India-Nepal Relation

Pillars of Relationship

• The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.
• 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.
• Nepal shares border with 5 Indian states – Uttarakhand, Uttar Pradesh, West Bengal, Sikkim, and Bihar. Hence, an important point of cultural and economic exchange.
• Nepal being a landlocked country many MOUs have been signed between both governments for better connectivity. For instance, laying an electric rail track linking Kathmandu with Raxaul in India.
• The Gorkha Regiments of the Indian Army are raised partly by recruitment from hill districts of Nepal.
• India from 2011, every year undertakes a joint military exercise with Nepal known as Surya Kiran.

Key Issues

Nepal informed India that recruitment of Gorkhas under Agnipath scheme does not conform with provisions of the tripartite agreement signed by Nepal, India, and Britain on November 9, 1947.

Recruitment of Gorkhas from Nepal began in the then British Indian army after the Treaty of Sagauli was signed in 1816 between the government of Nepal and the British East India Company.

And it became a tripartite arrangement in November 1947 after India became independent and Gorkhas in Nepal were given a choice to serve in the Indian Army or go to UK.

Dispute over Kalapani: The dispute over Kalapani, which lies on the easternmost corner of Uttarakhand’s Pithoragarh district, between Nepal and India was revived in November 2019 when India published a revised political map showing the newly created Union Territories of Jammu and Kashmir and Ladakh. Both India and Nepal lay claim to Kalapani.

China’s Role

• An Agreement on Transit Transportation, a Protocol was concluded with China providing access to four sea ports and three land ports.
• China has overtaken India as the largest source of foreign direct investment.
• China is also engaged with airport expansion projects at Pokhara and Lumbini.
• Thus, Nepal is quietly tilting away from India.

Way Forward

• Dialogues for Territorial Disputes: The need today is to avoid rhetoric on territorial nationalism and lay the groundwork for quiet dialogue where both sides display sensitivity as they explore what is feasible.
• Strengthening Economic Ties: The power trade agreement needs to be such that India can build trust in Nepal.
• Investments from India: The Bilateral Investment Promotion and Protection Agreement (BIPPA) signed between India and Nepal needs more attention from Nepal’s side.
• Sensitising Towards Nepal: India should engage more proactively with Nepal in terms of people-to-people engagement, bureaucratic engagement as well as political interactions.