India - Nepal Relations

Regular reciprocal visits by heads of state/government had been a bilateral tradition between India and Nepal until 1997.
After 1997 India continued to host Nepali leaders, but did not make reciprocal visits.
Indian PM’s visit – Prime Minister Modi had invoked ‘neighbourhood first’ to denote a new beginning in relations, during his visit to Nepal in August 2014.
Nepal PM’s visit – Nepal’s Prime Minister Prachanda earlier visited India twice in 2008 and 2016, the visit in 2023 is his third official visit to India.
The visit in 2023 has delivered many more concrete outcomes than the previous visits and visit marks a more positive and hopeful turn in India-Nepal relations.

How is India-Nepal relationship in the present time?

Hydropower cooperation – Till a decade ago, Nepal was dependent on electricity imports from India.
Now, Nepal has an installed capacity of 2,200 MW, and in season, can export power to India. (452 MW imported to India in 2022)
In the lean season, Nepal does import power from India but its dependence has dropped from 20% to 10% during the last five years.
Power Trade – Targeting the export of 10,000 MW within a 10-year time frame, a long-term power trade agreement has been finalised.
The 900 MW Arun III project started in 2018 by the SJVN (formerly the Satluj Jal Vidyut Nigam) will be operational later in 2023.
A memorandum of understanding (MoU) for the 695 MW Arun IV project was signed in 2022.
New Deals – The two sides signed deals to have Indian Public Sector Undertakings, National Hydro-Power Corporation and Satluj Jal Nigam respectively.
Sub-regional cooperation – India has agreed to the Nepali demand for the facility to export electricity to Bangladesh using the Indian grid.
Connectivity – In 2014 Nepal visit by Prime Minister Modi, to highlight the focus on connectivity, he coined the acronym HIT, covering Highways, Info ways, and Trans ways.
In 2015 the relations took a downturn with the economic blockade.
Check posts – The Rupaidiha-Nepalgunj Integrated Check Post was inaugurated to facilitate the movement of goods and people.
The work begun on the Sunauli-Bhairahawa integrated check post and a MoU was signed for another check post at Dodhara Chandni.
Railways – The Jaynagar-Kurtha railway line was inaugurated last year and there are plans to extend them.
Petroleum Pipeline – The Motihari-Amlekhgunj petroleum pipeline between India and Nepal became operational in 2019 and work has begun to extend it to Chitwan.
A MoU was signed for a new pipeline between Jhapa and Siliguri, which includes terminals and other infrastructure.

What are the points of contention between India and Nepal?

Three difficult issues were not discussed during Prachanda’s India visit.
Treaty issue – In Nepal, conviction has taken root that the 1950 India-Nepal Treaty is unfair as it was imposed somehow.
The India-Nepal Treaty of Peace and Friendship of 1950 was signed in the backdrop of the Maoist revolution in China and the subsequent takeover of Tibet.
The 1950 Treaty, in large measure, reflects the provisions of the 1923 Treaty between Nepal and British India.
The demand to review the Treaty was officially raised first in 1995 and in 1996.
It was on the agenda of the Foreign Secretary’s meeting but substantive talks have not taken place.
Kalapani boundary issue – A constitutional amendment was pushed through in Nepal due to internal political turmoil.
This led to the change in Nepal’s map unilaterally and Kalapani boundary was raised as a national issue.
Notably, India has still not welcomed Nepal’s constitution, promulgated in 2015.
Gurkha army recruitments – The practice of recruiting Gurkha soldiers into The Indian Army’s Gurkha regiment began in 1816 by the British Indian Army.
This was continued under a 1947 treaty based on ‘equal treatment’.
The Agni path scheme impacts the recruitment of Gurkha soldiers into the Indian Army’s Gurkha regiments.
The Agni path revision of the terms needs to be discussed between the two armies and the defence and finance officials concerned.
The Nepali demand is that the Gurkha recruits from Nepal be exempted from the four-year tenure laid down under the scheme.