A Study on India-Nepal Relationship


The relation between India and Nepal go way beyond that of neighbours. Both the countries share a unique bond in various aspects. Cultural, traditional and religious similarities among the people of both countries cannot be considered belittle. The basis of such a strong connection comes from the fact that both the countries have a lot of common factors. There has been a long tradition of free movement of people across the borders. This implies that the citizens of both the countries are exempted from procedures such as procurement of passports and visas in order to travel to either of the two countries. Nepal shares a border of over 1850 kilometers with five Indian states namely Sikkim, Bihar, West Bengal, Uttar Pradesh and Uttarakhand. The foundation of India Nepal relationship can be traced back to the India-Nepal Treaty of Peace and Friendship, 1950.India remains as one of the best destination for Nepali citizens for working as well as staying. Nepal with its luring picturesque natural features often serves as the ideal tourist destination for Indians.

India proved that it is the loyal and reliable neighbor when Nepal was devastated by the 7.8 magnitude earthquake that struck on April 25th, 2015 followed by persistent aftershocks. Not only did India send aids to Nepal, it ensured that every form of assistance was constantly made available to its landlocked neighbor. The total Indian relief assistance amounted to US $ 67 million. (About India-Nepal Relations) .

India’s main interest from Nepal would be to see a peaceful and stable political, economic, religious and cultural environment in its neighborhood. Obviously, an unstable neighborhood will bring down not only its reputation in the international arena but also its prospects of emerging as a global leader. Amid protests, Nepal’s second constituent Assembly promulgated a Constitution in Semptember; 2015.India had played a major role in the recent events and developments in Nepal which will be discussed in detail in the following sections.

Bilateral trade has been a strong bonding factor for both the countries since a very long time. Since 1996, Nepal’s exports to India have grown more than eleven times and bilateral trade more than seven times; the bilateral trade that was 29.8% of Nepal’s total external trade in 1995-96 reached 66% in 2013-14. Exports from Nepal to India increased from INR 230 crore in 1995-96 to INR 3713.5 crore (US$ 605 million) in 2013-14 and India’s exports to Nepal increased from INR 1525 crore in 1995-96 to INR 29545.6 crore (US$ 4.81 billion) in 2013-14. (Taneja, 2011).The main items of exports from India to Nepal include petroleum products, machinery, spare parts, cement and chemicals. India’s main imports from Nepal include polyester, yarn, textiles and jute etc. Indian firms contribute to a great extent in the Foreign Direct Investments (FDI) in Nepal as they are some of the biggest investors.

Neighboring countries have certain geographical characteristics which sometimes act as a bonding factor and sometimes as a deterrent. Rivers fall under this category. The Mahakali River is one of the five major river basins of Nepal which is shared with India. In 2008, a three-tier mechanism was established between the two countries to discuss and resolve the bilateral issues relating to river linking, hydropower etc.

India has contributed extensively to various projects in Nepal spanning over sectors including health, infrastructure, water resources, education, community and rural development.

As is the case with most of the countries and their neighbours, all is not perfect with India and Nepal. India shares a 1,751km (1,088-mile) open border with Nepal through which people pass freely but it has often concerned the country’s security agencies because of its use by smugglers, human traffickers and terror suspects. (BBC News, 2015) The recent turn of events have brought certain internal issues between the two countries into the limelight. Nepal promulgated its new Constitution which has led to bitter relations with its neighbor. The Constitution defines Nepal, a majority Hindu country as a secular republic divided into seven federal provinces. India is worried that the Constitution is very narrow and do not cater to minorities within Nepal and that this would lead to conflicts and violence which can eventually spill to its own territory. Nepali disapproval of India’s reaction intensified when New Delhi imposed an unofficial blockade of critical goods and supplies across its border with Nepal. India maintains the blockade is unofficial and truck drivers are simply hesitant to cross the border into the unstable and turbulent Nepali plains. (Panda, 2015)

Adding on to the crisis, Nepal is currently facing severe shortage of fuels owing to disruption in the supply lines within India. Shortage in fuel has led to shortage in the supply of essential food items and even medicines. At this point, Nepal was on the verge of a humanitarian crisis. What comes as an even bigger blow to India is the fact that china has stepped up to supply fuel to India. This puts India in an even more vulnerable position. The fuel crisis has caused the Nepali government to implement rationing and price hike. This has caused the public anger against India. By stepping in at this juncture, China is not only proving to be a better neighbor but is also being successful in receiving the goodwill lost by India. China has promised 1.3 million liters of gasoline to Nepal. Although this started as an immediate response from China, there are possibilities of it evolving into a long-term bilateral trade relationship between the two countries at the expense of India.

The Nepali finance Minister Ram Sharan Mahat rightly pointed out that Nepal is not a landlocked country. But it is virtually an India locked country. This is a clear indication towards Nepal’s dependency on India. However, the recent event of fuel blockade has served as a source of enlightenment for the Nepali people. They have learnt to diversify their sources and not depend on only one country for their requirements. Nepal is naturally blessed with mountain fed rivers that has the potential to generate hydroelectricity which can power the entire country. There are constant clashes between the Nepali police and protesters which serve as a major threat to India.

Nepal has always proved to be a loyal and true neighbor to India. The issues should that exist between the two countries should be resolved by the efficient foreign policy inputs. This would enable both the countries to help in the economic, social and cultural developments of both the countries.

– Anna Elias, Research Team YFFP Guwahati


Tiezzi, S. (n.d.). China Steps In After Indian Fuel Stops Flowing to Nepal. Retrieved November 12, 2015, from http://thediplomat.com/2015/10/china-steps-in-after-indian-fuel-stops-flowing-to-nepal

Panda, A. (n.d.). India, China React to Nepal’s Constitutional Crisis. Retrieved November 12, 2015, from http://thediplomat.com/2015/10/india-china-react-to-nepals-constitutional-crisis/

Sarup, A. (1972). Transit Trade of Land-Locked Nepal. International and Comparative Law Quarterly, 21(02), 287-306.

Bhattarai, K. (2011). Empty Core in a Coalition: Why No Constitution in Nepal?. Indian Journal of Economics and Business, 10(1), 119-126.

Image Source: http://assets-cdn.ekantipur.com/images/the-kathmandu-post-archive/ped/2014/20140724introspection-and-india-600×0.jpg


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