India-Nepal relations

Source-This post on India-Nepal relations has been created based on the article “Amid Nepal’s continuing political turmoil, confidence vote win for PM Prachanda, the task for India” published in “The Indian Express” on 18 March 2024.

UPSC Syllabus–GS Paper-2-International relations– India and its Neighborhood- Relations.

News– Nepal’s Prime Minister Pushpa Kamal Dahal Prachanda has recently won a vote of confidence in the 275-member lower house of Parliament recently. India-Nepal relations UPSC.

What is the status of India-Nepal trade relations?

1) India is Nepal’s largest trade partner, with bilateral trade crossing $7 billion in FY 2019-20. Further, India provides transit for almost all of Nepal’s trade with third country.
2) Indian exports to Nepal have grown more than eight times over the past decade, while exports from Nepal have almost doubled.

What are areas of cooperation between India and Nepal?

1) Humanitarian aid – During the Covid-19 pandemic, India aided more than $7 million to Nepal. This included the supply of more than 23 tones of medicines and medical equipment, more than 9.5 million doses of vaccines, and a medical oxygen plant.

2) People to people exchange-About 8 million Nepalese citizens live and work in India, and some 6 lakh Indians live in Nepal. Indians are about 30% of foreign tourists in Nepal. The bilateral remittance flow is estimated at $3 billion from Nepal to India, and $1 billion in the opposite direction.

A detailed article on India-Nepal Relationship can be read here.

What is the impact of political instability in Nepal on India?

1) Rise of Anti-India stance– The new partner in the government is K P Sharma Oli’s Communist Party of Nepal (Unified Marxist-Leninist) which is known to have anti-India sentiments. For ex- During infamous trade blockade, Oli the then Prime Minister, portrayed India as the neighborhood bully in his country.

2) Pro China tilt-China has been pouring aid and investment in infrastructure to take Kathmandu away from New Delhi. Nepalese imports from China have almost tripled from last few years. With Oli, who has clear China leanings, back in government in Nepal, India will have to be more vigilant.

India must keep people of Nepal at its Centre. It must ensure that China or its proxies do not get an opportunity to increase suspicion against India. More than an “elder brother”, India should try to be an equal partner for Nepal.

Question for practice

What will be the impact of new political change in Nepal on India’s interest?