General Studies Paper 2

Context

• Despite daunting challenges to Nepal’s democracy, governance and stability and seemingly intractable bilateral irritants, the Prime Ministers of Nepal and India have shown that a pragmatic approach and mutual sensitivity can re-energise bilateral relations.
• The Prime Minister of Nepal, Pushpa Kamal Dahal Prachanda’s first bilateral visit to India since assuming office in the current term is notable in this sense. Driven by challenges presented by the post-COVID-19 world, current realities as well as huge opportunities, India and Nepal were able to review the entire spectrum of the bilateral agenda covering political, economic, trade, energy, security and developmental cooperation.

India-Nepal ties

• Nepal occupies a special significance in India’s foreign policy because of the geographic, historical, cultural and economic linkages/ties that span centuries.
• India and Nepal share similar ties in terms of Hinduism and Buddhism with Buddha’s birthplace Lumbini located in present day Nepal.
• The two countries have close bonds through marriages and familial ties, popularly known as Roti-Beti ka Rishta.
• The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.

Areas of Cooperation Between the Two Countries

• Trade and Economy: India remains Nepal’s largest trade partner, with bilateral trade crossing USD 7 billion in FY 2019-20.
• Connectivity: India is looking to develop the inland waterways for the movement of cargo, within the framework of trade and transit arrangements, providing additional access to sea for Nepal calling it linking Sagarmatha (Mt. Everest) with Sagar (Indian Ocean).
• Defence Cooperation: Bilateral defence cooperation includes assistance to the Nepalese Army in its modernisation through the provision of equipment and training. India from 2011, every year undertakes a joint military exercise with Nepal known as Surya Kiran.
• Humanitarian Assistance: Nepal lies in the sensitive ecological fragile zone which is prone to earthquakes and floods causing massive damage to both life and money, whereby it remains the biggest recipient of India’s humanitarian assistance.
• Multilateral Partnership: India and Nepal share multiple multilateral forums such as BBIN (Bangladesh, Bhutan, India, and Nepal), BIMSTEC (Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation), Non-Aligned Movement, and SAARC (South Asian Association for Regional Cooperation) etc.

India-Nepal Projects

• Mahakali Treaty (6,480 MW)
• Upper Karnali Project (900 MW)
• Arun Three projects (900 MW)
• Seti River (SR6) project

Challenges

• Territorial Disputes: One of the main challenges in the Indo-Nepal ties is the Kalapani boundary issue. These boundaries had been fixed in 1816 by the British, and India inherited the areas over which the British had exercised territorial control in 1947.
• Issues with Peace and Friendship Treaty: The 1950 Treaty of Peace and Friendship was sought by the Nepali authorities in 1949 to continue the special links they had with British India and to provide them an open border and the right to work in India. But today, it is viewed as a sign of an unequal relationship, and an Indian imposition.
• China’s Intervention: In recent years, Nepal has drifted away from India’s influence, and China has gradually filled the space with investments, aid and loans.
• Internal Security: It is a major concern for India as the Indo-Nepal border is virtually open and lightly policed which is exploited by terrorist outfits and insurgent groups from North Eastern part of India e.g., supply of trained cadres, fake Indian currency.

Way Forward

• 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. India needs to be a sensitive and generous partner for the neighbourhood first policy to take root.
• India should engage more proactively with Nepal in terms of people-to-people engagement, bureaucratic engagement as well as political interactions.