Essay on the relation between India and Nepal


The Indo-Nepal Treaty of Peace and Friendship of 1950 is a bilateral treaty between Nepal and India establishing a close strategic relationship between the two South Asian neighbours.

The treaty was signed on July 31, 1950 by the then Prime Minister of Nepal Mohan Shamsher Jang Bahadur Rana and Indian ambassador to Nepal, Chadreshwar Narayan Singh.

The treaty allows for the free movement of people and goods between the two nations and a close relationship and collaboration on matters of defence and foreign affairs. While India values the treaty as deflecting the influence of its regional competitor, the People’s Republic of China, the treaty has been unpopular in many segments of Nepal, which often regards it as a breach of its sovereignty.


The Indo-Nepal Treaty of Peace and Friendship provided for an open border between the two nations, permitting free and unrestricted travel of people and goods and allowing the immigration of Indians to Nepal and of Nepalese people to India, granting equal rights to them. Both nations agreed to respect each others territorial integrity and independence.

The treaty also facilitated extensive cooperation on strategic issues, with both nations required to consult each other on affairs of regional security; while India was obligated to actively assist Nepal in national defence and military preparedness, and both nations resolved not to tolerate threats to each others security.

Economic assistances to Nepal.

In the field of economic assistance, by 1967, India had extended over Nepalese Rupees 50 crores for Nepal’s economic development and had pledged another Rs. 40 crores. India was the single largest donor by 1967.


Road building and power development were two major areas in which India assisted Nepal. India also helped Nepal in the construction of the Kingdom’s first airport at Kathmandu. But by this time China had become an important factor in Nepal’s economic and political relations. King Mahendra reaffirmed Nepal’s decision to stay neutral between India and China. For India, however, China factor in Nepal’s foreign policy had opened a dangerous situation.

In the meantime, anti-India demonstrations were repeatedly held in Nepal. Nepal made public demands for the withdrawal of Indian personnel from the northern check posts and its military liaison group in Kathmandu.

The demand of withdrawal, however, was contrary to treaty provisions and Nepal was questioning the very basis of Indo-Nepalese relationship. It was believed in New Delhi that the Palace was trying to play China against India and now even Pakistan against it.

However, by early 1971 Nepal realised the futility of anti-India campaign. Eventually that would have hurt Nepal’s own economy. Negotiations were opened and a New Treaty of Transit was signed in Kathmandu in August 1971. Thus, by the end of 1971, Indo-Nepal realisation started looking brighter.


King Birendra succeeded his father Mahendra when the latter died in early 1972. Under his reign, Nepal began to work for better and normal relations with India. Participated in Nepal’s development of power and irrigation, the major projects being the Kosi, the Gandak, the Kamali, the Trisuli and the Devighat and Pokhra Hydel projects.

India and Nepal planned the harnessing of Himalayan Rivers. There were Indian aid and corporation activities in areas such as road building, airport construction, telecommunications, horticulture, agriculture, forestry, education and health.

The friendly relations with Nepal were further consolidated after Mrs. Gandhi returned to power in 1980. King Birendra visited India in 1981 and the visit was returned by President Sanjiva Reddy the same year.

However, being a big power, and a neighbour of Nepal, China had been taking keen interest in Nepal. China had been trying to widen the rift between India and Nepal whenever tension developed in the bilateral relations. However, India continued to be Nepal’s main trading partner.


During 1984-85 Nepal’s 52 per cent of total export-import trade was with India. Most of the goods produced in India and needed by Nepal are usually made available without much difficulty. Economic relations between the two countries improved on account of liberalisation of their economies since 1991.

The Treaty of Trade and Transit of 1991 and their amendments in 1993 have also had positive results. During 1992-94 period India’s commitment to Nepal’s economic development continued to be expressed through various programmes.

India and Nepal signed a treaty on the development of Mahakali Project during Prime Minister Deuba’s visit to India in February, 1996. This project represents a major breakthrough in the harnessing of river waters for mutual benefit.

The two countries are working through Joint Technical Level India-Nepal Boundary Committee on a time bound programme for identification of boundary. Thus India’s hand of friendship remains extended to Nepal.

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