Monday, September 03, 2012

India-Nepal Bilateral Relations: Impact on Nepal’s Sovereignty


Nepal has a unique strong identity among the nations of Asia as a sovereign state, but it holds shaky balance between India and china (Shrestha, 2001, p6), where Bhatt has characterized triangle Nepal-India-China relationships as “root between two stones”. Indian and Nepalese have shared the similar “geographical”, “historical”, “cultural”, “social” and “economic” spheres since times immemorial (Mukherji, 2010, p1), but the diplomatic relationship between Nepal and India is like a ‘legend’ after 1950s because the dynamics of Indo-Nepal relationship changes after the political changes in Nepal (Thapa, 2010a, p37). The bilateral relationship between these two countries is troublesome because of the treaties and agreement that have been signed by them.
In this essay, I will attempt to explain how Nepal's sovereignty has been limited in the case of international disputes especially with India? In doing so, I will be focusing on India’s policies towards Nepal. Main focus has been given to various treaties and its consequences for Nepal.

Map Credit:

Status of Relationship between Nepal and India since 1950s

Although Nepal is an independent sovereign state, it has been an “India-locked” country throughout the history, where India influences the major aspects of social, economic and political institutions. The Indo-Nepal friendship was started by the Rana government in 1950 by ratifying two treaties; Treaty of Peace and Friendship (TPF) and Trade Treaty (TT) by both governments. Ranas started the diplomacy relationship to avoid political isolation from India, but simultaneously, Nepalese who were exiled by Ranas were also creating political parties in Indian territory to fight against the Rana dictators in Nepal (Krämer, 1999). After three months from the signing of the Treaty, the oligarchic Rana regime was replaced to another hereditary shah monarchy with the help of India, which later brought a mere touch of democracy (Kraemer, 1999; Kansakar, 2001). However, the then president of the Indian National Congress went as far as declaring Nepal as a part of India where he noticeably said “Nepal was always a part of India (Kraemer, 1999),” which clearly shows two things regarding Indo-Nepal relationship. First, India wanted to keep Nepal under its influence for long. Second, India’s “big brother attitudes” towards Nepal to influence political and economical institutions in state formation. Even the leader of Nepali National Congress, B.P. Koirala took the same stand saying “Actually Nepal and India are not two countries” (Kraemer, 1999).

However, the foreign policy between these countries evidently shows that they are independent and sovereign. Foreign policies are the central objective to preserving the liberty of states and to maintaining the “balance of power” (Dune, 1999, p116). Under the TPF both acknowledge and respect state sovereignty, territorial integrity, independence for diplomatic relations and industrial and economic developments. It also recognizes the historical and cultural ties between the people of these countries, thus Nepalese have identical rights and privilege as Indian citizen in the matter of “residence,” “occupation,” and “movement” (PUDR, 2002). Similarly, TT provides permission to use Indian Territory as transit route to reach Calcutta seaport and imports goods including military equipment for its overseas trade.[1] Since the treaty, India is one of the oldest military suppliers to Nepal (Kansakar, 2001; Thapa 2010a, p55).

Yet again, several important bilateral negotiations took place to develop both countries on water management resources (Hamner and Aaron, 1998). In 1954, Koshi river agreement provides full authority and power to India to design maintenance and repair the barrage. The agreement has mainly focused on creating high dam to control floods and produce 1800 MW hydropower to irrigate 3.84 million acres land in India and Nepal (Pun, 2009). Soon after Koshi agreement, Trisuli agreement (1958), and Gandak irrigation and power project (1959) (Paul, 2010) was held for the purpose of “flood control and management,” development of “hydro-electric power”[2], “irrigation”, “prevention of erosion” and “navigation” for both countries (Ministry of water and power, 1974; Thapa, 2010).

Since 1950s every political change in Nepal seeks changes in Indo-Nepal agreements because Nepal’s governments have had “difficulty accommodating India’s genuine interests and concerns” (Pandey, 2010). The anti-Indian sentiments are growing in Nepal because of frequent interference of India on Nepal’s affairs and the unequal treaties signed in the past. This began to intensify mainly since King Mahendra introduced one party Panchayet System in 1962. King Mahendra weakened Indo-Nepal relationship by reducing Nepal’s dependence on India and developing closer relationship with China. The relation even frozen in 1969 when Nepal pressed India for substantial amendments in its favor to revise the existing “unjust” treaties such as “removing Indian security check-posts stationed in Nepal” and “revoking the 1950 treaty” and “separating treaties for trade and transit in mid 1970s” which forced India to withdraw check-post from Nepal and agreed to have separate trade and transit agreement in 1978. In contrast, India insisted negotiating “renewal treaty” into a “single trade and transit treaty,” that was not accepted by Nepal because she had an agreement to purchase weapons from Beijing (Thapa, 2010a; p42-45; Mongabay, n.p.). Consequently, India blockaded Nepal for 15 months in 1988 because Nepal hesitated to fulfill Indian’s interest. As a result, the country’s economy was devastating through high inflation and slow economic growth (Khan, Faisal, Moeed and Aska, 2007; p13; Dahal, 1996; Kumar, 1994, p76). Still, Nepal was attempting to prove that she is a sovereign independent state and have right to act in her own interest.

In the aftermath of political crises by despotic kings’ activities, the pro-democratic movement[3] led by Nepali congress and UFL[4] restored multiparty democracy in the country which was surprisingly supported by India (Hachhethu, 1994, p91; Parajulee, 2000; Beretsmann Stiftung, 2009). India has used its diplomatic power in one of the three goals, “to keep power, to increase power, or to demonstrate power,” as mentioned in Realpolitik and Raison d’Etat by Barash and Webel (2002, p196). Again after 1990 political change in Nepal, the new Indo-Nepal relationship created various new bilateral agreements such as Mahakali integrated development treaty (1990, 1996) Tankapur Agreement (1991) (Malhotra, 2010), inspite of its differences in the past.

Although the cooperation between the states exists through various treaties and agreements, it is very difficult to sustain because those treaties are perceived as “unequal” and “controversial” by Nepalese counterpart. On the other hand, India always attempts to maximize its benefits by breaking the treaties and diminishing Nepal’s sovereignty in several ways: 

First, the territory integrity clause of TPF says to keep 1,700 km between the border of Nepal and India (Khanduri, 2001); however, there are more than 60 cases of noticeable border disputes with India[5]. One of them was Indian fighter Jet randomly flying over Darchula in Nepalese territory, while “patrolling” Indian border territories (Nepali, 2009). Furthermore, 22 out of 26 districts of Nepal bordering India have territorial disputes (Thapa, 2010a).  

Second, Nepalese have special status as citizens in India under a bilateral agreement, but she received Nepalese immigrants as threat. During the 10 years long political upheaval, many young Nepalese preferred to be a cheap labor immigrant in India [6](Samantaray, 2008). It is assumed that each hour 200 Nepalese cross the border (Bhattrai, 2007). Later they have settled in Uttarakhand, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa in India. Some of these Nepalese from Uttarakhand formed a national level organization, called the Akhil Bharatiya Nepal Ekta Samaj (ABNES) to focus on social, cultural and economic amelioration of the Nepalese in India and unite among migrant Nepalese residing and working in India to provide a life with dignity and security. However, Indian government banned the organization under the Prevention of Terrorism Act (POTA) in 2002 by accusing them that they have linked with Nepalese Maoist (Samantaray, 2008; PUDR 2002); whistle India was the key player of the peace process for the 12 point comprehensive peace accord (CPA) between Maoists and Seven party alliances (Murthy, 2010b). It indicates that India uses Nepal’s political and economic developments as it wish.

There are many questions that arise and cold the relationship: Why should ABNES is banned under POTA, given the fact that its members do not involve in any “crimes” and “terrorists” activities on Indian Territory? Why should Nepalese suddenly become “unwanted” to India? Why the Nepalese residing in India are forced to give up their life? On the other hand, Sharma highlighted issues related with Maoist and argues that “although currently Maoist are under Nepali law and politics, still Maoists are labeled as “terrorist” in the US and Indian official record” (Sharma, 2011). Moreover, the Maoists have already come into mainstream politics and have even been the significant part of the governments since 2007. It may be the reason that they want to use it as bargaining tool in the future and make them work as they want.

Third, TT permits Nepal to use Indian territory as a transit to import military weapons and equipments for the security of Nepal (Khanduri, 2001), but when Nepal bought some military weapons from china, India interpreted as Nepal’s violation of agreement to consult India before buying weapons. These agreements have only been able to best address Indian interests which indicate that Indian governments are motivated to increase their wealth and or power through various agreements. Why should sovereign Nepal ‘suffer’ in the name of ‘treaty’? Why should Nepal be the victims of India’s “big brother attitudes”? Is it because Nepal is small, poor and land-locked country? It might be that India sees modern military technology shifting the balance of power between states, as Baylis says, about ‘the problem of difficulties in international co-operations’.

Fourth, according to the KRP agreement, Bihar state government is responsible to maintain and repair the Koshi embankment (Mukunda, 2008), but their negligence has collapsed the embankment displacing more than 50,000 people in Nepal and between 2 to 2.5 million people in India (The Times of India, 2008; Pun, 2009). The catastrophe fuelled by flood has brought various disputes between the Bihar and the central government for their negligence on the embankment and between Nepal and India about the issues of compensation (Malhotra, 2010; Pun, 2009).[7] However, there should be clear focus on what as Amrtya Sen notes, individual human lives at the core of the human security concept (Sen cited in Lee, 2011a). Prachanda, the then prime minister of Nepal also named as “historical mistakes” after visiting the affected areas. It was urged that both governments should work together to compensate the victims rather than blaming each other in the time of such crisis. The former ambassador to Nepal, KV Rajan also highlighted the needs to cooperate between Nepal and India after the Koshi tragedy, although the treaties “heavily favor” India and few so-called elites in Nepal (Housden, 2008) as Rajan emphasized in his speech.

Fifth, the Mahakali agreement was to produce 600MW hydropower by 2002 for irrigating agricultural land in both countries, but again the flaws lies in the agreement which is now basically defunct. It specifies that Nepal would get 4% of the water supply but still lack the amount of water India received from the project (eKantipur, 2009; Thapa, 2010a, p180). How would Nepal respond if India received 96% of the total water? Should the friendship continue even after the exploitation of the water resources of the Mahakali River? Is India “hydro-hegemon” regarding water resources treaties? Since Nepal’s water resources are one of the core areas of interests of India, they have always kept keen eyes on it. Even the Indian government often lobbies, pressurizes and even sometimes threatens Nepal to entertain Indian companies to invest in many hydro-projects of Nepal. India argues that, based on the treaty, it should be given the first priority. It is very clear that India will be always willing to maintain its upper hand on foreign investment in hydro-power generating in Nepal.

            Sixth, the growing imbalance trade between Nepal and India, where there was a decline of $1.1billion exports through various special regulation and restrictive requirements such as tariff in four sensitive items (Das, 2010, p18; Mukherji, 2010, p6)[8], non-tariff restrictions and quarantine tests, although Indian trade makeup Nepal’s 63.9% of total trade (Bertelsmann Stiftung, 2009). Moreover, India is one of the largest foreign investors in Nepal, but the labor unrest, lack of power supply and raw material has hindered the business and overlooked the agreement, which have become the main issues for Indian government. The Maoist trade union attacked on Dabur Nepal[9]has resulted in a loss of about Rs. 130 million per day to Dabur Nepal. Mukherji argues that strike has become India’s main concern in every bilateral trade talk that breached the agreement signed between workers and officials (Mukherji, 2010, p30-32). The Maoists in Nepal have been pursuing some policies that are not in favor of India. It might be the reason why India is heavily involved in keeping the Maoists out of the government in Nepal and building anti-Maoists camp stronger.

Finally, Tanakpur project was conducted in 1983-84 using the international border river that flows between these countries in Indian Territory but she thought that the project “was entirely built by Indian money for the Indians, by the Indians and on the Indian land” (Kumar, 1994, p79). When Nepal asked about the project before it get materialized, she ignored Nepal’s request but later when the project was visible, India suggested that it is of “no concern to Nepal”, since it was built in India’s land, which Kumar claims India “cheated” Nepal in water resources management cooperation. India finally consulted with Nepal, when she realized that she needed to construct an afflux bund on Nepalese soil to deliver desired amount of water or electricity in making the project successful in India. The controversy again arouse when India denied giving 25 out of 125 megawatts to Nepal.

Undoubtedly, Indian imperialism[10] of new form might bring another “state of war” against Indian government and local people in Nepal, as Dunne claims that the causes of war can occur from imperialism, or the balance of power, or undemocratic regimes (Dunne 1997, p148). This colonial mindset of India and its ill-treatment to its neighbors in South Asia has been producing widespread disenchantment and resentment among the citizens of those countries, which is a very disturbing development for India’s future International relations. It shows that India always want to expand her “hegemony power” in Nepal and will relate to Nepal when needed. I strongly agree with constructivists thinking that “anarchy is what states make of it” in international relations (Baylis, 1999; p204). Baylis also highlighted the difficulties of co-operation between states when other states deceive on any agreements to gain more benefits. The violation of each and every agreement has become the security issues between India and Nepal which have brought insecurity in the name of finding “security” and “identity,” as Lee discussed in “critical security studies” (Lee, 2011a).

India-Nepal Relationship after Post conflict Era

Normally, Nepal maintained her usual diplomatic, economic and military relations with India within and after the insurgency.  But the role of India with regard to Maoist insurgency has remained very complicated. Although Maoists were ideologically and practically anti-Indian, they received support[11] from India (Murthy, 2010b; Thapa, 2010a) during their Insurgency as well during signing of Comprehensive Peace Agreements in 2005, which pitched the path  towards peace process and constitution writing process through Constituent Assembly. Neither the direct rule imposed by the then king was accepted by India, nor the people’s uprisings to overthrown the despotic king were supported by India because she thought that the king did not consult with her before imposing the rule but she also did not want to overthrow the then king (Thapa, 2010a, p 48).

After the decade long political chaos, the winning of Maoists in the CA election have also affected Indo-Nepal relationship (Murthy, 2009). Although India was one of the first countries to congratulate Maoists, she was very much surprised with the election result (Murthy, 2010). Indian BJP leader Jaswanta Singh was not ready to accept Maoists as a ‘legitimate’ political actor to govern sovereign Nepal, even though Maoists secured one third of the majority (Adhiakry, 2008). He shared his extreme disappointment at the party national executive, arguing The coming to power of Communists in Nepal was in no way a good sign for India and this should be accepted (CNN-IBN, 2008)”. Why should the Maoist be the problem to Indian political party, if it is accepted by Nepalese people?

The relationship between Maoist and India even froze, when The Maoist-led coalition government broke a tradition flying to Beijing for the closing ceremony of Olympics.[12] Maoist thinks that India cannot be helpful in building a “New Nepal”[13] (CNN-IBN, 2008), thus, Prachanda, the then prime minister wanted to encourage and reassure Chinese investments and private run-business (BBC, 2008) to be less dependent with India. Furthermore, when Prachanda sacked chief of the army, Rookmangud Katawal for refusing to integrate PLA (Hindustan Times, 2009); India gave a pressure to reinstate him (Telegraph Nepal, 2010; Murthy, 2009). During the television address to nation, the then prime minister Prachanda said that his government was “encircled” from various actors and was not allowed to work independently (Yogi, 2009). Although he did not mention about the forces that restricted Maoist-led government to work independently, it was clear that he were referring to India.

Immediately after their resignation, the Maoist leaders started movement targeting India and arguing that the then prime minister, MK Nepal, is acting at the behest of New Delhi and India has become more vital than “civilian supremacy” (Murthy 2010). For instance, when the Indian army chief announced that Indian army is against the integration of Maoist combatants, immediately Nepal Army stood extremely against the integration. Maoists also boycott Indian activities, organized mass mobilization and protests in various point of Indo-Nepal borders and burned the treaties. To warm the relationship, the Indian embassy had to release the statement saying that they were not the view of the government (Murthy, 2010) but later Wikileaks published the secrete talk between Nepal and Indian foreign minister FM Mukherjee, where Mukherjee shared Indian increasing security concerned and demanded that the PLA should not integrate “under any circumstances”[14] (Wikileaks, 2011). Till today, the rehabilitation and integration of 19,602 verified Maoist combatants[15] (Yogi, 2009; Siwakoti, 2010, P72) have not been addressed, despites the peace accord in 2006. India seems to have been lobbing to discourage any group wise integration of the Maoists combatants.

Sometimes the statements and visits by diplomats make things worse in international repercussions. When the third time to elect the prime minister from the cabinet was failed, the visited of the former ambassador to Nepal, Shyam Saran on the ‘eve of forth election’ was understood as very important political visit. Some argued that it was to isolate Maoist, stopping them from forming a government and encourage the Madhesi to vote against Maoists. While other argued that the visit was to bring “peace and stability” and to help to form a national unity government in Nepal (Murthy, 2010a). Whatever reason was about the visit, state sovereignty has been violated to some extend to pursue Indian purpose as Barash and Webel mentioned about state sovereignty in the book peace & conflict studies (2002, p191). A month ago, Indian Ambassador to Nepal held a meeting with NC and expressed his concerned about the combatant integrations and CA election extension (eKantipur, 2011). Very recent development is another example of how India has been playing on Nepal’s politics. When the current government led by Jhalanath Khanal of NCP-UML (which has the strong supports of the Maoits) was planning to extend the deadline of constitution writing with two-third majority if other parties (mainly the Nepali Congress and few Madhesh-based parties) don’t agree on consensual extension, the Tarai-based party, Nepal Madheshi Forum was split. And many news reports quoting the high ranking politicians of the party have stated that there was the ‘hand of foreign forces’ and ‘politics of money’ behind the split. As a result of the split, the Maoists backed party was not in a situation to extend the deadlines as it wanted. This is how even the government formation, peace process and the constitution writing process has been complicated. It is understandable that India wants to establish the government that will fulfill her interest in Nepal, which Dunne defines state as anarchic system.[16]


            State sovereignty means “equality of states,” “exclusive representation,” “non-interference,” “monopoly of force,” “identity,” and “no higher authority within a state” (Lee, 2011) but it has been challenged and denied in many aspects through poverty, illiteracy, inequality, international relation and globalization. The Nepal’s case that I presented above clearly supports it. The new definition of sovereignty from responsibility to protect (R to P) defines sovereignty is a protection of its population, and if for some reason state cannot or will not work, the international community has the residual responsibility to intervene” (Gomez, 2011; Lee 2011b), that means sovereign state should fulfill “state responsibility” as a provider, if not it will lose its legitimacy to claim as a “sovereign state” in the eyes of the international community. However, it is equally important to focus on how sovereignty is granted in realism, for, every state’s dignity because people have particular way of understanding state and sovereignty. Considering both definition of state sovereignty, Nepal is a sovereign state, and always has been seeking to maintain its independence from India. However, Nepal has been indirectly colonized by India historically.

Since 2008, both countries have given priorities to their bilateral ties during their diplomatic exchanges. There have been several talks and discussions with Indian leaders to revise the bi-lateral agreements (Rajamohan, 2004), but none of these talks have come to the concrete conclusion.[17] Thus, there is a need to think whether both countries should live on the bilateral relationship of the past, despites of Indian imperialism and “big brother attitudes”. India should prepare to change her attitude, recognize Nepalese expectations to bring peace and foster democracy, stops splitting the political parties and accept Nepal as a sovereign state, rather than viewing Nepal through a colonialist lens.
It will be a great mistake for India if she thinks that “the strong do what they have the power to do and the weak accept what they have to accept (Dunne, 1999; p111).” The lesson to be learnt from Indo-Nepal relationship is that liberal democratic states are not always peaceful as we have imagined and thought. They do not immediately go to the war, but there is a high probability that they can involve in the war in the coming future when their relationship gets colder. Because, democratic values, as Bruce Russett argues, will not eliminate war, but power and strategic consideration affect states’ decisions to fight each other (Baylis, 1999, p202). Therefore, there is a great need of collaboration and cooperation to remove all types of discrimination between Nepal and India, but simultaneously, Nepal has to regulate the border to develop and fulfill the national interest as India has been increasingly concerned about its security in recent years when it faces growing challenges both form terrorist attacks and the Indian Maoists security threat.

As Nepal has historically remained an Independent nation and, in Thapa’s words, ‘no foreign flag has ever flown over our land like any other independent nation, people of Nepal hold a perpetual desire to have a dignified sovereign existence and a slavish puppet state would be intolerable’ (IPCS, 2010). Nepalese people, who are more aware about the history and are more mobilized, will always defy any interference and ill-treatment to them from any countries. In the globalized world, the existence, security, peace and development are all interdependent. Hence, India as an immediate neighbor of Nepal should do away with its traditional diplomacy towards Nepal and behave it as a separate independent nation – which is good for India’s long term security interests as well.

[1] After the agreement, India have permitted to provide about 15 transit routes within Indian territory and six customs-post along Nepal-India border.
[2] According to Paul, Nepal has the highest (85000 Mega Watt) potential to produce hydropower in the region.
                [3] It is also known as People’s Movement because Nepalese gained sovereignty to influence social, economical and political institution in state formation. It restores multi-party democracy with a bicameral legislation, rule of law, independent judiciary and a catalogue of fundamental human rights. It has brought four successive democratic achievements like “legalization and freedom of political parties”, “abolition of all Panchayat institutions”, “drafting constitution against the prerogative of the king” and “constitutional monarchy.” The popular movement restored the democracy after the 49 days demonstrations.
[4] The UFL consists of seven left parties: Marxist-Leninist, Marxist, Fourth Convention, Rohit, Verma, Manandhar and Amatya. It was also supported by students, civil society organizations such as I/NGOs, intellectuals, professors, teachers, students and professionals, which was 49 days popular movement.
[5] According to the CIA fact book, Nepal shares 1690 kilometers with India in three sides of Nepal. The number of disputes is still debatable.
                [6] During the political chaos, India remains the first choice for a large ‘illiterate,’ ‘unskilled’ and ‘marginal’ population, which consists of almost 80% of the total population of Nepal because of the open unregulated border.
[7] The agreement provides the full ‘autonomy’ and ‘responsibility’ to India in making Nepalese lives more secure from the affect of barrage regardless of Nepalese own territory. With the consideration of the agreement, India is responsible to compensate the loss of land from the barrage because the agreement.
[8] The export of Vanaspati (vegetable fats), acrylic yarn, copper products and zinc oxide has imposed tariff-rate quote 100000, 10000, 7500 and 2500 metric tons per year respectively by the government of Nepal. Nepali Vanaspati takes the full market of India which winds up some Vanaspati manufacturers in Eastern India because they were unable to meet the competition. For more information on the tariff quota, please follow the link:
           [9] Dabur Nepal Pvt. Ltd. is a joint venture of Dabur India Ltd that owned 80% of the total investment started on November 1992. The company produces herbal hair oil, toothpowder, glucose-D, Confectionary, fruit juice, perfumes, honey processing and medicinal plants.
             [10] According to Barash and Webel, Imperialism refers to the policy of extending one’s rule over other, foreign people. For more information, please refer the book Peace and Conflict Studies, p.248.
         [11] Maoists were operating from Indian soil during insurgency from 1996 to 2006 and the India was one of the main key players to bring the Maoist in the mainstreams of politics in Nepal.
         [12] Nepal has a long historical tradition that every newly elected prime minister should first visit India after they are elected.
         [13] It is assumed that the New Nepal will actively fight against all the discrimination including women, dalit so-called untouchable, and underprivileged & disadvantages groups of Nepal. It will be a federal state that gives the right of autonomy and self determination to all cultural and ethnics groups
      [14] Although the secrete talk took place on 6/18/2007 but it was only published on March 15, 2011. FM also demanded to punish Maoists for their abuses.
       [15] Previously the registered Maoist combatants were 31,318 but only 19,602 fulfilled the standard requirements as stated in the June 2008 agreement.
       [16] For more information please refer to the Chapter “Realism” by Timothy Dunne in the book, the Globalization of world Politics, An introduction to International Relations.
      [17] One of the discussions was during the Maoist-led government in 2008, where the prime ministers of both countries agreed to review, adjust, and update all the treaties and agreements that has been signed between these countries since 1950 and released the joint statements. 


  1. thanks for sharing.

  2. Thanks for your grateful informations, am working in, asian affairs news magazine.
    Try to post best informations like this always
    Indo-Pak relations: If the mountain won't come to Manmohan singh

  3. after long time this type of analysis by nepalese..

  4. Thank you very much for sharing. It was very informative reading your article.

  5. In politics, it is said “No one is permanent enemy or friend“. In our case, #Nepal and #India could neither remain a friend nor an enemy, emerging Nepal-India relation into a special relationship.
    Also read and suggest :