The geostrategic powerplay in Nepal between India and China

Sudeep Chakravarti

In late November 2025, another regional niggle played up when Indian media en masse accused Nepal of ‘reigniting’ a bilateral boundary dispute. It had depicted a map—as a watermark on an NPR 100 currency note—which included territory India claims as its own. Indian media also took care to mention that a Chinese company had printed the note.

And by doing so, elevated a dispute that involves a 370sqkm strip along the nearly 1,850km-long India-Nepal border with Nepal into a regional Great Game.

It is a story with layers of assumptions and presumptions. And, of course, an element of India and China’s talk-talk-fight-fight play that skewers Nepal’s foreign policy outlook in the same manner it does for most South Asian countries. But at the core of the dispute lies what I like to term India’s ‘zamindari’ attitude in South Asia that has for decades created space for dissonance. It is the opposite of India’s supplicatory attitude with, say, G7.

The currency flap has brewed for a while. In early May 2024, Nepal’s government announced plans to print new 100-rupee notes with a map that would contain the regions of Lipulekh, Limpiyadhura, and Kalapani in northwestern Uttarakhand state. It followed a decision taken by Nepal’s cabinet over two meetings.

The disputed areas lie along the border with Tibet Autonomous Region (TAR) in China. This adds a supercharged geopolitical layer to an on-again, off-again border dispute between India and Nepal particularly since 1997.

Nepal reinforced that position in 2020 when it updated its official map, citing measurements by the Survey Department of Nepal’s ministry of land management. It followed India’s updating of its own maps in 2019 which show these areas as being within its borders. India even unveiled a road link via Lipulekh for pilgrims to Kailash-Mansarovar in TAR, a move that drew a diplomatic protest from Nepal.

India’s foreign ministry responded to Nepal’s announcement of the proposed currency design. Indeed, more strongly than this ti