India’s treatment: offers Nepali citizens national treatment on its soil. Nepalese are free to come and work in India even in Central government services.
Nepal allows its citizens to serve in the Indian army.
Issue: Delhi’s over involvement in Nepal’s internal affairs fuels the demands in Nepal for breaking the interdependence. Every political churn in Nepal has its resonance in India.
Messiness on political front leads to economic losses of Delhi and Kathmandu.
Steps to be taken: Madhesis fighting for their rights should be addressed.
Nature of the frontier should be changed through trade facilitation, simplifying transit arrangements, removing non-tariff barriers, improving transborder roads and ease of business for Nepali enterprises, and making life easier for Nepali citizens working in India.
China’s role: Political efforts in Kathmandu to construct a political symmetry between relations with Delhi and Beijing. Beijing is trying to overcome its geographic disadvantage through mega projects like the Tibet Railway.
Advantage for India: However, the logic of economic geography tilts Nepal massively towards India. Nepal’s nearest ports will always be in India and the Gangetic plain will remain its largest market.