India’s Bilateral Relations with Nepal

India and Nepal share a unique relationship of friendship and cooperation characterized by open borders and deep-rooted people-to-people contacts where people across the borders share family ties and culture. Nepal shares a border of over 1850 kms. in the east, south and west with five Indian States – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.

Recent Developments

1st Trans-border Fuel Pipeline between Nepal and India

  • The first trans-border fuel pipeline between Nepal and India is nearly complete with just over 12 km remaining to be laid down (65% of the 36.2 km long Motihari-Amlekhganj Pipeline project has been completed).
  • The Indian government has reportedly invested a sum of Rs 3,500 crore to install the pipeline for the project from Motihari in Bihar to Amlekhganj in Bara district of Nepal.

Constitutional Crisis in Nepal and India’s Stand

  • India urged Nepal during constitutional formation, to try for ‘broad consensus’ during the implementation process of its Constitution which has been the cause of bilateral tension between the two neighbours.
  • India was seen as supporting the marginalized groups of Nepal – the Madhesis, the Tharus and the Janajatis and supporting their argument that the Constitution promulgated by the CA has failed to accommodate their long-standing demands.

Open Border

  • An important issue is the open border itself, which is a unique joint heritage of the two countries. While it is Nepal’s Left that has traditionally demanded restrictions on the border, the call now rises from the Indian security establishment as well.

Floods in Plain area of Nepal

  • The Nepal plains are suffering from massive floods that have also affected downstream areas across the border. Besides the spread of settlements, a prime cause for the severity is that the Chure (Shivalik) hills have been gouged of rocks to build elevated roads and levees just south of the border, leading to inundation in Nepal.
  • A permanent bilateral mechanism is required to save the plains population of Nepal from suffering.

Kosi Barrage Issue

  • The Kosi Barrage and attendant embankments have the possibility of wreaking havoc because siltation of six decades has raised the riverbed within the levees far above the outlying tracts.
  • Kosi often designated as ‘Sorrow of Bihar’ still brings flood in Bihar and still no solution is reached against it.

Arbitrary Blockages/Custom Check at Border Points

The arbitrary blockages and go-slow at Indian Customs at border points, the selective use of quarantine for the export of Nepali agricultural produce, the increasing high-handedness of the Sashastra Seema Bal of India, in dealing with Nepalese crossing over —are some of the challenges on the bilateral plane.

India’s Bilateral Relations with Nepal

The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal. Under the provisions of this Treaty, the Nepali citizens have enjoyed certain advantages in India, availing facilities and opportunities at par with Indian citizens. Nearly 6 million Nepali citizens live and work in India.

Nepal’s Constitution of 2015

After years of debate, Nepal is celebrating a new constitution. Out of the 598 members of the Constituent Assembly, 507 voted for the new constitution, 25 voted against, and 66 abstained in a vote on September 16, 2015. Some small parties of the Tharu and Madhesi ethnic communities organized protests against the Constitution, leading to widespread violence in southern Nepal.

The then President Ram BaranYadav promulgated the new constitution on September 20, 2015.

New Principles

  • The written form of constitution embraces the principles of republicanism, federalism, secularism, and inclusiveness.
  • Under the Constitution, Nepal’s new federal structure will see the country divided into seven provinces, with clear lists of legislative powers for the central, provincial, and local bodies.
  • The country with the largest Hindu majority will continue to be a secular state with a special definition of the term: “respecting pre-historic traditions and religious and cultural freedoms.”

Trade and Economic Cooperation

India is Nepal’s largest trade partner and the largest source of foreign investments, besides providing transit for almost the entire third country trade of Nepal.

  • India accounts for over two-third of Nepal’s merchandise trade, about one-third of trade in services, 46% of foreign direct investments, almost 100% of petroleum supplies and a significant share of inward remittance on account of pensioners and workers.
  • The Main items of exports from India to Nepal are petroleum products, motor vehicles and spare parts, M.S. billets, machinery and spares, medicines, hot rolled sheets, wires, coal, cement, threads and chemicals.
  • The main items of exports from Nepal to India are polyester yarn, textiles, jute goods, threads, zinc sheet, packaged juice, cardamom, G.I. pipe, copper wire, shoes and sandals, stones and sand.

Indian Investment in Nepal

  • Indian firms are the leading investors in Nepal, accounting for about 40% of the total approved foreign direct investments.
  • As of 15th September, 2018, Indian ventures lead foreign investment with FDI commitments of INR. 5942crores.
  • There are about 150 operating Indian ventures in Nepal. Some large Indian investors include ITC, Dabur India, Hindustan Unilever, VSNL, TCIL, MTNL, State Bank of India, Punjab National Bank, Life Insurance Corporation of India, Asian Paints, CONCOR, GMR India, IL&FS, Manipal Group, and Tata Power, etc.

1950 Indo-Nepal Treaty ofPeace and Friendshiphip

  • The 1950 India-Nepal Treaty of Peace and Friendship (official name Treaty of Peace and Friendship between the Government of India and The Government of Nepal) is a bilateral treaty between Nepal and India establishing a close strategic relationship between the two South Asian neighbours.
  • The treaty was signed at Kathmandu on 31 July 1950 by the last Rana Prime Minister of Nepal Mohan Shamsher Jang Bahadur Rana and Indian ambassador to Nepal, Chadreshwar Narayan Singh and came into force the same day as per Article 9 of the Treaty.
  • Rana rule in Nepal ended just 3 months after the treaty was signed. The treaty allows free movement of people and goods between the two nations and a close relationship and collaboration on matters of defense and foreign policy.

Key Provisions of the Treaty

  • As per Articles 6 and 7, the two governments agree to grant, on a reciprocal basis, to the nationals of one country in the territories of the other, the same privileges in the matter of residence, ownership of property (requires RBI permission), participation in trade and commerce, movement and other privileges of a similar nature.

Water Resources and Energy Cooperation

A three-tier mechanism established in 2008, to discuss all bilateral issues relating to cooperation in water resources and hydropower has been working well. In the area of river training and embankment construction, Government of India has been providing assistance to Nepal for strengthening and extension of embankments along Lalbakeya, Bagmati and Kamala rivers. Started in 2008, with the present assistance, the total grant assistance already disbursed for embankments construction along these rivers amounts to over USD 4.5 billion.

  • There are more than twenty 132 kV, 33 kV and 11 kV transmission interconnections which are used both for power exchange in the bordering areas and for power trade. For enhanced transmission of electricity, the first high-capacity Muzaffarpur (India) - Dhalkebar (Nepal) cross-border power transmission line (initially charged at 132 kV), with GoI LoC funding of US$ 13.2 million, was in completed 2016.
  • Two additional 132 kV cross-border transmission lines between Kataiya (India) - Kusaha (Nepal) and Raxaul (India) - Parwanipur (Nepal), built with GoI grant assistance, were completed in 2017.
  • India is currently supplying a total of about 450 MW of power to Nepal. An Agreement on ‘Electric Power Trade, Cross-border Transmission Interconnection and Grid Connectivity’ between India and Nepal was signed on 21 October 2014. The Agreement is aimed at facilitating and further strengthening cross-border electricity transmission, grid connectivity and power trade between Nepal and India.
  • Two mechanisms, Joint Working Group (JWG) and Joint Steering Committee (JSC) envisaged under the Agreement have been established. Joint Technical Team (JTT) was formed for preparation of a long-term integrated transmission plan covering projects upto 2035. The 5th meeting of the JSC/JWG on power cooperation was held in New Delhi in April 2018.

Earthquake 2015

  • A devastating 7.8 magnitude earthquake struck Nepal on 25 April 2015 (followed by a powerful aftershock of 7.4 magnitude on 12 May 2015), the Government of India swiftly dispatched National Disaster Response Force (NDRF) teams and special aircrafts with rescue and relief materials to Nepal.
  • India’s assistance, which reached Nepal within six hours of the earthquake, included 16 NDRF teams, 39 IAF aircraft sorties with 571 tons of relief material including rescue equipment, medical supplies, food, water, tents, blankets and tarpaulin.
  • Medical teams from India were deployed in various parts of Nepal. India helped in restoring 3 power sub–stations in Kathmandu valley.
  • The total Indian relief assistance to Nepal amounted to approx. US$ 67 million. After the initial rescue and relief phase, India committed US$ 1 billion (which comprises US$ 250 million grant and US$ 750 million concessional Line of Credit) for post-earthquake reconstruction of Nepal during the International Conference on Nepal’s Reconstruction (ICNR) held in Kathmandu on 25 June 2015.

India’s Development Assistance to Nepal

  • In recent years, India has been supporting projects in Nepal for development of infrastructure through upgradation of roads in the Terai areas; development of cross-border rail links at Jogbani–Biratnagar, Jaynagar-Bardibas, Nepalgunj Road-Nepalgunj, Nautanwa-Bhairhawa, and New Jalpaigudi-Kakarbhitta; and establishment of Integrated Check Posts at Raxaul-Birgunj, Sunauli-Bhairhawa, Jogbani-Biratnagar, and Nepalgunj Road-Nepalgunj.
  • More than 559 large, intermediate and small–scale projects at an estimated cost of NPR. 76 Billion have been implemented across Nepal under Indian financial support since 1951.
  • Till date India has gifted 692 ambulances and 136 school buses to various institutions and health posts across Nepal’s 77 districts.

New Partnership in Agriculture

  • During the visit of Prime Minister of Nepal Mr. K. P. Sharma Oli’s to India in April 2018, the ‘India-Nepal New Partnership in Agriculture’ was launched with a focus on collaborative projects in agricultural research, development and education.
  • This is an important and timely initiative as vast populations of the two countries predominantly depend on agriculture and related activities for their livelihood.
  • Minister for Agriculture, Land Management and Cooperatives of Nepal Mr. C.P. Khanal visited India on 19-23 June 2018 for the inaugural ministerial meeting of the New Partnership in Agriculture with Agriculture Minister of India Shri Radha Mohan Singh.

Defence Cooperation

  • India has been assisting the Nepal Army (NA) in its modernization by supplying equipment and providing training. Assistance during disasters, joint military exercises, adventure activities and bilateral visits are other aspects of India’s defence cooperation with
  • Nepal.
  • A number of defence personnel from Nepal Army attend training courses in various Indian Army training institutions.
  • The ‘Indo-Nepal Battalion-level Joint Military Exercise SURYA KIRAN’ is conducted twice a year alternately in India and in Nepal. The 13th Surya Kiran exercise was held in Pithoragarh (India) in May-June 2018.

Gorkha Soldiers in the Indian Army

  • The Gorkha Regiments of the Indian Army are raised partly by recruitment from hill districts of Nepal.
  • Currently, about 32,000 Gorkha Soldiers from Nepal are serving in the Indian Army.
  • Since 1950, India and Nepal have been awarding Army Chiefs of each other with the honorary rank of General in recognition of mutual harmonious relationship between two Armies.

Cultural Relations

Government of India initiatives to promote people-to-people contacts in the area of art & culture, academics and media include cultural programmes, symposia and events organized in partnership with different local bodies of Nepal, as well as conferences and seminars in Hindi.

  • Familiarization visits to India by Nepali journalists/editors and short term training in India for Nepali editors/journalists/experts/officials in the field of print & electronic media and archaeology are also arranged.
  • The Swami Vivekananda Centre for Indian Culture was set up in Kathmandu in August 2007 to showcase the best of Indian culture. The Nepal–Bharat Library was founded in 1951 in Kathmandu.
  • The B.P. Koirala India-Nepal Foundation was set up in 1991 through a MoU signed between the Governments of India and Nepal.
  • India is also establishing an E-library system across Nepal.

Projecting Soft Power

  • The Archaeological Survey of India (ASI) was involved in the renovation of the Pashupatinath Temple Complex in Kathmandu.
  • On August 3, 2014 after attending 18th SAARC summit PM Modi had announced an assistance of INRs 250 million for the renovation of the main temple and additional assistance INR 50 million for cleaning the temple premises.
  • On 31 August 2018, the two Prime Ministers jointly inaugurated the Nepal-Bharat Maitri Pashupati Dharmashala in Kathmandu.

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