Foreign Policy Watch: India-Nepal

Revitalizing India-Nepal Bilateral Relations through Pragmatism and Cooperation


From UPSC perspective, the following things are important :

Prelims level: India- Nepal cooperation and recent developments in news

Mains level: India-Nepal relations, challenges, Significance of the recent bilateral visits and future prospects


Central Idea

  • Nepal’s democracy, governance, and stability face numerous challenges, along with persistent bilateral irritants with India. However, the recent bilateral visit of Prime Minister Pushpa Kamal Dahal Prachanda to India has highlighted the potential of a pragmatic approach and mutual sensitivity in re-energizing the relationship between the two nations.

The challenge faced by Nepal in depoliticizing cooperation with India

  • Political Influence: Nepal’s domestic political dynamics often influence the country’s engagement with India. Political parties and leaders may prioritize their own interests or use cooperation with India as a political tool, leading to the politicization of bilateral issues and hindering effective collaboration.
  • Water Resources Cooperation: One area where depoliticization is crucial is water resources cooperation. The development of hydropower projects and the management of shared rivers require technical and practical solutions that are free from political interference. Depoliticizing water resources cooperation is essential to ensure long-term sustainability and mutual benefits.
  • Quality of Democracy and Governance: Strengthening the quality of democracy and governance within Nepal is vital to reduce the influence of political factors on bilateral relations. By promoting transparent and accountable governance structures, Nepal can create an environment that prioritizes national interests over political considerations.
  • Perception of Foreign Policy Priority: There is a perception among some in Nepal that India no longer considers the country a foreign policy priority. Addressing this perception and reaffirming Nepal’s importance to India’s foreign policy agenda can help build trust and create a sense of shared ownership in bilateral cooperation.
  • Inclusive Approach: Nepal needs to ensure that cooperation with India is not limited to the government of the day but involves all stakeholders across the political spectrum. Providing a sense of ownership, equality, and credit for major advancements to all parties fosters a more inclusive approach and reduces the politicization of bilateral relations

Significance of the recent bilateral visit

  • Re-energizing Bilateral Relations: The visit signifies a renewed commitment to re-energizing and strengthening bilateral relations between Nepal and India. It highlights the willingness of both nations to address challenges, enhance cooperation, and foster a positive trajectory in their relationship.
  • Comprehensive Review of Bilateral Agenda: Discussions covered various areas such as politics, economics, trade, energy, security, and developmental cooperation, allowing both sides to identify priorities and areas of mutual interest.
  • Addressing Daunting Challenges: Despite the daunting challenges faced by Nepal’s democracy, governance, and stability, the visit demonstrated that pragmatic approaches and mutual sensitivity can help overcome these challenges.
  • Economic Integration: The visit underscored the significance of economic integration between the two nations. Emphasis was placed on “game changers” such as hydropower projects, infrastructure development, tourism circuits, and improved connectivity.
  • Power Sector Cooperation: Cooperation in the power sector, including the transmission passage from Nepal to Bangladesh through India, was an important aspect of the visit. Agreements and efforts to increase power trade and collaboration in this sector have the potential to bring prosperity to the entire sub-region.
  • Digital Connectivity and Space Cooperation: The visit also focused on enhancing digital financial connectivity and regional cooperation in the space sector. Initiatives such as facilitating cross-border digital payments and providing satellite services highlight the potential for collaboration in telecommunication, broadcasting, tele-medicine, tele-education, and other areas.
  • Building Trust and Confidence: The visit helped in building trust and confidence between the leaders of both countries. Reassurances regarding the resolution of differences on border issues and avoiding attempts to justify official versions of the border as the correct one contributes to a more positive atmosphere.

Realistic Handling of Bilateral Issues

  • Political Courage: Despite being in a weak position as the leader of the third-largest party in Parliament, Prachanda demonstrated political courage by considering the costs and benefits of various approaches to bilateral issues.
  • Calculated Decision-making: Prachanda shrewdly calculated the costs of paying heed to political noises cautioning against being soft on irritants like the 1950 Treaty, border differences, and India’s reluctance to receive the report of the Eminent Persons Group (EPG).
  • Listening to Voices of Reason and Moderation: Rather than succumbing to the spectrum of political dissent, Prachanda chose to listen to the few voices of reason and moderation. This approach helped him focus on opportunities for building a better future.
  • Pragmatic Approach: Prachanda’s approach was pragmatic, taking into account the challenges presented by the post-COVID-19 world, current realities, and the significant opportunities for bilateral cooperation.
  • Focus on Opportunities: Instead of getting caught up in political instability and distractions, Prachanda focused on the opportunities for cooperation and collaboration between India and Nepal.

Cooperation in the Power Sector and Digital Connectivity

  • Power Sector Cooperation: The visit highlighted the transmission passage from Nepal to Bangladesh through India, enabling trilateral power transactions. Agreements were made to increase the quantum of power export from Nepal to India to 10,000 MW within a timeframe of 10 years, presenting significant opportunities for economic growth and energy security in the region.
  • Hydropower Projects: The development of hydropower projects in Nepal can not only meet the increasing energy demands of India but also contribute to Nepal’s economic growth. The visit highlighted the importance of hydropower projects that can supply energy to India and potentially to Bangladesh, opening new avenues for regional collaboration and prosperity.
  • Digital Connectivity: The memorandum of understanding (MoU) between the National Payments Corporation of India and the Nepal Clearing House Ltd. facilitates cross-border digital payments, promoting seamless financial transactions and facilitating trade between the two countries.
  • Space Sector Cooperation: India offered to create a ground station and supply user terminals to provide satellite services of the South Asia Satellite to Nepal. This cooperation can have wide-ranging applications in telecommunication, broadcasting, tele-medicine, tele-education, disaster response, and meteorological data transmission. It promotes regional cooperation in space technology and its practical applications across various sectors.

Way ahead

  • Dialogue and Engagement: Sustained and regular dialogue between the leaders and officials of both countries is crucial. This helps address concerns, build trust, and foster a deeper understanding of each other’s perspectives. Regular high-level visits, diplomatic exchanges, and people-to-people interactions can help maintain open channels of communication.
  • Depoliticize Cooperation: Nepal should strive to depoliticize cooperation with India, particularly in critical areas such as water resources management. By prioritizing technical expertise, scientific assessments, and mutual benefits, both countries can work towards sustainable solutions that are not influenced by short-term political considerations.
  • Economic Integration: Enhancing economic integration is vital for strengthening bilateral relations. Efforts should focus on facilitating trade, investment, and cross-border connectivity. Expanding infrastructure, improving border infrastructure, and streamlining customs procedures can promote seamless economic cooperation and foster shared prosperity.
  • People-to-People Exchanges: Encouraging cultural and educational exchanges between India and Nepal can promote greater understanding and friendship at the grassroots level. Encouraging tourism, promoting student exchanges, and facilitating cultural events can contribute to stronger people-to-people bonds.
  • Addressing Perception Issues: India needs to address the perception in Nepal that it is no longer a foreign policy priority. Demonstrating a consistent commitment to bilateral relations, engaging with diverse stakeholders, and providing equal opportunities for cooperation can help overcome this perception and build trust.
  • Collaboration in Regional Forums: Both countries can collaborate within regional forums such as the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). Active participation in these platforms can foster greater regional cooperation and provide opportunities for addressing common challenges.
  • Good Governance and Anti-corruption Measures: Nepal should prioritize good governance and anti-corruption measures. Strengthening institutions, promoting transparency, and curbing corruption will not only enhance domestic governance but also inspire confidence in India and other partners for increased cooperation.


  • Despite the daunting challenges, the recent bilateral visit between the Prime Ministers of Nepal and India highlights the potential for re-energizing their relations through pragmatism and cooperation. By prioritizing development and cooperation, both nations can pave the way for a prosperous future in the sub-region.

Also read:

Diplomatic Dispatch: Nepal Elections and India


Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

Attend Now

Notify of
Inline Feedbacks
View all comments


Join us across Social Media platforms.

💥Mentorship New Batch Launch
💥Mentorship New Batch Launch