Foreign Policy-India-Nepal Relations

India-Nepal Relations

India-Nepal Border

Nepal has an area of 1,47,181 sq. kms. and a population of 29 million. It shares a border of over 1850 kms in the east, south and west with five Indian States – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand. People residing in the border districts on both sides share deeper cultural bonds.

Basis of India-Nepal Friendship

The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal. Under the provisions of this treaty, the Nepalese citizens have enjoyed unparalleled advantages in India, availing facilities and opportunities at par with Indian citizens. At present, nearly 6 million Nepali citizens live and work in India.

To foster the bilateral relations, India and Nepal have several bilateral institutional dialogue mechanisms, including the India-Nepal Joint Commission. The Joint Commission is chaired by the foreign ministers of both the countries. The Fourth Joint Commission Meeting was held on 26-27 October 2016 in New Delhi.

Economic Relations

Bilateral Trade: 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 total external trade of Nepal in year 1995-96 has reached 61.2% in 2015-16. The bilateral trade grew from Rs. 1,755 crores in 1995-96 to Rs.32294 Crores (USD 4.8 billion) in 2015-16. 
Exports from Nepal to India increased from Rs. 230 crores in 1995-96 to Rs.2468.3 crores (USD 371 million) in 2015-16. Similarly, India’s exports to Nepal increased from Rs. 1,525 crores in 1995-96 to Rs.29825.7.6 crores (USD 4.48 billion) in 2015-16.

Nepal’s main imports from India are petroleum products (13.7%); motor vehicles and spare parts (13.1%).

Indian Investment in Nepal: Indian firms are the biggest investors in Nepal, accounting for about 40% of the total approved foreign direct investments. At present, there are about 150 Indian ventures operating in Nepal. They are engaged in manufacturing, banking, insurance, dry port, education, telecom), power sector and tourism industries.

Cooperation in Water Resources

Cooperation in Water Resources, primarily concerning the common rivers, is one of the most important areas of our bilateral relations. This cooperation has immense potential as it is estimated that around 250 small and large rivers flow from Nepal to India and constitute an important part of the Ganges river basins.

These rivers have the potential to become major sources of irrigation and power for Nepal and India, but without planning, are a source of devastating floods in Nepal’s Terai region and the Indian States of Bihar and Uttar Pradesh.

In 2008, a three–tier bilateral mechanism was established to discuss issues relating to cooperation in water resources and hydro power between the two countries. However, a permanent solution to flood problem has not been found evident from the impact of floods in 2013 and 2017 in Bihar. While the 2013 flood in Bihar affected more than 5.9 million people in 20 districts,  floods in the last couple of months caused death of 514 people. This flood was result of sudden increase in water discharge through rivers- Gandak, Burhi Gandak and Bagmati , Kamla, Kosi and Mahananda- due to heavy rain in the catchment areas of the major rivers of north Bihar in Nepal.

India’s Development Assistance to Nepal

India provides substantial financial and technical development assistance to Nepal, with a focus on the creation of infrastructure, health, water resources, education, rural and community development. India announced 250 million dollars as grant and 750 million as credit for post-quake reconstruction. The assistance was announced in the wake of over 10,000 deaths and severe damage to the infrastructure by a series of powerful earthquakes in April-May 2015.

Defence Cooperation

India has played a leading role in helping the Nepalese Army (NA) in its modernization through provision of equipment and training. More than 250 training slots are provided every year for training of NA personnel in various Indian Army Training institutions. Besides, both the countries regularly joint military exercises – Surya Kiran.

The Gorkha Regiments of the Indian Army are raised partly by recruitment from the hill districts of Nepal. Currently, about 32,000 Gorkha Soldiers from Nepal are serving in the Indian Army. It is interesting to know that, since 1950, India and Nepal have been awarding Army Chiefs of each other with the honorary rank of General in recognition of mutual harmonious relationship between two armies.

In addition to the above mentioned areas of cooperation, the provision for 3000 scholarships to Nepali nationals for various courses in India, people-to-people contacts, cooperation in the areas of art, culture, and media better illustrate the extent of the depth of cooperation between India and Nepal.

India-Nepal current relations

In recent years, India-Nepal bilateral relations have been influenced and defined by growing China-Nepal relations, the ongoing constitutional reforms and largely the political party in power in Nepal. Some of the positive developments are -

• On 24 August 2017, during the visit of Nepal Prime Minister Sher Bahadur Deuba to India, both the countries signed eight agreements to boost bilateral relations. The agreements cover various areas of cooperation, including, connectivity, prevention of drug trafficking and post-earthquake reconstruction in Nepal. It was first overseas visit of Sher Bahadur Deuba after assuming the office in June 2017.

• India facilitated the transition of Nepal to democratic, republic and secular nation through the adoption of a new constitution. The transition had never been smooth and few sections of the civil society and few political parties viewed India as a Big Brother.

• The focus of the present relations is on improving connectivity. At present, India is involved in the construction of various connectivity projects worth Rs 5,253 crore, which would benefit both India and Nepal. The projects include a 300 km road from Kakarwaha to Varanasi entailing Rs 1,499 crore investment besides a Rs 1,338 crore project for linking Rupaidiha to Barabanki.

• The Indo-Nepal Army Battalion level Joint Exercise Surya Kiran XI was successfully conducted at the Pithoragarh area of Uttarakhand in March 2017.

Nevertheless, India-Nepal bilateral relations have come greater stress due to the following incidents in the recent past.

The September 2015 Nepal Blocade incident also created a negative sentiment in Nepal. The political parties accused India for causing the crisis, which affected the normal life in the landlocked country. In fact, this blockade compelled Nepal to sign an agreement in October 2015 with China to facilitate fuel imports.

As stated above, China’s role in the economy and the polity has been growing in recent years. Nepal is the buffer State between India and Nepal. The first ever joint military exercise ‘Sagarmath Friendship’ in April 2017, China’s acceptance of Nepal’s proposal for rail and road connectivity in May 2017 and the undeclared competition to host first overseas official tour of Nepal’s Prime Minister are the indications of the growing role of China in deciding the fate of India Nepal bilateral relations.

Conclusion

Despite the above mentioned strains in the bilateral relations, strong people-to-people contacts, thousands of years of relations between the societies, cultural and familial ties and geographical proximity have been sustaining the diplomatic relations between India and Nepal. The leaders of both the countries should come up with more pro-active measures to unleash the growth potential of both countries by utilizing the natural and human resources in an effective manner.