All eyes are on Indian Foreign Secretary Vikram Misri’s ongoing visit to Nepal. Misri, who arrived in Kathmandu this morning, is the senior-most Indian official to visit Nepal in nine months, following the formation of the new government under the leadership of Balen Shah of the ruling Rastriya Swatantra Party (RSP).
The visit comes at a crucial juncture, as Kathmandu and New Delhi are working to finalize the agenda for Prime Minister Shah’s anticipated visit to India in late November or early December. Against this backdrop, Misri’s visit is unlikely to be merely a routine diplomatic engagement. Rather, it is expected to set the tone for Prime Minister Shah’s upcoming visit to New Delhi and offer important signals about the future direction of bilateral relations.
Nepal and India are not merely neighboring countries; they share deep-rooted cultural, historical and civilizational ties. Nevertheless, their bilateral relationship has experienced periodic ups and downs, largely due to a range of contentious issues, including territorial disputes over Kalapani and Susta, which Nepal claims as part of its sovereign territory.
Nepal maintains that Kalapani is an integral part of its sovereign territory, citing its interpretation of the 1816 Treaty of Sugauli, signed with the British East India Company. India, however, has yet to demonstrate a willingness to engage in substantive diplomatic dialogue with Nepal to resolve the longstanding territorial dispute. Adding to the tensions, India has taken a further step by reopening the trade route to China through Lipulekh, a territory that Nepal claims as its own. This move has further complicated an already sensitive bilateral relationship.
Meanwhile, several major infrastructure projects remain confined to paper, despite agreements between the two countries to move them forward years ago. One such example is the Pancheshwar Multipurpose Project, envisaged under the Mahakali Treaty of 1996. Nearly three decades later, the two sides have yet to finalize the project's Detailed Project Report (DPR), highlighting the persistent gap between bilateral commitments and their implementation.
Faults of India’s Nepal policy
Over the years, successive bilateral visits have produced numerous commitments aimed at strengthening the longstanding friendship between the two countries and taking their relationship to greater heights. One such commitment was the revision of the outdated 1950 Treaty of Peace and Friendship between Nepal and India. In 2016, the two governments established the Eminent Persons Group (EPG), following a bilateral understanding reached during a high-level political engagement. The group was mandated to examine the treaty and recommend ways to update it in line with contemporary realities.
However, despite completing its report, prepared by eminent personalities and senior figures from both countries, the EPG's recommendations remain unimplemented. The report has effectively been gathering dust, as the Indian side has shown little interest in formally receiving or acting on it. The recommendations could prove instrumental in updating the treaty if the report were received and considered at the highest level. As India's former Foreign Secretary Shyam Saran, who also served as India's ambassador to Nepal in the early 2000s, noted in his book How India Sees the World (2017), the Indian government had acceded to Nepal's requests to review the terms of the treaty. However, only one round of such a review had been held at the foreign secretary level.
Several other proposals and concerns raised by Nepal over the years have either received little attention from India or remain under negotiation. For instance, Nepal Rastra Bank continues to hold billions of rupees worth of demonetized Indian currency notes following India's demonetization policy in 2016. Kathmandu has yet to receive a positive commitment from New Delhi regarding the exchange or repatriation of these notes, leaving Nepal in a state of uncertainty. While the issue may not appear to be a priority for India, it remains a matter of considerable concern for Nepal.
Similarly, Nepal has sought additional air routes through Indian territory, including the exercise of Fifth Freedom traffic rights. However, despite repeated discussions, Kathmandu has yet to receive any concrete written commitment from New Delhi. The lack of progress on this issue has also constrained Nepal's efforts to expand its international air connectivity by operationalizing recently built airports, such as Pokhara Regional International Airport.
Another longstanding point of disagreement concerns the recruitment of Nepali youths into the Indian Gorkha regiments under the Agnipath recruitment scheme introduced by the Narendra Modi government. Successive governments in Nepal before the Balen administration remained reluctant to endorse recruitment under the new scheme. It remains to be seen how the current government will respond if Misri raises the issue during his visit.
Against this backdrop, Misri’s visit to Kathmandu should focus on narrowing the differences between the two countries and creating a positive atmosphere ahead of Prime Minister Shah’s upcoming visit to New Delhi. It should provide an opportunity for both sides to take stock of existing commitments, address outstanding concerns and identify areas where meaningful progress can be achieved.
Prime Minister Shah’s visit to New Delhi is expected to offer an important opportunity for both countries to better understand each other's core national interests and inject fresh momentum into bilateral cooperation. Priority areas could include hydropower development, railway and road connectivity, trade and transit, climate change-induced disasters, and information technology.
India remains Nepal’s largest trading partner, and an overwhelming proportion of Nepal's trade continues to transit through Indian territory. India has also extended financial and humanitarian support to Nepal during difficult times, including the recent Bhotekoshi floods, the COVID-19 pandemic and post-earthquake reconstruction following the 2015 disaster. Despite this support, however, there is a widespread perception in Nepal that its southern neighbor does not adequately respect the country's sovereignty.
Addressing this perception should be a priority during Prime Minister Shah's forthcoming visit. The visit should create a conducive environment for resolving longstanding disputes, particularly the territorial disagreements over Kalapani and Susta. Resolving these issues will require sustained political commitment, mutual respect and constructive diplomatic engagement from both sides. Unresolved disputes should not be allowed to overshadow the broader bilateral relationship or undermine opportunities for cooperation in areas of shared interest, including energy, connectivity, climate resilience and trade.
The Balen Shah-led government has projected good governance and the fulfillment of its electoral promises as its key priorities. It has also indicated an intention to reorient Nepal's foreign policy. Against this backdrop, New Delhi may be keen to understand the kind of relationship the new leadership, particularly Prime Minister Shah and RSP Chairman Rabi Lamichhane, seeks to develop with India in the years ahead.
With traditional political forces no longer at the helm of government, at least for the foreseeable future, New Delhi is likely to watch closely how the new leadership approaches bilateral relations and manages Nepal's engagement with major global powers, particularly the United States and China.
Ultimately, the challenge for both Kathmandu and New Delhi is to move beyond diplomatic rhetoric and translate longstanding commitments into tangible outcomes. Misri’s visit offers an opportunity to begin that process and establish a more pragmatic, balanced and forward-looking foundation for Nepal-India relations.
The author, formerly affiliated to Republica, is a freelance Nepali journalist currently based in Canada. He has extensively covered Nepal’s foreign policy and governance.
-1793781552.webp)
