India–Nepal and India–Bhutan Relations

India–Nepal: "roti-beti ka rishta"

India and Nepal share an open border of about 1,751 km touching five Indian states: Uttarakhand, Uttar Pradesh, Bihar, West Bengal and Sikkim. Their ties of religion, culture, language and kinship are described as "roti-beti ka rishta" (bonds of bread and marriage). Lumbini (the Buddha's birthplace) and Janakpur (Sita's birthplace) are in Nepal; Pashupatinath and Muktinath draw Indian pilgrims. Millions of Nepalis live and work in India, and Gorkha soldiers have served in the Indian Army since independence. The Agnipath scheme (2022) caused concern in Nepal, which paused Gorkha recruitment.

The 1950 Treaty of Peace and Friendship

The treaty provides for:

• national treatment for each other's citizens in residence, property, trade and employment;
• an open border;
• consultations on security threats;
• Nepal's arms imports to go through India.

Some Nepali political groups call it unequal and demand revision. An Eminent Persons Group (2016–18) was set up to review all bilateral agreements; its report has not been formally received.

Irritants and tensions

• 2015 constitution and blockade: Nepal's new constitution (September 2015) sparked protests by the Madhesi community over representation, and a supply disruption at the border followed. Many Nepalis blamed India for an "unofficial blockade"; India denied it. The episode pushed Nepal towards China, leading to transit agreements and Nepal joining the BRI in 2017.
• Kalapani–Lipulekh–Limpiyadhura: after India opened a road to Lipulekh Pass in 2020 (the route of the Kailash Mansarovar Yatra), Nepal issued a new political map including these areas and amended its constitution. India rejected this as an "artificial enlargement" of territorial claims. A Susta dispute in the Gandak river area also exists.
• Political instability: frequent changes of government in Kathmandu, and youth-led protests in September 2025 that brought down the government and led to an interim administration.

Cooperation

• Trade: India is Nepal's largest trading partner and the main source of FDI. Nepal's trade passes through Indian ports, such as Kolkata and Visakhapatnam.
• Connectivity:
• The Motihari–Amlekhgunj petroleum pipeline (2019) was South Asia's first cross-border petroleum pipeline.
• Integrated Check Posts at Birgunj and Biratnagar.
• The Jaynagar–Kurtha railway.
• The cross-border Raxaul–Kathmandu railway is planned.
• Hydropower: Nepal has large hydropower potential. Key projects:
• Mahakali Treaty (1996): the Pancheshwar project has stalled.
• Arun-III (SJVN).
• A long-term agreement for India to import 10,000 MW of electricity from Nepal over ten years (2024).
• Nepal exports power to India and, via Indian grids, to Bangladesh, a trilateral first in 2024.
• Disaster relief: India launched Operation Maitri after the 2015 earthquake.

India–Bhutan: a model relationship

India and Bhutan share a border of about 699 km with Sikkim, West Bengal, Assam and Arunachal Pradesh. Diplomatic relations were established in 1968. The 1949 Treaty of Friendship included a clause under which Bhutan would be "guided" by India's advice in external affairs. The revised treaty of 2007 replaced this with cooperation on issues of national interest, reflecting Bhutan's full sovereignty.

Hydropower: the backbone of the economy

India built and buys power from Bhutan's hydroelectric projects:

• Chukha (336 MW)
• Kurichhu
• Tala (1,020 MW)
• Mangdechhu (720 MW, 2019)
• Punatsangchhu-II (in progress)

The financing model is a mix of grants and loans. Electricity is Bhutan's largest export. India and Bhutan have also cooperated on the Basochhu project and on energy partnerships.

Development and connectivity

• India has funded Bhutan's Five-Year Plans.
• Bhutan uses India's RuPay card and BHIM-UPI (2021).
• A satellite was jointly developed by ISRO and Bhutan (2022).
• The Gelephu Mindfulness City project, announced by Bhutan's King in 2023, is a special administrative region near the Assam border. India supports connectivity to it, including proposed rail links such as Kokrajhar–Gelephu.

Strategic importance: Bhutan is a buffer near the Siliguri Corridor ("chicken's neck"), the narrow strip connecting north-east India to the rest of the country. That is why the Doklam standoff of 2017 mattered to India. Bhutan and China have no diplomatic relations but hold boundary talks; a cooperation agreement on a "three-step roadmap" was signed in 2021. India watches these talks closely.

Bhutan's priorities: Gross National Happiness as its development philosophy, carbon negativity, and economic diversification (Bhutan graduated from Least Developed Country status in 2023). Its concerns include youth unemployment and migration.

Comparing the two relationships

Nepal's politics is turbulent and nationalism is often defined in relation to India. Bhutan has consistently prioritised close ties with India. Both depend economically on India and offer hydropower potential. Both also face China's growing outreach. India's approach should respect sovereignty and avoid any perception of interference, deliver projects on time (India has had problems with delayed projects), and increase people-to-people exchanges.

Practice: Mains question

*"Hydropower cooperation has the potential to transform India's relations with Nepal and Bhutan." Discuss. (150 words)*

The China factor in the Himalayas

China has stepped up engagement with Nepal through the Trans-Himalayan Multi-dimensional Connectivity Network, a proposed Kerung–Kathmandu railway, the 2016 transit agreement giving Nepal access to Chinese ports, and BRI projects. Its framework agreement on the BRI was signed in 2017 and a cooperation framework in 2024. Progress has been slow because of difficult terrain, financing terms (Nepal prefers grants to loans) and politics. India's advantages are geography, the open border, cultural ties and economic integration. Nepal's governments often balance between the two neighbours.

In Bhutan, China's boundary negotiations and its construction of villages in areas Bhutan claims have been reported. India's interest is to keep the Doklam plateau, close to the Siliguri Corridor, out of Chinese control.

People-to-people links

• Nepal: Indian and Nepali citizens can travel across the border without passports or visas. Indian currency is widely used in Nepal, and the Nepali rupee is pegged to the Indian rupee at 1.6. The Ramayana circuit and Buddhist circuit connect pilgrimage sites, and a bus service links Janakpur and Ayodhya.
• Bhutan: Indian citizens do not need visas. Bhutan levies a Sustainable Development Fee on tourists, which is lower for Indians. Many Bhutanese students study in Indian universities.

Way forward with Nepal

• Address the boundary question through dialogue. The Boundary Working Group has completed most demarcation, except Kalapani and Susta.
• Speed up projects, and use "Neighbourhood First" with sensitivity: avoid statements that appear interventionist.
• Expand power trade, which converts Nepal's water resources into revenue and supplies clean energy to India.
• Respond positively to the EPG process.
• Keep up development partnerships in education and health, such as the BP Koirala Institute of Health Sciences in Dharan, built with Indian assistance.

Common prelims traps

• Nepal is landlocked on three sides by India and to the north by China (Tibet).
• Sikkim borders Nepal, Bhutan and China.
• Bhutan's Wangchuck dynasty has ruled since 1907. Bhutan became a constitutional monarchy with its 2008 constitution.
• Bhutan joined the UN in 1971 with India's sponsorship.

Quick self-test

1. *Which five Indian states border Nepal?* Uttarakhand, Uttar Pradesh, Bihar, West Bengal and Sikkim.
2. *Which four Indian states border Bhutan?* Sikkim, West Bengal, Assam and Arunachal Pradesh.
3. *What did the 2007 treaty revision change?* It removed the clause on Bhutan being "guided" by India in foreign affairs and replaced it with cooperation on matters of mutual interest.