India needs to nurture its relationship with Nepal in the spirit of magnanimity
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.
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 was quick to provide assistance, launching its largest disaster relief operation abroad, named Operation Maitri1. India sent an emergency aid package, including medical equipment and relief materials, to Nepal. A special Indian Air Force flight transported over 11 tonnes of emergency relief materials, including tents, tarpaulin sheets, blankets, sleeping bags, as well as essential medicines and medical equipment. In addition to immediate relief, India also provided long-term assistance for post-earthquake reconstruction in the housing, education, health and cultural heritage sectors, including the reconstruction of 50,000 houses in Nepal’s Gorkha and Nuwakot districts.
Territorial Dispute
The border dispute in the Lipulekh region has been a contentious issue between India and Nepal. The dispute primarily revolves around the Kalapani-Limpiyadhura-Lipulekh trijunction between India, Nepal, and China, and the Susta area in Bihar.
The Kalapani region, part of Uttarakhand’s Pithoragarh district, is strategically located at a height of over 20,000 feet and serves as an observation post for India. The Kali River in this region demarcates the border between India and Nepal. Discrepancy in locating the source of the Kali River has led to boundary disputes, with each country producing maps supporting their claims. Nepal asserts that the Kali River originates from a stream at Limpiyadhura, northwest of Lipulekh, making Kalapani, Limpiyadhura and Lipulekh part of Nepal’s Dharchula district. Consequently, in May 2020, Nepal released a new political map claiming Kalapani, Limpiyadhura and Lipulekh as part of its territory. “The border dispute in the western part of Nepal has been an irritant,” says Kosh Raj Koirala, a journalist from Nepal, “The tensions escalated when India constructed a road to Lipulekh.”
India rejected Nepal’s new map, stating that it involved artificial enlargement of territories not based on historical facts and evidence. Says Shekhawat, “Nepal’s unilateral decision was intended to push India into resuming the conversation around the boundary dispute and in a way challenged the status quo that had existed for so many decades.”
In 2022, the unresolved issue flared up again when Prime Minister Narendra Modi spoke of expanding a road via disputed Lipulekh to Manas Khand, the gateway to Kailash Mansarovar, a Hindu pilgrimage site in Tibet. This statement sparked protests in Nepal, leading to diplomatic unpleasantness between the two countries.
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