The Future of India – Nepal Relations: Problems and Prospects

16 Nov, 2000    ·   433

Report of IPCS Seminar held on 15 Sept 2001

Dr. Lama initiated the discussion on India-Nepal relations. According to him, there is a  structural and strategic transformation of bilateral relations due to the following factors. First, the restoration of multi-party democracy in Nepal . This transformation in the 1990s, instead of leading the ties between the two countries to a higher plane, actually has affected relations because of internal pulls inside Nepal . Anti-Indian sentiments were exploited by all the political parties for their own political purposes, leading to a deterioration of relations between the two countries.



Secondly, the globalisation process, market expansion and the need for the management of natural resources, especially for Nepal has increased the need for better relationship between the two countries. Thus, though the internal political factors hinder the relationship between the two countries, larger economic factors, in the future may force both the countries towards a better understanding.



Thirdly, especially inside Nepal , there is a paradigm shift in the strategic framework. There is an enormous pressure from the  non-state actors – the various Non Governmental Organisations (NGOs) working on social, economic and environmental issues on Nepal ’s foreign policy options especially towards India .



Economic and Environmental Issues 



The first issue that dominates the Indo-Nepal economic relations is the Balance of Trade, favoring India . Ninety-five percentage of Nepal ’s trade is conducted through the Calcutta port, nearly 40 percentage of the employment generated in Nepal is through Indian investments and India remains the major investor in Nepal . On environmental issues, though the Mahakali Treaty is a major landmark between the two countries, nothing significant has been achieved after the signing of the treaty. The principles surrounding the treaty itself have become controversial in Nepal as the political parties inside Nepal are criticizing India , though the non state actors are pushing through for the implementation of the treaty.



Political Issues



There are two major political issues between India and Nepal . First is the amendment or the abrogation of the 1950 Treaty between both the countries. Though there have been talks inside Nepal , till today India has not received any formal communication from Nepal regarding the issue. The second pertains to the ISI activities in Nepal against India .



Today in Nepal there is no constituency for India , which once used to be very strong comprising especially of academicians who were educated in India and military personnel, who had close relations with Indian Army. India should nurture this constituency to counter anti-India elements inside Nepal .









·                     What is Nepal Government’s attitude towards ISI and demographic change in Terai?



·                     Elaborate on Maoists and their linkages. Why they are anti-India in their ideology?



·                     Are the proliferating NGOs in Nepal local or foreign? From where does their financial support come?



·                     What is the role of Monarchy in the Indo-Nepal relations?



·                     What are the changes in the Nepalese threat perception from India ?



·                     Of late, the growth of Muslim population in Nepal is rapid. There is also increase in Muslim NGOs with the help of funds from West Asia . Because of this the Islamic linkages with Pakistan are increasing. What would be the implications for bilateral relations?



·                     What are the leverages that India could have vis-a-vis Nepal and how to go about it?








·                     The focus of the talk is more on the economy. But there are other factors too. Especially, the internal dynamic of change of government and instability in Nepal is also responsible for the strain in bilateral relations. As there are many dissentions at both intra-party and inter-party levels there is no consistency in the Nepalese policy towards India



·                     The 1959 Indo-Nepal Friendship Treaty has four separate elements—political, economic, people-to-people and security. Kathmandu never wanted it to be abrogated, but only to be amended. However, there is no official proposal for the amendment. This is mainly due to lack of consensus within the government. The main area of amendment they wish is on “special clause”, as they are extremely sensitive about it. 



·                     Delay in ratification of bilateral treaties by Nepal has been a bone of contention between India and Nepal . This is mainly due to the presence of Article 127 (2) in the Nepalese Constitution. The ratification of the Mahakali Treaty is delayed because of its linkage with Kalapani.



·                     The presence of anti-Indianess in Maoists of Nepal is also due to instigation by the foreign hand in the movement. Of late, the Maoist insurgency has no connection with the backwardness in Nepal .



·                     The faults for the strain in relations also partly lie on our side. We started economic blockade in 1980s but failed to develop leverages vis-a-vis Nepal . We also failed to tap the economic resources of Nepal . This is mainly due to lack of effective working of our political mechanisms in Nepal .



·                     It is not that Nepal is encouraging ISI activities in its soil. In fact, it wants to curb the activities but lacks the mechanism to do so. The other factor is political instability. The Nepalese Government has been busy surviving and hence, it has no time for other matters.



·                     Anti-Indianism is not new in Nepal . The higher echelons are clear about their relations with India .






·                     In 1960s the Nepalese King made two policy interventions: (i) that Nepalese currency will rule in all parts of Nepal ; and (ii) the settlement of people from then highlands in the Terai region. In the 1990s also same policy interventions were made, but now the actor was Pakistan .



·                     Despite having the biggest embassy in Nepal , Indian diplomatic activity is lacking in the Hindu Kingdom . This is mainly due to a large degree of ignorance regarding the functioning of Nepal ’s internal dynamics. 



·                     As far as Bhutanese refugees are concerned, India is playing a shortsighted game. New Delhi should have realised the intensity of the issue, but has failed.



·                     Nepalese Monarchy is basically cautious about Indian interests. After the monarchy was restored in 1960 the first country to be visited by the Nepalese King was not India but China . The successive Kings coined terms like “equi-distance” and “zone of peace”, which explicitly meant to maintain distance from India . On the other hand, Nepal became very active in its China policy. Chinese entrepreneurs were allowed to do business in the Terai region; a proposal for opening another trading route and laying two more roads were made.