India Nepal Relations

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HISTORICAL BACKGROUND

  • Pre-Cold War Era
    • The relation between India and Nepal goes back to the times of the rule of the Sakya clan and Gautama Buddha
    • Initially, Nepal was under the tribal rule and only with the coming of Licchavi rule in Nepal did its feudal era truly begin
      • Feudalism in Nepali society owes its origin to Licchavis
        • From 750 to 1750 AD was a period when Nepal came under the Newari rule and they consolidated their presence in Kathmandu
        • This time period also saw a shift from Buddhism to Hinduism in Nepal and witnessed widespread cultural diffusion
        • In the 12th century, during the Malla period and rule of Yakshamala in Nepal, the two nations reached their cultural zenith
        • The early 1700s witnessed a change in the Nepalese power structure
      • The subsequent period witnessed both monarchical and prime ministerial rule. In 1846, Jung Bahadur Kunwar established a dynastic rule for the Prime Minister, known as the ‘Rana’
        • The Rana rule took hold and continued in Nepal till 1951
        • Though the Rana regime was not very efficient, it did contribute to social developments in the field of schools and education
        • In the 1920s, as the Indian freedom struggle progressed, many educated Nepalese people came to India and partook in the struggle
      • This gave the Nepalese elite insight into a nonviolent struggle
    • The Nepali elite subsequently launched a movement in Nepal and succeeded in ousting the Rana rule
    • The most instrumental role in this movement was played by the Nepali Congress (NC)
  • Nepal's Struggle With Democracy
    • In 1951, after the ousting of the Rana rule, the monarchy continued to dominate Nepalese politics
      • Three important kings with respect to this period of Nepalese history are King Tribhuvan, Mahendra, and Birendra
        • In the elections that were held in Nepal in 1951, the Nepali Congress party (hereafter referred to as NC) won
        • The period of 1951 to 1959 witnessed the King, Tribhuvan Bir Bikram Shah, and thereafter, his successor, Mahendra Bir Bikram Shah, and the NC struggle to control Nepal
      • The situation was not stable due to the insecurity of the king as the king wanted to retain his power and was not keen on sharing power with new democratic elements like the NC
    • In 1959, the confrontation between the king, Mahendra Bir Bikram Shah, and the NC reached a level where the king declared NC as corrupt, removed it from power and subsequently installed a party-less Panchayat system
      • This system was such where people would elect their representatives but actual power would be wielded by the King
      • Thus, a highly centralized rule began in 1960
      • The period of party-less Panchayat System witnessed protests from NC and other sections of society
    • The protests finally culminated in the First Jan Andolan in Nepal in 1990. During this time, the King Birendra Bir Bikram Shah, divested of any other options, brought back democracy and a new government under the NC was formed
    • During the rule of the NC in Nepal in the period after 1990, there was not much progress witnessed on the developmental front
      • In 1994, the Unified Marxist Leninist Party (UML) tried to generate an anti-India feeling in Nepal
      • The UML began to assert that the NC is in reality controlled by Congress party of India
      • This led to a perception amongst the Nepali people about India’s control and interference over Nepal and its internal affairs through the NC
    • The anti-India plan worked in favor of UML and they succeeded in capturing power for a short period of 9 months in Nepal
      • The UML was removed and the NC assumed power again in 1994
        • The subsequent period not only saw civil unrest but also witnessed the development projects of Nepal suffer
        • The civil unrest, over a period of time, evolved into the civil uprising and took an ideological turn to Maoism
        • The Maoist movement in Nepal became fully manifested by 2005
      • Perceiving the unrest and violence in society, King Gyanendra dissolved the Parliament again
      • This dissolution of the Parliament caused massive protests, ultimately leading to the second Jan Andolan in 2005
    • The Jan Andolan led to a signing of a Peace Accord in 2000
    • An interim constitution was prepared in 2007
    • As mentioned, the 2006 Peace Accord planned that Nepal would establish the new constitution by 2010
    • However, by 2010, the constitution was not ready. It got delayed due to two key issues
      • The first related to the disagreement about the succeeding form of government
        • Maoists favored the Presidential system while others favored the Parliamentary system
      • The second issue related to federalism
        • Maoists favored ethnic federalism while others rejected the idea
    • Another important factor that delayed the Constitutional development was Madhesi assertion
      • Madhesis are people living in the South of Nepal in the region of Terai
      • They are people living close to the border of India
      • The Madhesis have always been discriminated against by Pahadis or the people living in the upper reaches of Nepal
      • In fact, the discrimination against Madhesis at one point of time was so intense by Pahadis that if a Madhesi citizen wanted to visit Kathmandu, they had to apply for a permit
      • The Madhesis, through their representation, demanded rights in the new constitution
    • After tremendous delays, Nepal finally accepted a constitution in September 2015

INDIA NEPAL BILATERAL RELATIONS

  • India Nepal Friendship Treaty 

 

    • India and Nepal, on 31st July 1950, signed a Treaty of Friendship and Peace
      • This treaty acts as the bedrock of the relation between the two nations
      • The treaty extends mutual peace, friendship, and sovereignty to each other while it accepts non-interference in each other’s territory
        • As per the treaty, Nepal would consult India whenever they undertake any arms imports from any nation other than India
        • The treaty lets the nations extend national treatment to each other
        • The national treatment clause also extends for industrial and economic development
        • Basically, under Indo–Nepal national treatment, their citizens are empowered to the same privileges for property, trade and residence and movement in both countries
      • That means, a Nepali citizen can buy property in India while an Indian citizen can do so in Nepal if he/she so chooses
    • Also, an Indian citizen can reside anywhere in Nepal and a Nepali citizen to enjoys the right to residence in India under the national treatment
      • Another important point of the treaty is open borders
      • As per this point, Indian citizens can move to Nepal without the need for a visa and vice versa
      • As per Article X in the treaty, either party can ask for a change in the treaty whenever demanded
    • Issues with the Treaty
      • The Treaty favors Nepal more than India, but Nepal still has certain issues with it. Nepal initially complained that when the treaty was concluded in 1950, India
      • concluded the treaty with a Rana ruler
      • Nepal alleges that India signed the treaty with the Rana who had become unpopular
        • Certain sections in Nepal also alleged that the way treaty was signed signified that India considered Nepal as a small state and not an equal state
        • It was further alleged that the conclusion of the treaty by the Indian ambassador and Nehru himself not coming to sign the treaty signified an unequal status of the countries
        • As mentioned earlier, in 1994, the UML had successfully generated an anti-India plank in the election
        • Since then, raising anti-India slogans and alleging that the Indo–Nepal Treaty of 1950 favors India more than Nepal has become a norm for gaining political mileage
      • Many times, Nepali political parties have demanded a change in the treaty. Under Article X of the treaty, Nepal can ask India to bring change and India has to establish a mechanism for the same
        • Whenever Nepal has asked for a change in the treaty, India has accepted the Nepali request, but, absence of consensus in Nepal on issues that need revision prevents any meaningful engagement about the issue
      • This demand for revision of the treaty was recently also raised during Indian the PM’s visit to Nepal in 2014
  • Economic Relations

 

    • India and Nepal signed a trade treaty in 1996 which was later revised in 2009
    • 95% of Nepali trade happens with India. Open border and twenty-two transit routes facilitate the trade
      • Raxaul, Tanakpur, and Bratmandandi are prominent transit routes
      • There are more than 150+ Indian firms in Nepal working in manufacturing and services sectors
    • In 2013, both sides agreed to an Inter-Governmental Commission on Trade under which India has allowed the use of Kolkata port by Nepal for third-country trade and designated customs points have been established
      • The trade is imbalanced as India exports a majority of things ranging from food products to petroleum products while imports, being negligible, primarily include wood and traditional medicines
    • There have been instances when some sections in Nepal have created a perception of a trade flood by India
  • Key Agreements
    • Power Trading Agreement
    •  
      • Before the Indian Prime Minister’s visit to Nepal, Indian Foreign Minister Sushma Swaraj paid a visit to Nepal and agreed to negotiate a Power Cooperation Agreement
      • During her visit, the draft was agreed to
        • It was believed that during the visit of the PM, the PTA would be signed
        • However, during the PM’s visit, the PTA negotiations could not be concluded
        • It was decided that within the next 45 days after PM’s visit, the PTA would be signed
        • The PTA between India and Nepal was finally signed in September 2014
      • Under the PTA, nine articles are concluded and it has been decided to have a review of PTA after 10 years
        • The agreement shall be valid for 50 years
        • Under the PTA, Nepal would give license to Indian firms to undertake 28 surveys in Nepal to explore 8000 MW power generation
        • By 2021, GMR will establish a plant in Karnali to export 900 MW electricity to India
    • Water Sharing Agreements
      • Nepal is an upper riparian state and has a hydropower generation potential of around 80,000 Megawatts power
      • However, it has installed capacity of around 800 Megawatts only
        • On average, 15 to 18 hours of power cuts are common throughout the country
        • Unfortunately, Nepal has not developed its hydropower potential due to a fear that if they undertake hydropower generation, India will assert dominance over the generated hydroelectricity
      • Despite the fact that India always cites the example of Bhutan–India hydro diplomacy as a successful case to Nepal, Nepal is still reluctant to improve its generation capacity
      • There are three treaties to regulate our water sharing today:
        • Kosi Treaty 1954
          • In 1954, India and Nepal signed the Kosi treaty
          • Kosi river causes tremendous flooding and has been also called the Sorrow of Bihar
          • As per the treaty, the two sides agreed to cooperate to manage Kosi flooding. India, under the treaty, committed to creating a low head diversion or a barrage dam which, through gates, can regulate Kosi’s water flow
          • India constructed the barrage in Nepal and Nepal agreed to give its management rights to India for 199 years
          • Over a period of time, certain sections in Nepal have brought up some issues pertaining to the Kosi treaty
          • A section in Nepal feels that barrages have a normal life of 50 years and India getting a lease of 199 years has given India rights to control it for long beyond the need
          • Certain sections in Nepal also allege that India, while managing the barrage, does not release adequate water for irrigation and during floods, opens the gates, leading to many villages getting submerged completely
          • A solution to this issue may come forth if both sides undertake a multi-stakeholder negotiation and resolve the issues
        • Gandak Treaty 1959
          • In 1959, India and Nepal also signed the Gandak River treaty
          • The treaty has 13 articles and under the treaty, both sides are to utilize water from the Gandak river to generate twenty thousand megawatts electricity
        • Mahakali Treaty 1996
          • In 1996, both concluded the Mahakali treaty
          • Under the treaty, India has agreed to undertake the creation of three dams at Sarda, Tanakpur, and Pancheshwar
          • Both sides have agreed to share costs. However, there has been no progress on these projects owing to pending social and environmental impact assessment
  • Strategic Importance
    • Why India needs Nepal?
      • Nepal acts as a buffer state between India and China
      • Nepal is a key centerpiece in India's Neighbourhood First Policy
      • India's Ramayan Circuit goes through Nepal (birthplace of Sita), giving the bilateral ties a religious vantage
      • Gorkhas, natives of Nepal, form a strong military regiment in the Indian Armed Forces
    • Why Nepal needs India?
      • To Counter Chinese Influence
      • A Hindu Majority Country India could provide geopolitical support to another Hindu Country
      • India has funded several infrastructure projects in Nepal and continues to do so further
  • People-To-People Ties
    • As close neighbors, India and Nepal share unique ties of friendship and cooperation characterized by an open border and deep-rooted people-to-people contacts of kinship and culture
    • There has been a long tradition of free movement of people across the border
    • Nepal shares a border of over 1850 km with five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh, and Uttarakhand

KEY BILATERAL VISITS

  • PM Modi's visit in 2014 to Nepal
    • The Indian PM visited Nepal in 2014
      • During the visit, the PM paid a visit to Pashupatinath temple and even donated Sandalwood
      • The PM announced one billion dollars credit for Nepal and committed an immediate rise in scholarships for Nepali students for education in India from then 180 to the present 250
      • Nepal has agreed to complete a Detailed Project Report for the Pancheshwar project
    • Both sides have agreed to establish a Joint Commission to review the Indo–Nepal Treaty of 1950
    • A new Track-II initiative called Expert Persons Group—Nepal India Relations has been established
    • India has agreed to provide assistance to Nepal on goiter control and also concluded various MoUs
  • K.P. Oli's visit in 2016
    • In February 2016, the Nepali PM, KP Oli visited India and brought about an assurance to India on constitutional changes
    • During the visit, he signed some MoUs and, jointly with Indian PM, inaugurated Muzaffarpur–Dhalkebar transmission line



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