India-Nepal Relations - Seeker's Thoughts

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India-Nepal Relations


India Nepal Relations






India-Nepal Relations

Nepal has historically been defined by internal political fundamentals that shape its foreign policy decisions, yet Nepal remains an indispensable country that deserves our care and consideration.

Nepal should avoid playing China off against itself and trying to force Delhi's attention onto any existing issues between the countries; doing so would only prove harmful for both.




India's approach to Nepal is heavily impacted by its perceptions of security. Situated between adversary neighbours China and Pakistan, Kathmandu understandably seeks a balanced foreign policy formulation approach. Furthermore, Nepal may fear left-wing Maoist extremist groups operating within its territory may form links with similar groups within India, posing a security threat.

As such, the government of Myanmar attempts to keep India informed on developments. Therefore, both nations exchange letters and reports regularly. In order to maximize border monitoring efficiency, a joint working group on integrated border management was also established; its aim is to facilitate joint action against terrorist attacks or any other activities which threaten national security on both sides.

Indian concerns regarding exclusionary and majoritarian clauses of Nepal's new constitution and sympathy for Madhesi demands should be seen within this context. Such gestures serve to keep India informed while upholding their "special" character between Nepal-India ties.

At times, Nepal's security calculus can also be affected by domestic politics. India's announcement in 2017 of additional economic benefits to Nepal came at just the right time for Prime Minister KP Sharma Oli, who needed something to shore up public support, allay nationalist sentiments, and deflect attention away from some key ordinances he had promised his constituents.

At such times, it is crucial to recall that India and Nepal are bound by the 1950 Treaty and its associated correspondence, which states "neither government shall tolerate any threat to either's security from a third power, and both must notify each other if serious friction or disagreements develop with another neighboring state". Therefore, India's security concerns must not become eclipsed by economic considerations that make their relationship distinctive.




Nepal has long been one of India's main trading partners since independence, concluding several bilateral economic agreements such as the Trade Agreement in 1978, Transit Agreement in 1980, and Agreement to Control Unauthorized Trade (1977). Both nations also participate in joint ventures as well as have signed an Investment Protection Treaty Agreement between them.

Nepal and India enjoy strong bilateral relations that have been strengthened through multiple high-level visits by their leaders. Nepal has joined India's multilateral institutions such as BBIN, BIMSTEC, SAARC and the Non-Aligned Movement.

However, the political situation has become complicated as anti-India sentiments remain. Mistrust still pervades both societies despite being under democratic rule, making it hard for political parties to completely overcome it. Indeed, anti-India sentiments continue to be leveraged by some political groups for electoral support or undermining governments of their choice.

India does not aim to strain relations with Nepal; rather, its aim is to protect their security interests. Understanding this dynamic is critical; positive economic relations can exist without jeopardizing either country's security concerns.

India provides over 3000 scholarships/seats annually to Nepali students at Ph.D/Masters/Bachelors level (and equivalents), Bachelors level and plus-two level in fields like engineering, medicine, agriculture veterinary sciences business administration information technology music fine arts among others - contributing significantly to Nepal's development of human resources.

Sutlej Jal Vikas Nigam Ltd's Arun III Hydro Power Project will play an integral part in providing energy to Nepal on a Build Own Operate Transfer basis; this 900MW project will be the first of its kind ever constructed here.

This project will promote bilateral trade, provide energy to Nepal that is vital to its economic development and security needs, and lead to substantial economic benefits that will assist Nepal in building strong domestic governance by decreasing dependence on external sources of income.


Economic Cooperation


No doubt the legacy of mistrust remains, yet India and Nepal have made positive economic moves toward convergences through trade treaties, transit treaties and agreements for controlling unauthorised trade - measures designed to provide Nepal additional economic advantages. Furthermore, a high-level task force was recently created in order to further deepen bilateral cooperation across multiple sectors.

PM Modi struck an optimistic and committed note during his visit to Kathmandu, declaring India will respect Nepalese sovereignty while noting missed opportunities from the past should not hinder future endeavours. Additionally, he emphasised greater engagement between them in areas like trade and agriculture.

Apart from increasing economic cooperation, both countries must also address security challenges they share. Uttarakhand, Himachal Pradesh, Bihar West Bengal and Sikkim's open border with Nepal is often used for terrorist activity such as arms smuggling, money laundering and destabilisation activities; hence it is vital to establish integrated border management.

For this to occur, both countries need a multipronged approach that includes infrastructure development, capacity building and creating new mechanisms for cooperation such as intelligence sharing, border management, water resource and flood forecasting. Both governments have agreed on joint construction of a hydropower project in Nepal's upper Bhote Kosi region that will not only benefit both economies but will help address issues like cross-border pollution and environmental degradation as well.

Cultural cooperation between both countries has focused on educational and cultural exchanges, with both countries working hard to encourage educational and cultural exchanges between their youth. Science and technology offer many possibilities for joint work; governments from both sides have set up scientific and technological centers in each other's territory to promote cooperation in fields like agriculture, information technology engineering and biotechnology.


Cultural Cooperation


Both countries have agreed to establish sister cities - beginning with Lumbini and Kushinagar - which are among Buddhism's holiest sites, reflecting their shared heritage. While this development is welcomed, cultural exchange will likely remain limited without changes within Nepali politics itself.

Trust between Nepal and India has long been tenuous due to a perception that India attempts to interfere in domestic matters and favour certain ethnic groups, creating an anti-India sentiment which runs deep through society - it is hard to find anyone without some kind of anti-India sentiment in Nepal!

Modi made an attempt at breaking through this impasse during his visit by asserting India respects Nepalese sovereignty and does not interfere in internal matters of Nepal, addressing one of the central issues in their bilateral relationship. While his assertion may have helped remove some accumulated poisonous feelings in their relationship, Delhi will take time convincing Kathmandu it has no hidden agenda other than friendship.

India plays an instrumental economic role in Nepal as its largest trading partner and transit for most third-country trade. Both public and private investment has taken place within Nepal's borders; both public and private investors have invested both publicly and privately. Furthermore, both nations have signed an important power trade agreement which allows developers to build hydropower plants within Nepal's borders while selling electricity back into India via power trade contracts.

Both nations share a commitment to multilateralism, including within the UN and Non-Aligned Movement, working closely together on issues like multilateralism and regional fora such as SAARC, BIMSTEC and BBIN; their strong working group on counterterrorism provides ample proof. Furthermore, cooperation exists across areas like hydropower generation, agriculture production, connectivity and energy production.

Though relationships may be tenuous, it is crucial that both nations work together for the benefit of both regions and their citizens. Both must use their shared interests and strengths to form stronger partnerships that allow them to move forward towards reaching their respective goals.

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