Context

In a recent development that has stirred regional tensions, Nepal has included certain disputed territories in its new currency notes. 

India-Nepal Relations, and Diplomatic Standoff between India and Nepal

• Diplomatic Crisis: The updation of currency notes has transformed into a diplomatic confrontation, accompanied by the expanding influence of external actors in the region.
• Escalation of Territorial Dispute: The incorporation of contested regions like Lipulekh, Kalapani, and Limpiyadhura has incited anger in India. 

• • Officials have criticized Nepal’s actions, labeling them as breaches of bilateral agreements and potentially worsening the relationship between the two nations.
• India’s Appeal to Nepal: India has called on Nepal to honor sovereignty, engage in dialogue, and abstain from making baseless claims.
• New Map: Previously, tensions between New Delhi and Kathmandu escalated after Nepal unveiled a political map in mid-May 2020, integrating regions such as Lipulekh, Kalapani, and Limpiyadhura, which were previously delineated in India’s November 2019 map.
• Historical Claims and Conflicting Views: The core of the conflict revolves around historical uncertainty and contrasting views on border delineations.
  • Nepal asserts ownership of the territories, citing historical treaties and cartographic evidence, while India retains control, citing historical precedence and strategic necessity.
  • The dispute has simmered for decades, occasionally flaring up but never fully resolved.

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Reasons For Nepal’s Current Actions

• Political Influence: Nepal’s current actions are largely influenced by its new political leadership, which is intentionally using its closeness to China to assert dominance over India.
• Discontentment with Agniveer Policy: Nepal is also displeased with India’s Agniveer policy. 
• Strengthening Ties with China: In recent years, Nepal-China relations have significantly strengthened, driven by mutual economic interests and strategic collaboration. 
  • China has made substantial investments in Nepal’s infrastructure, such as roads and telecommunications networks, thereby improving connectivity between the two nations.
• Nepal’s BRI Involvement: Moreover, Nepal’s involvement in China’s Belt and Road Initiative (BRI) has increased its economic reliance on Beijing, offering an alternative to its traditional ties with India. 
  • In this context, Nepal’s move to include disputed territories in its currency notes could be seen as a strategic move indicating its desire to assert independence from Indian influence.

Way Forward

• Immediate Actions: This situation is a cause for concern for India, prompting the need for immediate action to prevent Nepal from drifting towards Chinese dominance.
• Utilizing Historical Ties: India stands to lose if Nepal follows the path taken by the Maldives. It is crucial to utilize the historical ties between India and Nepal to persuade the new leadership that China’s intentions towards Nepal are exploitative, as demonstrated by its actions in numerous other nations.

Conclusion

The ongoing diplomatic standoff between India and Nepal highlights the need for proactive dialogue and diplomatic solutions to address territorial disputes and geopolitical tensions. It is crucial for both nations to prioritize communication and mutual respect to ensure stability and cooperation in the region.