepali Congress also favoured them.


Way Forward

  • China’s engagement in Nepal is not new. Whether India will succeed in effectively competing with China to safeguard its interests and maintain its sphere of influence is going to depend on two overarching factors:
  • New Delhi’s overall capacity to challenge China, and
  • India’s political will to address its own controversial approaches towards Nepal.
  • Nepal cannot dispense with its reliance on India. India is and will remain vital for the country in many ways. However, India’s strategy to keep Nepal’s engagement with China to a minimum is no longer a viable option.
  • India must introduce new economic, developmental and infrastructure initiatives with Nepal that will not only bring tangible benefits to Nepali citizens but also address the vulnerabilities that will emerge in Nepal as the country engages with China.



  • India feels that the Chinese inroads into Nepal are necessarily to counterbalance the Indian influence in Nepal.
  • Nepal has asserted that its relationship with China is purely economic and will not be hurting the Indian strategic interests in any way.
  • The rising Nepal and China cooperation also signals that Himalayas are not a barrier anymore and for India, a strategy to check the Chinese engagements is required rather than reactions. Chinese strategy is to directly engage with the Nepali politicians and this has led China to build more trust.