Himalayan Friends

Mohammad Asif Khan

In January 2023, Nepal’s inaugurated an international airport in Pokhara, its second after Kathmandu. Yet, it received its first international flight only in June 2023—a chartered flight from China. Until the end of the year, it had operated only seven international flights.

PM Modi with his Nepalese counterpart PM Sher Bahadur Deuba

Constructed with Chinese assistance, through a soft loan, under the Belt and Road Initiative (BRI), the airport became a sticking point in Nepal-India ties, as India denied permission for flights to traverse westward through its airspace, effectively preventing access to the airport. As per media reports, the airport is now burdened with an annual payment of USD 3.2 million as interest on the loan, in addition to covering other operational expenses.

The Pokhara airport seems to have fallen through the widening rift between India and Nepal. Relations which have been on a rollercoaster since the end of the monarchy in 2008, nosedived when defence minister Rajnath Singh inaugurated a road leading up to the Lipulekh Pass at the trijunction of the India-Tibet-Nepal border in May 2020. This was done ostensibly to facilitate the Kailash-Mansarovar yatra. But it was also part of India’s strengthening of border infrastructure on the Line of Actual Control (LAC). Lipulekh region falls in the middle sector of the LAC. Nepal objected to this, insisting that Lipulekh was its territory. And issued maps showing it as part of Nepal.

Shivam Shekhawat, a fellow with ORF’s strategic studies programme says, that issues such as border disputes which can be bilaterally resolved should not come in the way of mutual economic cooperation. “Moreover, concerns about India’s interference in Nepalese politics which pop up ever so often should be bilaterally resolved,” she says. “The economic aspect of the relationship should be the larger concern”.

However, before those concerns could be addressed, India’s Agnipath scheme, rolled out in 2022, further destabilised the delicate ties between the two nations, which have had a history of amicable ties based on trust and traditions.

Historic Relations

India has been a major trade partner for Nepal. The economic and trade ties between Nepal and British India were formalised by the Treaty of Friendship between Nepal and the British Government in 1923, which extended trade and transit facilities to Nepal through India. In the Fifties and Sixties, Nepal traded almost exclusively with India. The total trade volume was small, but India accounted for 95 per cent of Nepal’s foreign trade.

India has also played a pivotal role in influencing key political developments in Nepal, either through direct engagement or indirect means. According to a June 2022 report in The Diplomat, “India played a direct role in the 1950 democratic movement that overthrew the autocratic Rana regime, the 1990 people’s movement that established multiparty democracy, and the 2006 Jana Andolan (people’s movement)-II, which led to the overthrow of the monarchy. Some Nepalis perceive, though not entirely correctly, an Indian hand behind every change in government in Nepal. Even senior leaders allege a conspiracy by India when they are ousted from their position.”

However, India’s 2015 economic blockade of Nepal marked a downturn in relations. The blockade was a result of violent ethnic conflict and concerns about changes to the Nepali constitution. India had expressed its displeasure at Nepal’s constitution. Two ethnic groups, the Madhesi and Tharu people, protested against the new constitution, claiming it marginalized them. Nepal accused India of imposing an undeclared blockade, but India denied this, stating that the supply shortages were due to protests within Nepal. The blockade had a significant impact on Nepal, a landlocked nation that relies on India for its petroleum supplies. Normally, about 300 fuel trucks enter Nepal from India daily, but this number dropped to 5–10 trucks per day during the crisis, choking imports of petroleum.

India has also been at the forefront of providing aid and assistance to Nepal in times of need. Following the devastating earthquake in Nepal in 2015, India wa