Indo-Nepal bilateral relations have been traditionally based on common culture, history and religion since time immemorial. Both the countries have been actively engaged with each other in every aspect whether politically, economically or culturally. The two countries established diplomatic relations back in 1947, agreeing to the principles of peaceful coexistence and sovereignty.
India and Nepal have a common approach to many regional and international institutions like the United Nations, SAARC, BIMSTEC and BBIN. These mutually beneficial engagements have obviously contributed to a firm foundation for the Nepal-India Relations in the past. Both the countries share an open border, making the transfer of goods and people an easy task.
However, in recent years there has been some new hostility in the relations owing to the changing geopolitical conditions that both countries face in a changing world order. India has been wary of China’s growing interest towards its neighbors especially Nepal which has always been a friendly and trustable alliance for India. Moreover, there have been significant changes in the bilateral relations after the rise of Narendra Modi as the Prime Minister of India. PM Modi has tried to exude confidence by referring to Nepal as “an old and valued friend” on Twitter.
HISTORICAL CONNECTION
Historically, the foreign relations of Nepal’s with India, during the British rule were governed by the Treaty of Sugauli. Later after Indian independence the Indo-Nepal Treaty of Peace and Friendship established formal relations.
The India-Nepal Treaty of Peace and Friendship is the most important pillar of the bilateral relations between India and Nepal. The Treaty consisting of 10 articles was signed by the last Rana Prime Minister of Nepal and the Indian Ambassador to Nepal in 1950. The treaty stands on the premises that both the countries will maintain everlasting peace and friendship and recognize each other’s sovereignty, territoriality and independence.
POST 2014: CHANGES AND CHALLENGES
PM Narendra Modi visited Nepal in August 2014 as a part of its “Neighborhood First Policy”. The visit was highly successful and Modi became the first foreign leader to address the constituent assembly of Nepal. Under Narendra Modi, India demanded some amendments in the constitution of Nepal. With KP Oli coming to power in Nepal there was evidence of growing rift in Nepal-India relations. So, in 2015 India and Nepal relations saw another downfall. India talked about its concerns over the new constitution and carried out an unofficial blockade preventing crucial supplies from entering the country. Oli clearly criticized the move and in response to the blockade signed a trade and transit agreement with China. Thus, playing the “China card”, Oli swiftly tried to end India’s monopoly on essential goods.
Nevertheless, India responded quickly during the destructive earthquake that struck Nepal. It provided Nepal with relief assistance worth US$ 67 million.
India and Nepal signed three significant agreements in 2018
In 2018, India and Nepal signed three new agreements on agriculture, connectivity and railways. Both the countries termed these three agreements as “path breaking”. Inauguration of a petroleum pipeline between Nepal and India was also carried out. However, both the sides kept away from some key bilateral issues. After the second visit of Oli, a joint 12-point statement was issued. Before the visit, there were speculations that Oli would consider a revision of the 1950 Treaty of Peace and Friendship as this agenda formed a big part of what Oli promised during the election campaigns. He demanded for the “resetting and redesigning” of relations with India.
Since Deuba came to power there have been no top-level visits between India and Nepal barring BJP’s Foreign Affairs Department Chief Vijay Chauthaiwale where he met other top leaders of Nepal. However, Deuba met Modi on the sidelines of COP26 in Glasgow, where he invited Modi to Nepal.
India provided one million Covishield vaccines to Nepal
In January 2021, the sixth meeting of Nepal-India Joint Commission (JC) was organized to discuss various bilateral issues. Issues such as COVID-19 vaccines, boundary and border management, connectivity, trade, culture and education were discussed. After the meeting, India provided one million doses of Covishield vaccines to Nepal.
MUTUAL CONCERNS
India and Nepal relations are based on certain key concerns. These issues have determined and continue to determine the blueprint of bilateral relations between the two ancient friends. There are three major concerns which are elaborated below:
Investment
Foreign Direct Investment has been important for the economic development of Nepal. Investors have made investments in sectors like tourism, hydropower, construction, industries etc. Nepal’s location and ecology have always been a point of attraction for countries like India and China. This has been due to the availability of young and very affordable supply of labour and the diverse climatic conditions which are favourable for investments in different sectors. It is also a great tourist attraction for both the Indian and Chinese travellers.
Recently, there has been a large Chinese investment in Nepal. It has even surpassed the Indian Investment by three times. FDI in Nepal have been lower as compared to other countries having access to the sea due to the low investment cost. Since Nepal has been sandwiched between India and China, which are among the fastest growing economy in the world, it is beneficial for Nepal to attract investors who are capable to export goods to these two Asian giants.
Border Dispute
The areas in and around ‘Lipulekh’ has been a bone of contention, as PM Modi announced to build a road via Lipulekh to Manas Khand which is a gateway to reach Man Sarovar a Hindu pilgrimage in Tibet. There were lot of furore among Nepalese citizen followed by publishing maps by both Nepal and Indian government. Repeated claims were made by respective governments for three territories – Limpiyadhura, Lipulekh and Kalapani.
China
While both India and China have their interests in Nepal, it’s important for Nepal to continue balancing its policies in such a manner that it serves twin interests of stability and development for his own country. For Nepal, mutual trust is the key to good bilateral relations with both India and Nepal. It seeks to bring investment in the country from both its neighbors for a rapid economic development.
Thus, interdependence between India and Nepal is the key to improved bilateral relations. More than India, Nepal is dependent on it. There is an urgent need to revitalize the cultural relations with India. This would not only attract Indian investments in Nepal but also increase the economic activities between them. This is a great way to engage India and create a conducive environment for interdependence. This aspect provides a great leeway to India as compared to China when it comes to develop cordial relations with Nepal.
In a Nutshell:
- The coming together of Communist forces represents a turning back of the clock for India because it is apparent 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.
AREAS OF COLLABORATION BETWEEN THE TWO COUNTRIES
Trade and Commerce
- 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.
Defence Cooperation
- Provision of equipment and training by India helps the Nepalese Army to modernize.
- The Indian Army’s Gorkha Regiments are partially recruited from the Nepal’s hill areas.
- Since 2011, India and Nepal have participated in a joint military exercise called Surya Kiran.
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.
Connectivity
- 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
- Territorial Issues
- Issues with the Peace and Friendship Treaty 1950
- China’s Intervention in terms of investments, loans and other assistance aligned with its Belt and Road Initiative.
- Internal Security – India Nepal share an open border a major concern for terrorists sneaking into India through Nepal besides smuggling of counterfeit notes and drugs.
- Hydro-electricity: Nepal imports power from India, but is hesitant to collaborate with India for mutual production. Hesitancy should be removed.
Conclusion
No matter which government comes to power in Kathmandu, the bilateral ties between Nepal and India need to remain strong due to the cultural, economic and social proximity between the two countries. Pushpa Kumar Dahal alias ‘Prachanda’, who has been sworn in for the third time as the Prime Minister of Nepal, is largely seen as pro-China. The recent development may not bode well for India-Nepal ties as Prachanda and his main backer Oli is also known for his Chinese allegiance. But analysts in both Nepal and India have predicted a more pragmatic approach by the incumbent government. The new dispensation may not tilt towards either China or India in its foreign policy overtures. Nepal needs to maintain cordial relations with both India and China, as it cannot develop the country by damaging its relations with the southern neighbour – India.
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