India Nepal Relations

India Nepal Relations

This article deals with ‘India Nepal Relations.’ This is part of our series on ‘International Relations’ which is important pillar of GS-2 syllabus . For more articles , you can click here

Brief History of India Nepal Relations

Common Culture – Since times immemorial
– In Ramayana, Sita was from Janakpuri (Nepal)
British Times Treaty of Sagauli of 1816 -signed when Gurkhas lost to British East India Company  

As per treaty
Uttaranchal, Himachal Pradesh and Sikkim annexed to the British empire
British resident  stationed at Kathmandu
Nepal surrendered it’s  foreign policy  to Britishers
Gorkhas  recruited in British Army
Treaty of Peace & Friendship, 1950 Neither government shall tolerate any threat to the security of the other by a foreign aggressor
– Open border between the two countries
– Allows Nepali nationals to work in India without a work permit      
Military ties 180 training slots for Nepalese Army in Indian Military Acadamy
Indian Army Chief is Honorary General of Nepal Army & vice versa
Nepalese can serve as soldiers in Indian army.  Over 1.23 Lakh ex‐servicemen residing in Nepal. (₹ 1100 crores/ annum pension)
– Annual Joint military exercise = Surya Kiran   

But Nepal is also increasing military ties with China. 2017 saw first  Nepal-China joint military exercise  
Multilateral Both part of
Others Education: 3000 scholarships/seats annually to Nepali nationals.
Culture: Signed three sister-city agreements :- Kathmandu-Varanasi , Lumbini-Bodhgaya  (Buddhist) and Janakpur-Ayodhya (Sita & Ram)

Issues / Irritants in India Nepal Relations

  • Smuggling of goods
  • Domestic parties and government playing China Card
  • China making inroads into Nepal  
  • Issue of Open Border : due to this, many illegal activities carried our
    • Fake Currency,
    • Terrorist penetration ,
    • Drug Smuggling,
    • Human Trafficking
  • During floods in Kosi river , both countries allege each other for responsibility of floods
  • Border / Boundry Issue : Strategic Position of Kalapani which provides advantage to India vis a vis China is demanded by Nepal (under Chinese pressure , demand is gaining strength)
India Nepal Relations
Kalapani Issue
  • New : Nepal opposed & boycotted the India led BIMSTEC military exercise in 2018


  • Large number of Nepalese working in India (Nearly 30 lakh Nepalis (some 10% of Nepal’s population) are employed in India)
  • Gorkha soldiers in Indian army
  • Common cultural & historical ties
  • Hindu religion – majority in Nepal
  • Terai region of Nepal and India has similar ethnic group with strong kinship bond
  • Matrimony  across  border  is common feature. 
  • Exporting electricity to India rather than China is easier because India’s most populous states are in neighbourhood, while China’s biggest cities and industries are far to the east.
  • Nepal is a land locked country, access to the outer world is only through India 
  • Indian  cinema  &  music is  highly  popular  in  Nepal.

Strategic Importance

  • Nepal is a buffer state between India and China.
    • Indian border with Nepal is most indefensive => no protection by Himalayas as Nepal lies beneath Himalayas
    • If China penetrates to Nepal and connect it with Road and Railways => Gangetic plains will become vulnerable

Internal Security Issues with Nepali Border

  • Fake Currency,
  • Terrorist penetration ,
  • Drug Smuggling,
  • Human Trafficking

River issues

  • Nepal’s installed hydel capacity of 700 MW is much lesser than potential of over 80 GW.
  • Three major rivers are
    • Kosi , Gandhak & Mahakali
  • Nepal has high hydropower potential but it is dealing with power shortage (Kathmandu in summer has power shortage of 8 hours) . Even India is supplying Electricity to Nepal

Indian help in Post – Earthquake Reconstruction

  • 2016 : Nepali PM (KP Oli)  visited Bhuj, which is held up as an example of efficient post-quake reconstruction. 
  • India had pledged $2 billion of reconstruction aid

New Projects  of India in Nepal

  • Construction of a Raxaul-Kathmandu railway line.
  • Motihari-Amlekhgunj petroleum  pipeline to address shortages of petroleum
  • Making  Nepal-India Ramayana Circuit connecting Janakpur, the birthplace of Sita, with Ayodhya
  • 900 MW Arun III hydro-electric project  in Nepal

China card of Nepal

  • China has Increased its footprint in Nepal .
  • China in 2015 overtook India as Nepal’s biggest foreign investor
  • Present Government of KP OLI has clear tilt towards China
  • Chinese Project of which Nepal is part
    • China planning to extend its rail network  to the Nepal border ((Lhasa to  Nepal)
    • Nepal is part of OBOR
    • Funding powerplant on Budhi Gandhaki  ($ 2.5 billion) , Trishuli river , SETI river  etc
    • 2016 : Access to Tianjin seaport for transit of Nepali goods (but distance = 3,000 km ||  1,000 km from Haldia port )
    • Making Dry Port at Kodari (China has made road from Kathmandu to Kodari)
    • Constructing road  connecting Kodari with Zhangmu 
    • China Study Centers (CSC) and Confucius Institutes in Nepal
Nepal China Road
  • India accounted for (just) 53 percent of Nepal’s trade in 2015, down from 60 percent in 2006, when a Maoist insurgency ended. China’s share of Nepal’s commerce has risen to 31 percent from 3 percent

Note : Earlier King Mahendra (1960s), Birendra & Gyanendra too used China card => It is not a new problem

Why China is interested in Nepal

  • Market for Chinese products in Nepal
  • Tibetan community in Nepal is a serious concern => crackdown on Tibetan activities.
  • Use Nepal in breaching Himalayan barrier 

Why India is worried ?

  • Strategic vulnerabilities if China breaches Himalayan barrier
  • Debt Trap diplomacy of China => can take parts of Nepal on lease

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