General Studies Paper 2 (International Relations)
Question:- 151. Outline the importance of the India- Nepal bilateral relations. What are the major areas of tension between both the countries? Answer in 150 words.
Dec 27, 2022


As close neighbors, India and Nepal share unique ties of friendship and cooperation characterized by an open border and deep-rooted people-to-people contacts of kinship and culture. There has been a long tradition of free movement of people across the border. Nepal shares a border of over 1850 km with five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand. The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.



  1. 1. Nepalese citizens avail facilities and opportunities on par with Indian citizens in accordance with the provisions of the Treaty. Nearly 8 million Nepalese citizens live and work in India.
  2. 2. Land-locked Nepal relies heavily on India for the transportation of goods and services. Nepal’s access to the sea is through India, and it imports a predominant proportion of its requirements from and through India.
  3. 3. India is Nepal’s largest trade partner and the largest source of foreign investments, besides providing transit for almost the entire third country trade of Nepal.
  4. 4. India is the foremost development partner of Nepal and this is one of the fundamental pillars of century old ties. The development cooperation covers various sectors — road, rail, health, education, power, which not only aim to improve infrastructure and cross-border connectivity between the neighbours but also serve to make the ties even more people-centric.
  5. 5. Nepal is strategically important for India’s national security as Nepal is right in the middle of India’s ‘Himalayan frontiers’, and along with Bhutan, it acts as a northern ‘borderland’ flanks and acts as buffer states against any possible aggression from China.
  6. 6. Rivers originating in Nepal feed the perennial river systems of India in terms of ecology and hydropower potential.
  7. 7. Many Hindu and Buddhist religious sites are in Nepal making it an important pilgrim site for a large number of Indians.



The following are the major reasons of tension between both the nations:

  1. 1. Territorial Disputes: Ties between the two countries came under severe strain after Kathmandu published a new political map in 2020 that showed the three Indian territories – Limpiyadhura, Kalapani and Lipulekh and the area of Susta (West Champaran district, Bihar) as part of Nepal. These boundaries had been fixed in 1816 by the British, and India inherited the areas over which the British had exercised territorial control in 1947. While 98% of the India-Nepal boundary was demarcated, two areas, Susta and Kalapani remained in limbo.
  2. 2. Issues with Peace and Friendship Treaty: The 1950 Treaty of Peace and Friendship was sought by the Nepali authorities in 1949 to continue the special links they had with British India and to provide them an open border and the right to work in India. But today, it is viewed as a sign of an unequal relationship, and an Indian imposition.
  3. 3. The Demonetisation Irritant: In November 2016, India withdrew Rs 15.44 trillion of high value (Rs 1,000 and Rs 500) currency notes. India’s refusal to accept demonetised bills with the Nepal Rastra Bank and the unknown fate of the report submitted by the Eminent Persons Group (EPG) has not helped in securing a better image in Nepal.
  4. 4. China’s Intervention: In recent years, Nepal has drifted away from India’s influence, and China has gradually filled the space with investments, aid and loans. China considers Nepal a key partner in its Belt and Road Initiative (BRI), and wants to invest in Nepal’s infrastructure as part of its grand plans to boost global trade. Rising Nepal and China cooperation can undermine Nepal’s distinction of a buffer state between India and China.
  5. 5. Internal Security: It is a major concern for India as the Indo-Nepal border is virtually open and lightly policed which is exploited by terrorist outfits and insurgent groups from North Eastern part of India e.g., supply of trained cadres, fake Indian currency.
  6. 6. Trust & Ethnic Differences: Overtime trust deficit has widened between India-Nepal because of the Indian reputation for delaying implementation of various projects. India often faces criticism from its immediate neighbourhood that it holds the development projects but does not deliver on time.
  7. 7. There is anti-India feeling among certain ethnic groups in Nepal which emanates from the perception that India indulges too much in Nepal and tinkers with their political sovereignty.



Irrespective of diplomatic high and low, India and Nepal should give top priority to speed up the development projects which can contribute to maintain cordial ties between two countries. No matter which government comes to power in Kathmandu, the bilateral ties between Nepal and India need to remain strong due to the cultural, economic and social proximity between the two countries.