India-Nepal Cooperation

In News

• India and Nepal recently agreed to strengthen their economic and development cooperation for the benefit of the two countries and region as a whole.

More about the news

• India’s Foreign Secretary recently met his Nepalese counterpart holding discussions on strengthening the comprehensive bilateral relations.
  • The visit is in continuation of the regular exchange of visits between the two friendly neighbours.
• Issues of discussion:
  • Various aspects of Nepal-India relations including the power sector cooperation, trade, transit, education, culture, healthcare and connectivity infrastructure were discussed during the meeting.
  • Issues such as increasing development assistance to Nepal, boosting investment, resolving problems surfacing in connectivity, and bilateral trade as well as the promotion of power trade were mainly featured during the meeting.
• Provision of international air route:
  • Nepal urged India to provide an international air route for the effective operation of the newly opened Gautam Buddha International Airport and Pokhara International Airport.
• Proposal of a common voice of the South Asian nations: 
  • Nepal also proposed to form a mechanism for a common voice of the South Asian nations in the international forums regarding climate change issues.

India-Nepal Relations

• India & Nepal share close and friendly relations characterised by age-old historical and cultural linkages, open borders and deep-rooted people-to-people contacts.
  • Nepal is important for India in the context of its overall strategic interests in the region, and the leaders of the two countries have often noted the age-old “Roti Beti” relationship.
• Sharing borders:
  • The country shares a border of over 1,850 km with five Indian states — Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.
  • Land-locked Nepal relies heavily on India for the transportation of goods and services.
• Trade and economic ties: 
  • India remains Nepal’s largest trade partner, with bilateral trade crossing US$ 7  billion in FY 2019-20. India provides transit for almost the entire third-country trade of Nepal. 
    • India’s export to Nepal has grown over 8 times in the past 10 years while exports from Nepal have almost doubled. Despite the difficulties due to the pandemic, India ensured uninterrupted flow of trade and supplies to Nepal. 
    • Nepal is India’s 11th largest export destination, up from 28th position in 2014. 
    • In FY  2021-22, it constituted 2.34% of India’s exports. Infact exports from India constitute almost 22% of Nepal’s GDP. 
• Development Partnership: 
  • Financial and technical assistance:
    • GoI provides substantial financial and technical assistance to Nepal for  the implementation of large development and infrastructure and connectivity projects,  as well as small development projects/high-impact community development projects in key areas of education, health, irrigation, rural infrastructure, livelihood development, etc. all across the country. 
  • The ‘New Partnership in Agriculture’:
    • It was announced in April 2018, which focuses on collaborative projects in Agriculture,  Education and R&D.
  • Cross-border railway links:
    • India is providing financial and technical assistance for construction of two broad gauge cross-border railway links viz Jayanagar-Bardibas and Jogbani-Biratnagar. 
  • India-Nepal Rail Services Agreement (RSA):
    • India and Nepal signed a Letter of Exchange (LoE) to the India-Nepal Rail Services Agreement (RSA), which enabled all authorised cargo train operators including private container train operators to carry Nepal’s container and other freight.
  • Mahakali River bridge:
    • Recently, a MoU was signed between India and Nepal for the  construction of a motorable bridge across the Mahakali River connecting Dharchula  (India) with Darchula (Nepal), under Indian grant assistance.
• Operation Maitri & post-earthquake reconstruction assistance:
  • In the wake of the 2015 earthquake in Nepal, GoI was the first responder and carried out its largest disaster relief operation abroad (Operation Maitri). 
  • India extended  US$ 1 billion to Nepal as part of its long-term assistance for post-earthquake reconstruction in housing, education, health and culture heritage sectors. 

Issues between India & Nepal

•  Treaty of Peace and Friendship of 1950:
  • On 31 July 1950, India and Nepal signed a treaty of peace and friendship in an effort to “strengthen and develop these ties and to perpetuate peace between the two countries”.
    • As time passed, Nepal believed the treaty was “incompatible with national self-respect”.
• Madhesi Issue:
  • India’s entrenched interests in Nepal suffered a setback in 2015, when a blockade at the borders ensued following protests by Madhesis and some other ethnic groups against marginalisation of their interests in the newly-passed Nepalese Constitution.
• Kalapani dispute:  
  • The area is in India’s control but Nepal claims the region because of historical and cartographic reasons. The area is the largest territorial dispute between Nepal and India consisting of at least 37,000 hectares of land in the High Himalayas.
• Susta Border dispute:
  • Susta is a disputed territory between Nepal and India. It is administered by India as part of West Champaran district of Bihar.
  • Nepal claims the area a part of West Nawalparasi District under Susta rural municipality, alleging that over 14,860 hectares of Nepali land in Susta has been encroached upon by India.

Way ahead

• There are several irritants that have developed, straining this relationship, and for now there seems to be a concerted attempt by both governments to return to bonhomie, with the Indian government seeking to utilise “religious diplomacy” as a means to emphasise the special relationship. 
• India-Nepal relations need to graduate to a more meaningful partnership on economic and geopolitical issues, with the Indian government continuing to retain a substantial role in partnering the Nepali regime in development projects.

Source: TH