Relations between India and Nepal have dipped severely since 2015 when Narendra Modi and Khadga Prasad Oli were both Prime Ministers.

Nepal-India Reset

• There is now opportunity to upgrade the relationship to ‘positive’ and ‘stable’ with Mr. Modi having reclaimed the top post a third time and as Mr. Oli too comes out on top, in a unique collaboration between his CPN-UML and the Nepali Congress.
• The bilateral turbulence started with adoption of the new Constitution by Nepal’s Constituent Assembly in 2015, which New Delhi had wanted reworked. 
• Some politicians seem to have made promises to Mr. Modi in their New Delhi visits, but in the end they promulgated the draft unamended.
• While perfunctorily pointing the finger at Madhesi activists of the Tarai plains, New Delhi slapped a devastating blockade on Nepal that lasted nearly six months and generated enough bad blood to last a generation.
• Mr. Oli reacted sharply and on the rebound signed 10 agreements with Beijing, extending from trade, transit to power and transport.
• The two Prime Ministers did meet after the blockade was lifted, but the effervescent Mr. Oli would not hold back from suggesting that the true historical Ayodhya was within present-day Nepal, or that India’s aggressive bent called for replacing the national motto ‘Satyameva Jayate’ with ‘Singhameva Jayate’.
• Following an updated political map published by India in October 2019, Nepal’s Constitution was amended to add the Limpiyadhura-Kalapani triangle to its own map on the northwest.

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Power and Prowess

• With his foreign policy and national security teams unchanged, will he mellow or become more adventurous to make up for the BJP’s domestic deceleration?
• The two Prime Ministers must use the opportunity of their elevation in Delhi and Kathmandu to clear the logjam.
• With his ‘Neighbourhood First’ initiative battered on all quadrants, Mr. Modi may want to start with policy corrections on Nepal as the nearest and closest neighbour.
• Indian exceptionalism having long preceded Mr. Modi, going back to Jawaharlal Nehru’s diktats to Kathmandu’s bickering politicians, New Delhi should have known by now that manufacturing consent in Nepal is a lost cause.
• India’s relentless engagement with Nepal’s politics and governance goes against the principle of non-interference that is part of the Panchsheel doctrine.
• New Delhi should also understand that a hands- off policy will, ipso facto, lead to a politically stable and economically energised Nepal, which will in turn benefit India’s own national security and the economy of its Hindi heartland.
• Nepal is not the basket-case neighbour as perceived by many in India.
• It is the seventh largest remittance-sending country to India, helping provide for livelihoods in its poorest parts, from Uttar Pradesh and Bihar, all the way to Odisha.
• Seen in this light, New Delhi’s overbearing attitude seems based on power, not prowess.

Playing the System

• Amidst unrelenting political chaos, the ability of Kathmandu’s political class, civil society, the bureaucracy and even security forces to speak on equal terms with Indian counterparts stands severely eroded.
• Over the decades, Nepal’s political leadership has had its share of weaklings and quislings, but the worst dip came in the just-ended prime ministerial run of Pushpa Kamal Dahal (‘Prachanda’), the Maoist chieftain, who early on had disclosed his wish to be “comfortable” for New Delhi.
• Returning from an official visit to New Delhi in June 2023, Mr. Dahal conceded that he had refrained from bringing up issues that would spoil Mr. Modi’s mood and “ruin the atmosphere”.
• During the trip, he failed to raise each and every pending bilateral matter, including air routes for Nepal’s stillborn international airports at Bhairahawa and Pokhara, the festering territorial dispute over Limpiyadhura-Kalapani, and a report of the Eminent Persons’ Group (EPG) collecting dust.
• To please the RSS, he and his entourage shed their official attire to don saffron robes at the Mahakaleshwar Temple in Ujjain, Madhya Pradesh.
• Mr. Dahal concluded a power trade agreement that allows New Delhi to refuse import from hydel plants built with Chinese loans or Chinese contractors under international bidding.
• He has allowed the Indian Embassy in Kathmandu to independently disburse grants of up to Nepal rupees 20 crore, a facility not available to any other embassy.

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• Meanwhile, New Delhi is on a campaign in Kathmandu to persuade delinking Nepal’s hydropower from its water resource, so that bilateral agreements do not require two-thirds ratification by Parliament.
• As Mr. Oli takes over the reins in Kathmandu, he must discard the lethal diffidence of his predecessor, standing up for Nepal and speaking for South Asia.
• All bilateral matters that are hanging fire must be brought confidently to the table for airing and resolution.
• He must also convince Mr. Modi of the importance of reviving the South Asian Association for Regional Cooperation, for the sake of a South Asia that holds a fourth of the global population.
• New Delhi must understand that while Nepal’s friendship with Beijing is non-negotiable, it will never be at the cost of India.
• Nepal cannot afford for it to be otherwise.
• Meanwhile, it is incongruous that New Delhi pressures Kathmandu on China-linked hydropower, airports and airlines even as China emerges as India’s largest trading partner.
• It was Mr. Modi and Mr. Oli who together nominated the eight-member India-Nepal Eminent Persons’ Group back in 2017.
• The team finalised its consensus report the following year, whose implementation is expected to lift bilateral relations towards a transparent, confident and equal partnership.
• If Mr. Modi and his team continue to stall on the release of the report, as is the case, informal means have to be sought to access its content.
• Up ahead, the Nepal-India relationship must be calibrated outside the two poles of imperious New Delhi and subservient, obsequious Kathmandu.
• The latter must find its voice, and New Delhi must reflect on how the failed policy of interference in politics and governance has left Nepal flailing.

A South Asia at Peace

• The ‘default setting’ of the Nepali state and people is cordiality towards India and Indians, but New Delhi seems unconvinced.
• A continuing ‘Himalayan paranoia’, with its origins in the 1962 debacle with China, fuels geo- strategic insecurity in New Delhi think-tanks.
• Hence, they are far from considering Nepal as the future connectivity gateway to the Chinese mainland via railways and roadways breaching the Himalayan rampart.
• Nor do New Delhi economists care to note the enormous savings in military expenditure represented by the very presence of Nepal as a benign buffer along the central stretch of the Himalaya – even more relevant amidst the ongoing concern over the Indian exchequer’s inability to bear military costs and pensions.
• The open Nepal-India border is the prototype for a future South Asia at peace, even though New Delhi analysts constantly harp on the insecurity it represents for India.
• In fact, it is Nepal which has suffered, with the Maoists using shelters across the unregulated frontier during their decade of insurrection against the Nepali state.
• Every summer, the Indian media goes to town about Nepal ‘releasing’ monsoon waters into the Ganga plain, but there are no significant storage dams in Nepal and the two barrages on the Gandaki and Kosi are controlled by New Delhi.
• ‘Nepal studies’ does not exist as an academic discipline in India, which is one reason Indian citizens think of Nepal as a poor, ungrateful and even malevolent neighbour.
• It is Kathmandu’s job to reach out, erase misconceptions and suggest possibilities.
• Exasperated Nepalis would like to see India convert from the ‘big brother’ avatar to simply being ‘brother’.
• New Delhi’s policymakers can do their part by accepting that Nepal is, after all, a separate country.

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Conclusion

The Nepal-India relationship requires recalibration towards mutual respect and cooperation, moving beyond past grievances to achieve stability, economic growth, and regional peace.