India-Nepal Ties in Changing Times

Syllabus: GS 2/IR

In Context

Nepal recently announced the printing of a new Rs 100 currency note featuring a map that includes the Indian territories of Lipulekh, Limpiyadhura, and Kalapani.

• Lipulekh, Kalapani, and Limpiyadhura had been included in India’s November 2019 map.

India-Nepal Relations

Historical and Cultural Connections: 

• Longstanding Ties: The relationship between India and Nepal stretches back centuries, marked by cultural exchange, religious affinities, and political interactions. 
• Open Border: A unique feature is the open border policy allowing free movement of people between the two countries.
• Shared Heritage: Both nations share a rich Hindu and Buddhist heritage, evident in pilgrimage sites, religious practices, and cultural celebrations.
• Friendship Treaty: The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal. 

Strategic Partnership:

• Security Cooperation: India and Nepal have close security ties, with India providing training and equipment to the Nepali Army.  The ‘Indo-Nepal Battalion-level Joint Military Exercise SURYA KIRAN’ is conducted alternately in India and in Nepal
  • The Gorkha regiments of the Indian Army are raised partly by recruitment from hill districts of Nepal.
• Hydropower Development: India is a major partner in Nepal’s hydropower development projects, crucial for Nepal’s energy needs.

Economic & Humanitarian Ties: 

• Economic Interdependence: India is Nepal’s largest trading partner and a significant source of foreign investment.
  • Both countries signed MoUs for a cross-border petroleum pipeline, cross-border payments, infrastructure development for check posts, and cooperation between foreign service institutes. 
  • India remains a major trade and transit partner, where a number of Nepalis continue to earn a living or pursue higher education.
    • They also renewed the Transit Treaty, virtually inaugurated integrated check posts, and flagged the inaugural run of a cargo train from India to Nepal.
• Humanitarian 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). 
• Power Exchange: India and Nepal have had a Power Exchange Agreement since 1971 for meeting the power requirements in the border areas of the two countries, taking advantage of each other’s transmission infrastructure.

Challenges and Tensions

• Border Disputes: There are unresolved territorial disputes concerning certain border areas. Nepal maintains that not just the Kalapani region, but Limpiyadhura and Lipulekh are parts of its territory as demarcated in the 1816 Treaty of Sugauli.
  • India has stated that the 1950 Treaty of Peace and Friendship between India and Nepal annulled the Sugauli Treaty.
• Water Sharing: Issues related to water sharing of transboundary rivers can lead to occasional tensions.
• Security Issues: There was an escalation of the smuggling of drugs, arms and terrorist-related cross-border activities masterminded from Pakistan against India, from Nepalese soil. 
• Political Instability: Accompanied by frequent changes of government (a result of political opportunism), facilitated the spread of a Maoist insurgency within Nepal which later established its headquarters in a jungle hideout in India.
• External Influences: Nepal might be cautious of becoming overly reliant on India and may seek to diversify its foreign relations (Playing China Card)

Conclusion and Way Forward

• India and Nepal must do more than merely resolve boundary issues. 
• They must return to the core strengths of their unique social, cultural, strategic, political, and economic bonds and modernize ties to directly connect its people, markets, finance, and technology.
  • Good ties with Nepal, meanwhile, help India address security and geopolitical issues in its neighbourhood more smoothly. 
•  India could consider offering a new and holistic development road map which would excite public imagination and attract cross-party political consensus .