India-Nepal Relations and the Path to Rebuilding Trust

India-Nepal Relations and the Path to Rebuilding Trust

India-Nepal Relations and the Path to Rebuilding Trust


The recent official visit of Nepal Prime Minister Pushpa Kamal Dahal ‘Prachanda’ to India and its significance in the context of India-Nepal relations and highlights the positive outcomes of the visit and the avoidance of controversial issues, focusing on the economic ties between the two countries.

Relevance: GS-02 (International relations, Governance)

Mains Questions:

  1. Examine the dimensions and challenges in enhancing connectivity between India and Nepal, and discuss its implications for trade, tourism, and cultural exchanges. (250 words)
  2. Discuss the significance of hydropower cooperation between India and Nepal in the context of regional energy security and economic development. (150 words)

Major Issues Related to India-Nepal Relations?

India-Nepal Treaty of Peace and Friendship: The 1950 treaty between India and Nepal has been a longstanding issue. Nepal claims that the treaty was imposed on them and seeks its review and update. The treaty grants Nepali nationals equal treatment in terms of employment in India, except for certain services. This issue has been a point of contention and a demand for its revision has been raised by Nepal.

  • Hydropower Cooperation: There has been progress in hydropower cooperation between India and Nepal. Nepal has a significant hydropower potential of 50,000 MW, but its installed capacity was only 1,200 MW a decade ago. Efforts have been made to increase capacity, and Nepal now has an installed capacity of 2,200 MW. Both countries have finalized long-term power trade agreements to export 10,000 MW within a 10-year timeframe.
  • Connectivity Initiatives: Enhancing connectivity between India and Nepal has been a focus. Various initiatives have been undertaken, such as the construction of high voltage transmission lines, integrated check posts, and railway lines. These initiatives aim to facilitate the movement of goods, people, and energy between the two countries.
  • Border Management and Security Cooperation: Border management and security cooperation have been important aspects of India-Nepal relations. Cooperation and coordination between the two countries’ armies play a crucial role in maintaining peace and security along the border.
  • Economic Ties and Regional Stability: Strengthening economic ties between India and Nepal is significant for both countries. It contributes to regional stability, promotes trade, boosts investment opportunities, and fosters overall economic growth in the region.

Dimensions of the article:

  • Strengthening Hydropower Cooperation.
  • Enhancing Connectivity.
  • Addressing Controversial Issues
  • How this affects India

Strengthening Hydropower Cooperation.

Nepal’s rich hydropower potential and India’s growing energy needs have created opportunities for cooperation in the sector. In addition to the progress mentioned in the article, there are several other dimensions to consider:

  • Economic Benefits:  Nepal’s abundant hydropower resources can be harnessed to meet its own energy needs and also export surplus power to India, thereby contributing to Nepal’s revenue generation and economic growth. On the other hand, India can reduce its dependence on fossil fuels and import of electricity by tapping into Nepal’s hydropower potential.
  • Regional Power Integration: Cooperation in the hydropower sector also opens avenues for regional power integration. With the establishment of cross-border transmission lines and power trade agreements, India and Nepal can further expand their collaboration by integrating their power grids. This would enable the exchange of electricity not only between the two countries but also with other neighboring countries, fostering greater regional energy security and cooperation.
  • Environmental Sustainability: Hydropower is a clean and renewable energy source, and its development in Nepal can contribute to environmental sustainability. By reducing dependence on fossil fuels, hydropower projects can help mitigate greenhouse gas emissions and combat climate change.

Enhancing Connectivity

Connectivity plays a vital role in promoting trade, people-to-people exchanges, and overall regional integration. Alongside the initiatives mentioned in the article, additional dimensions to consider include:

  • Trade Facilitation: Improved connectivity through the establishment of integrated check posts, such as the Rupaidiha-Nepalgunj Integrated Check Post, can streamline cross-border trade and enhance economic cooperation. Efforts should be made to simplify customs procedures, reduce trade barriers, and promote investments, enabling smoother movement of goods and boosting bilateral trade between India and Nepal.
  • Tourism and Cultural Exchanges: Enhanced connectivity also promotes tourism and cultural exchanges between the two countries. By improving transportation links, such as the extension of railway lines and the development of road networks, India and Nepal can facilitate greater tourist flow, promoting economic growth in the tourism sector. Additionally, cultural exchanges can foster mutual understanding and strengthen people-to-people ties, further solidifying the historical and cultural bonds between the two nations.
  • Digital Connectivity: In the era of digitalization, digital connectivity assumes significance. Collaborative efforts in expanding internet infrastructure, promoting digital literacy, and facilitating cross-border digital services can unleash the potential of the digital economy and open up new avenues for cooperation between India and Nepal. This dimension of connectivity can contribute to inclusive growth, e-governance, and bridging the digital divide.

Addressing Controversial Issues

In addition to the three issues mentioned in the article, there are other contentious matters that require attention and resolution:

  • Border Management: Strengthening border management mechanisms and resolving border-related disputes is crucial for maintaining peace and security between India and Nepal. Collaborative efforts should be made to demarcate and manage the border effectively, addressing concerns related to border encroachments, illegal activities, and smuggling.
  • Water Resources Management: Water resources, including shared rivers, pose challenges and opportunities for India and Nepal. Collaborative frameworks for water resources management, including the equitable sharing of water, flood control measures, and joint river basin management, can help alleviate potential conflicts and foster sustainable utilization of water resources.
  • Cross-Border Security Cooperation: Given the geographical proximity and historical ties between India and Nepal, cross-border security cooperation is vital for addressing common security challenges such as terrorism, trans-national crime, and border security. Strengthening intelligence sharing, joint training exercises, and coordination between law enforcement agencies can contribute to enhanced security in the region.

How this affects India

Enhanced cooperation between India and Nepal has significant implications for India:

  • Energy Security: Cooperation in the hydropower sector allows India to diversify its energy sources and reduce dependence on fossil fuels. Access to Nepal’s hydropower potential helps India meet its growing energy demands, contributing to long-term energy security.
  • Economic Growth: Strengthened economic ties and improved connectivity between India and Nepal create opportunities for trade, investment, and economic growth. Increased bilateral trade and investment can benefit Indian businesses and contribute to job creation and economic development in both countries.
  • Regional Stability: A stable and cooperative relationship with Nepal is crucial for maintaining regional stability in South Asia. By addressing contentious issues, fostering mutual trust, and promoting regional integration, India can contribute to stability and peace in the region.


The recent visit of Prime Minister Prachanda to India has yielded positive outcomes, highlighting the potential for enhanced cooperation between the two countries. It is crucial to sustain efforts in strengthening the bilateral relationship by focusing on key dimensions such as hydropower collaboration, connectivity initiatives, and addressing contentious issues.