India–Nepal relations

The foundation of relations between India and Nepal was laid with the Indo-Nepalese friendship Treaty in 1950. In the 1950s, the Rana rulers of the Kingdom of Nepal welcomed close relations with the newly independent India, fearing a China-backed communist overthrow of their autocratic regime after the success of Communist revolution in China and establishment of CCP government on October 1, 1949. Rana rule in Nepal however collapsed within three months of signing the 1950 Indo-Nepal Treaty of Peace and Friendship, to be replaced by the only pro-Indian party of the time – Nepali Congress. As the number of Indians living and working in Nepal's Terai region increased and the involvement of India in Nepal's politics deepened in the 1960s and after, so too did Nepal's discomfort with the special relationship. India's influence over Nepal increased throughout the 1950s. The Nepalese Citizenship Act of 1952 granted Indians the right to immigrate to Nepal and acquire Nepalese citizenship without any difficulty, which caused resentment in Nepal. This policy remained in effect until 1962, when several restrictive clauses were added to the Nepalese constitution.[3] Further, in 1952, an Indian military mission was established in Nepal, which consisted of a Major General and 20 other Indian army personnel, which was later extended to 197 in total.[3] At the same time, Nepal's Royal family's dissatisfaction with India's growing influence began to emerge. As a consequence, overtures to China were initiated by Nepal as a counterweight to India.[3]

The Treaty of Trade and Commerce between the two countries was ratified in October 1950, wherein India acknowledged Nepal's right to import and export commodities through the Indian territories and ports. As per the treaty, customs duties could not be levied on commodities that were in transit through India.[3]

Following the 1962 Sino-Indian border war, the relationship between Nepal and India thawed significantly. India suspended its support to India-based Nepalese opposition forces, opposing the dissolution of democratic government by King Mahendra. The defeat of Indian forces in 1962 in a border war with China, provided Nepal with the much-needed breathing space and Nepal extracted several concessions in trade with India. In exchange, through a secret accord concluded in 1965, similar to an arrangement that had been suspended in 1963, India won a monopoly on arms sales to Nepal.[4]

In 1969, relations between both countries again became stressful as Nepal challenged the existing mutual security arrangement and asked that the Indian security checkposts and liaison group be withdrawn. Resentment also was expressed against the 1950s TPF. India withdrew its military check-posts and liaison group consisting of 23 military personnel in 1970 from all but Kalapani area of Nepal, although the treaty was not abrogated.[4][5]

Tensions further increased in the mid-1970s, when Nepal pressed for substantial changes in the trade and transit treaty and openly denounced Sikkim's 1975 annexation by India. In 1975 King Birendra Bir Bikram Shah Dev against the backdrop of Indian annexation of Nepal's close neighbor the Kingdom of Sikkim proposed Nepal to be recognized internationally as a 'Zone of Peace' where military competition would be off limits. Nepal's proposal immediately received support from Pakistan and China, but not from India.[3] In New Delhi's view, if the king's proposal did not contradict the 1950 treaty that the-then Indian government had signed with the Rana rulers of Nepal, it was unnecessary; if it was a repudiation of the special relationship, it represented a possible threat to India's security and could not be endorsed. In 1984 Nepal repeated the proposal, but there was no reaction from India. Nepal continually promoted the proposal in international forums and by 1990 it had won the support of 112 countries including the US, the UK, and France.[6]

In 1978 India agreed to separate trade and transit treaties, satisfying a long-term Nepalese demand. However, much to the annoyance of Nepalese Royal Palace and in continued violation of the 1950s PFT, India consistently allowed the opposition parties of Nepal to use Indian soil to launch agitation against the Nepalese government and refused to endorse Nepal as a Zone of Peace. In 1988, when the two treaties were up for renewal, Nepal refused to accommodate India's wishes for a single trade and transit treaty stating that 'it violates the principle of freedom to trade'. Thereafter, both India and Nepal took a hard-line position that led to a serious crisis in India–Nepal relations. Nepalese leaders asserted the position that as per the UN charter, transit privileges were "a fundamental and a permanent right of a land-locked country" and thus India's demand for a single treaty was unacceptable.[7] After two extensions, the two treaties expired on 23 March 1989, resulting in a virtual Indian economic blockade of Nepal that lasted until late April 1990.[8]

Over the years, Indian economic sanctions over Nepal steadily widened. For example, preferential customs and transit duties on Nepalese goods entering or passing through India (whether imports or exports) were discontinued. Thereafter India let agreements relating to oil processing and warehouse space in Calcutta for goods destined to Nepal expire. Aside from these sanctions, India cancelled all trade credits it had previously extended to Nepal on a routine basis.[3]

To withstand the renewed pressure from India, Nepal undertook a major diplomatic initiative and presented its case on trade and transit matters to the world community.[9]

In 1989, Nepal decoupled its rupee from the Indian rupee which had been circulating in Nepal freely. This further strained the relationship between the two countries. India retaliated to this move by Nepal and denied port facilities in Calcutta to Nepal, thereby preventing delivery of oil supplies from Singapore and other source countries.[3] In historian Enayetur Rahim's view, "the economic consequences of the dispute... were enormous. Nepal's GDP growth rate plummeted from 9.7% in 1988 to 1.5% in 1989.[9] This had a lot to do with the decreased availability of goods. Shortly after the imposition of sanctions, Nepal experienced serious deficiencies of important goods such as coal, fuel, oil, medicine and spare parts.[3] Nepal also suffered economically from higher tariffs, the closure of border points and the tense political atmosphere. From one of the most thriving economies in Asia, Nepal was now quickly finding itself in the league of World's poorest nation." Although economic issues were a major factor in the two countries' confrontation, Indian dissatisfaction with Nepal's decision to impose work permits over Indians living in Nepal and Nepal government's attempt to acquire Chinese weaponry in 1988 played an important role.[8] India linked security with economic relations and insisted on reviewing India–Nepal relations as a whole. After failing to receive support from wider international community, Nepalese government backed down from its position to avoid the worsening economic conditions. Indian government, with the help of Nepalese opposition parties operating from India, managed to bring a change in Nepal's political system, in which the king was forced to institute a parliamentary democracy. The new government, led by pro-India parties, sought quick restoration of amicable relations with India.

The special security relationship between New Delhi and Kathmandu was re-established during the June 1990 New Delhi meeting of Nepal's prime minister Krishna Prasad Bhatarai and Indian prime minister V.P. Singh, after India ended its 13-month-long economic blockade of Nepal. During the December 1991 visit to India by Nepalese prime minister Girija Prasad Koirala, the two countries signed new, separate trade and transit treaties and other economic agreements designed to accord Nepal additional economic benefits.

Indian-Nepali relations appeared to be undergoing still more reassessment when Nepal's prime minister Man Mohan Adhikary visited New Delhi in April 1995 and insisted on a major review of the 1950 peace and friendship treaty which Nepal believed was enabling an ongoing demographic shift in Nepal's Terai region.[10] In the face of benign statements by his Indian hosts relating to the treaty, Adhikary sought greater economic independence for his landlocked nation while simultaneously striving to improve ties with China.

In June 1990, a joint Kathmandu-New Delhi communique was issued pending the finalisation of a comprehensive arrangement covering all aspects of bilateral relations, restoring trade relations, reopening transit routes for Nepal's imports, and formalising respect of each other's security concerns.[11]

The communiqué announced the restoration of the status quo ante along with the reopening of all border points. Nepal agreed to various concessions regarding India's commercial privileges. Kathmandu announced that it factored in the lower cost while purchasing arms and personnel carriers from China. Nepal was advising China to withhold delivery of the last shipment. As per the declaration made by the communiqué, both countries would cooperate in the industrial development and waters coming from their common rivers would be harnessed for mutual benefit for both the countries, while also protecting and managing the environment.[3]

In 2005, after King Gyanendra took over, Nepalese relations with India soured. However, even after the restoration of democracy, in 2008, Prachanda, the Prime Minister of Nepal, visited India, in September 2008 only after visiting China, breaking the long-held tradition of Nepalese PM making India as their first port-of-call. When in India, he spoke about a new dawn, in the bilateral relations, between the two countries. He said, "I am going back to Nepal as a satisfied person. I will tell Nepali citizens back home that a new era has dawned. Time has come to effect a revolutionary change in bilateral relations. On behalf of the new government, I assure you that we are committed to make a fresh start."

In 2006, the newly formed democratic parliament of Nepal passed the controversial citizenship bill[12] that led to distribution of Nepalese citizenship to nearly 4 million stateless immigrants in Nepal's Terai by virtue of naturalisation.[13] While the Indian government welcomed the reformed citizenship law, certain section of Nepalese people expressed deep concerns regarding the new citizenship act and feared that the new citizenship law might be a threat to Nepalese sovereignty. The citizenship bill passed by the Nepalese parliament in 2006 was the same bill that was rejected by King Birendra in 2000[14] before he along with his entire family was massacred and upon which Indian government had then formally expressed sorrow.

In 2008, Indo-Nepal ties got a further boost with an agreement to resume water talks after a 4-year hiatus.[15][16] The Nepalese Water Resources Secretary Shanker Prasad Koirala said the Nepal-India Joint Committee on Water Resources meet decided to start the reconstruction of the breached Koshi embankment after the water level went down.[17] During the Nepal Prime Minister's visit to New Delhi in September, the Prime Ministers of both the countries expressed satisfaction at the age-old close, cordial and extensive relationships between their states and expressed their support and co-operation to further consolidate the relationship.

The two issued a 22-point statement highlighting the need to review, adjust and update the 1950 Treaty of Peace and Friendship, amongst other agreements. India would also provide a credit line of up to $15 million to Nepal to ensure uninterrupted supplies of petroleum products, as well as lift bans on the export of rice, wheat, maize, sugar and sucrose for quantities agreed to with Nepal. India would also provide $2 million as immediate flood relief. In return, Nepal will take measures for the promotion of investor friendly, enabling business environment to encourage Indian investments in Nepal.

Indian President Ram Nath Kovind met with Nepalese President Bidya Devi Bhandari in Tokyo, 2019

In 2010 India extended a line of credit worth US$50 million and 80,000 tonnes of food grains. Furthermore, a three-tier mechanism at the level of ministerial, secretary and technical levels will be built to push forward discussions on the development of water resources between the two sides.[18] Politically, India acknowledged a willingness to promote efforts towards peace in Nepal. Indian External affairs minister Pranab Mukherjee promised the Nepali Prime Minister Prachanda that he would "extend all possible help for peace and development."[19] In 2014, the Indian embassy in Kathmandu started an open house service which would hear grievances faced by the Indian nationals living in Nepal.[10]

However, in recent years, the increasing dominance of Maoism in Nepal's domestic politics,[20] along with the strengthening economic and political influence of the People's Republic of China[21][22][23] has caused the Nepalese government to gradually distance its ties with India, though Nepal still does support India at the UN. Prime Minister of India Narendra Modi visited Nepal in August 2014, marking the first official visit by an Indian prime minister in 17 years. During his visit, the Indian government agreed to provide Nepal with US$1 billion as concessional line of credit for various development purposes and a HIT formula, but he insisted that Indian immigrants in Nepal do not pose a threat to Nepal's sovereignty and therefore open border between Nepal and India should be a bridge and not a barrier.[24][25] Nepal and India signed an agreement on 25 November 2014 as per which India will build a 900 MW hydropower plant at a cost of another US$1 billion.[26] An amount of US$250 million has been granted to Nepal as a part of the agreements signed on 22 February 2016 for post-earthquake reconstruction.[27]

A perpetual issue for many people of Nepali origin, the birthplace of Gautama Buddha has long been a cultural and social issue devoid from the political landscape of both Nepal and India.[28] However, since the souring of relations between the two countries, the issue has been used to undermine relations between the two countries both politically and socially. The two-day-long International Buddhist conference in Kathmandu which ran from 19 to 20 May 2016 marked Vesak and the 2,560th birthday of the Buddha was also used to promote the Buddha's birthplace which lies in modern-day Nepal.[29] The decision of the Nepal Culture Ministry to change the theme, "Preservation and Development of Buddhist Heritage of Nepal" with the sub-theme "Lumbini – Birthplace of Buddha" under the name "Lumbini – Fountainhead of Buddhism" was met with criticism from India which subsequently boycotted the conference due to this and on the back of China's supposed monetary involvement in the conference.[30] Nepali Prime Minister, K.P. Oli told the media that the conference, "should help us make clear to the world that Buddha was born in Nepal and that Buddhist philosophy is the product of Nepal".[31]

In early March 2017, the fatal shooting of a Nepali man who was protesting Indian-occupation on disputed territory between India and Nepal sparked protests in the capital Kathmandu. Indian troops had previously prevented a group of Nepalese farmers living along the border from completing a culvert in the disputed area which ultimately led to protests. It was considered rare for India to retaliate with gunfire.[32]