Summary – More HIT than miss in India-Nepal ties

Important Events –

Adoption of a new Constitution in 2015.
Two rounds of elections have been held since 2015 – in 2017 and in November, 2022.

Challenges in Indo-Nepal Ties –

Political Instability in Nepal – Inability by any party to form a stable government
Economic blockade in 2015

Green-shoots in Indo-Nepal Ties –

During his visit to Nepal in August 2014, Prime Minister Modi invoked ‘neighbourhood first’ to denote a new beginning in relations.
Renewed focus on connectivity – acronym ‘HIT’ – Highways, Infoways, and Transways.

Hydropower cooperation (Thrust Area) –

Nepal is endowed with an economically viable potential of 50,000 MW – Till a decade ago, Nepal had an installed capacity of barely 1,200 MW, making it dependent on electricity imports from India.
Presently, Nepal has an installed capacity of 2,200 MW, and in season, can export power to India.
Nepal’s dependence on import of power from India has dropped from 20% to 10% during the last five years.

Important Projects –

India and Nepal have finalised a long-term power trade agreement targeting the export of 10,000 MW within a 10-year time frame.
The 900 MW Arun III project started in 2018 by the SJVN (formerly the Satluj Jal Vidyut Nigam) will be operational in late 2023.
Nepal and India signed a memorandum of understanding (MoU) for the 695 MW Arun IV project.
India has agreed to the Nepali demand for the facility to export electricity to Bangladesh using the Indian grid – (a win for the prospects for sub-regional cooperation).
To facilitate the movement of goods and people, the Rupaidiha-Nepalgunj Integrated Check Post was inaugurated.
Work begun on the Sunauli-Bhairahawa integrated check post and an MoU signed for another at Dodhara Chandni.
Plan to extend the Jaynagar-Kurtha railway line inaugurated last year, while more links are to be taken up.
Motihari-Amlekhgunj petroleum pipeline was operationalised in 2019 – work has begun to extend it to Chitwan and an MoU for a new pipeline between Jhapa and Siliguri signed, which includes terminals and other infrastructure.

Challenges and Irritants –

Ensure implementation of projects on time.
Agnipath scheme that impacts the recruitment of Gurkha soldiers into the Indian Army’s Gurkha regiments, a practice that began in 1816 by the British Indian Army. This was continued under a 1947 treaty based on ‘equal treatment’.
Kalapani boundary issue
India–Nepal Treaty of Peace and Friendship of 1950 – In Nepal, conviction has taken root that the Treaty is unfair as it was imposed somehow.