1. AN INITIATIVE OF SHIVNANDANI INDUSTRIES PVT LTD AND JAGDAMB JANAKI NAWAL JANAKI
SOCIETY
Indo Nepal Relationship
CompiledbyCol Mukteshwar Prasad(Retd), MTech,CE(I),FIE(I),FIETE,FISLE,FInstOD,AMCSI
Contact -9007224278, e-mail –muktesh_prasad@yahoo.co.in
for book ”DecodingServicesSelectionBoard” and SSB guidance and training at Shivnandani Edu and
Defence Academy
6/9/2015

2. India-Nepal Relations
OVERVIEW
With an area of 147,181 Sq. Kms. and a population of 29 million, Nepal shares a border of about
1850 Kms with five Indian States – Uttarakhand, Uttar Pradesh, Bihar, West Bengal and Sikkim.
An estimated 6 million Nepalese live and work in India. As close neighbours , India and Nepal
share a unique relationship of friendship and cooperation characterized by open borders and
deep-rooted people-to-people contacts of kinship and culture. Both countries share a long
tradition of free movement of people across the borders.
2. India is Nepal’s largest trade partner, the largest source of foreign investment and of tourist
arrivals. Bilateral trade between India and Nepal has increased substantially since the signing of
the Trade Treaty in 1996. According to figures for the Nepalese fiscal year 2069/70 (ending July
2013), bilateral trade with India accounted for 66.% of total Nepalese external trade. India is
Nepal’s largest source of foreign investment, accounting for 40% of the total foreign investments
in Nepal.
Recent Exchange of Visits Since 2011
3. From Nepal:
(i) Gen Rana was conferred the title of the honorary General of the Indian Army by President
Shri Pranab Mukherjee at a special investiture ceremony. Gen. Gaurav Rana again visited India
from 10-17 June 2014 at invitation of Chief of Indian Army Staff, to witness the attestation
parade at IMA, Dehradun.
(ii) Mr. Madhav Prasad Ghimire, Minister of Foreign and Home Affairs, GoN, visited India from
14-15 January 2014.
(iii) Mr. Shankar Prasad Koirala, Minister of Finance, Industry, Commerce & Supplies, visited
India from 16-17 January 2014 to attend the annual meeting of ADB.
(iv) Mr. Khag Raj Adhikari, Minister of Health & Population visited India on 26–27 March
2014 to attend the SAARC Heath Ministers’ Conference held in New Delhi.
(v) Mr. Sushil Koirala, Prime Minister of Nepal visited India to attend the swearing in ceremony
of Prime Minister Shri Narendra Modi on 26-28 May 2014.
4. From India:
(i) Dr. Karan Singh, Member of Rajya Sabha and President, ICCR visited Nepal from 14-16
February 2014 to inaugurate the Conference on ‘Cooperative Development, Peace and Security
in South Asia’. Dr. Karan Singh called on President Dr. Ram Baran Yadav and Prime Minister
Sushil Koirala, besides meeting a cross section of political leaders.

3. (ii) Shri Akhilesh Yadav, Chief Minister of Uttar Pradesh, was on a private visit to Nepal from
17-18 February 2014. He called on President Dr. Ram Baran Yadav and Prime Minister Sushil
Koirala.
(iii) Smt. Sushma Swaraj, Minister of External Affairs, visited Nepal from 25-27 July 2014 for
the third India-Nepal Joint Commission Meeting.
(iv) Prime Minister Shri Narendra Modi visited Nepal from 3-4 August 2014. This was the first
PM-level bilateral visit to Nepal in 17 years.
(v) Shri Rajnath Singh, Home Minister, visited Nepal from 18-20 September 2014 to attend the
6th SAARC Home Ministers’ meeting. During the visit, he met President, PM, Deputy PM &
Home Minister and leaders of major political parties of Nepal.
A. POLITICAL AND SECURITY ISSUES
India - Nepal 1950 Treaty:
5. The India–Nepal Treaty of Peace and Friendship of 1950 established the framework for
unique ties between the two countries. The Treaty recognizes ground realities and protects
Nepalese economic interests by providing 'national' treatment for Nepalese citizens in India in
matters of entry, movement, residence and business. During former PM Prachanda’s visit to
India in September 2008, both sides agreed to review, adjust and update the 1950 Treaty of
Peace and Friendship and other agreements while giving due recognition to the special features
of the bilateral relationship. The issue came up for discussion during the Joint Commission (JC)
meeting held in Nepal on 26 July 2014 where both sides agreed upon the need to review, adjust
and update the Treaty of Peace and Friendship of 1950, and other bilateral agreements, reflecting
the current realities as agreed earlier. The JC decided that the matter would be discussed at the
Foreign Secretary level mechanism.
Border Strip Maps:
6. The India-Nepal Boundary has been demarcated. Strip maps pertaining to about 98% of the
boundary have been finalized and initialled. These maps are now to be signed at the
plenipotentiary level. The final signed maps would provide border agencies on both sides a
contemporary and mutually agreed frame of reference. During the JC meeting held in Nepal in
July 2014, it was decided that the Foreign Secretary level mechanism would work on the
outstanding Boundary issues including Susta and Kalapani on priority basis, taking technical
inputs from Boundary Working Group, as necessary. The first meeting of the India-Nepal
Boundary Working Group (BWG) was held in Kathmandu from 17-19 September 2014 to
discuss matters relating to repair, reconstruction and maintenance of boundary pillars on the
India-Nepal border. The two delegations were led by the respective Surveyor Generals of the
two countries. At the end of the meeting, Agreed Minutes were signed by the two sides on 19
September 2014.
Institutional Mechanisms:

4. 7. Security issues of mutual concern are discussed with the Government of Nepal at the existing
bilateral mechanisms, including the Annual Home Secretary-level talks, the Joint Working
Group on Border Management, Bilateral Consultative Group on Security Issues and the Border
Districts Coordination Committee Meetings at the local level. The Government of Nepal has
assured that it will not allow its territory to be used for any activity against India. The last Home
Secretary level talks were held in Kathmandu from 1-3 June 2013.
DEFENCE COOPERATION
8. India has played a leading role in helping the Nepal Army (NA) in its modernization through
provision of equipment and training.
9. General Bikram Singh, (then COAS), Indian Army visited Nepal from 10-14 Jul 2012 and was
conferred the Honorary rank of General of the Nepal Army, during the visit. Recently, the 7th
Indo-Nepal Army Battalion level Joint Exercise was conducted in India wef 18 Aug to 31 Aug
2014.
10. General Gaurav SJB Rana, COAS NA was also conferred the honorary rank of General of
the Indian Army by the President of India on 08 Jan 2013.
Gorkha Soldiers in the Indian Army
11. The Gorkha regiments of the Indian Army are raised partly by recruitment from hill districts
of Nepal. Currently, about 40,000 Gorkha soldiers are serving in the Indian Army. Pensions, in
excess of Indian Rupees 900 crores, is disbursed by the Indian Army to about 1,25,000 retired
Gorkha soldiers who have served in the Indian Army and other Central and State Services.
There are 16 District Soldier Boards in Nepal, which arrange the disbursement of pensions and
take up welfare programmes for retraining, rehabilitating and assisting ex-Gorkha soldiers and
their families. Indian Army organizes recruitment rallies for Gorkha soldiers within Nepal for
identifying and recruiting Nepalese citizens with Indian Army.
Bilateral Consultative Group on Security Issues:
12. The 11th Meeting of the India-Nepal Bilateral Consultative Group (BCG) on Security Issues
was held in Kathmandu from 05-07 July 2014. The 12th BCG Meeting is scheduled to be held
in India. Proposal for the same is yet to be received.
B. TRADE
13. The previous trade treaty revised in 1996 can be considered as a turning point in the trade
relations between the two countries. Since 1996, Nepal’s exports to India have grown more than
eleven times and bilateral trade more than seven times; the bilateral trade that was 29.8% of total
external trade of Nepal in year 1995-96 has reached 66.6% in 2013-14. The bilateral trade grew
from IRs. 1,755 crores in 1995-96 to IRs.33259.2Crores (US$ 5.4 billion) in 2013-14. Exports
from Nepal to India increased from IRs. 230 crores in 1995-96 to IRs. 3713.5crores (US$ 605
million) in 2013-14 and India’s exports to Nepal increased from IRs. 1,525 crores in 1995-96 to

5. IRs.29545.6crores (US$ 4.81 billion) in 2013-14.Main items of exports from India to Nepal are
petroleum products, vehicles and spare parts, mild-steel billets, machinery and parts, medicines,
hot and cold rolled sheets, wires, rods, coils, bars, electrical equipments, cement, threads and
chemicals. Main items of exports from Nepal to India are polyester yarn, textiles, jute goods,
threads, zinc sheet, juice, cardamom, wire, ms pipe, copper wire rod.
Indian Investment in Nepal:
14. Indian firms are the biggest investors in Nepal, accounting for about 40% of total approved
foreign direct investments. Till 15th July, 2013, the Government of Nepal has approved a total
of 2652 foreign investment projects with proposed FDI of Rs. 6325.50 crore. Indian ventures
lead the list with 566 projects and proposed FDI of Rs. 2539.2 crore. There are about 150
operating Indian ventures in Nepal. They are engaged in manufacturing, services (banking,
insurance, dry port, education and telecom), power sector and tourism industries. Some large
Indian investors include ITC, Dabur India, Hindustan Unilever, VSNL, TCIL, MTNL, State
Bank of India, Punjab National Bank, Life Insurance Corporation of India, Asian Paints,
CONCOR, GMR India, IL&FS, Manipal Group, MIT Group Holdings, Nupur International,
Transworld Group, Patel Engineering, Bhilwara Energy, Bhushan Group, Feedback Ventures, RJ
Corp, KSK Energy, Berger Paints, Essel Infra Project Ltd. and Tata Power, India etc.
Inter-Governmental Committee (IGC):
15. An IGC,headed by Commerce Secretaries, looks into all issues relating to trade, transit and
cooperation to control unauthorized trade between the two countries. The last meeting was held
in Kathmandu on 21st – 22nd December, 2013. Some of the important agreement reached during
the meeting was to allow Nepal to bring imported vehicles ‘on their own power´ from the
Kolkata port; use of Jogbani-Biratnagar and Nautanawa-Bhairahawa customs points, in addition
to Raxual-Birgjunj, for importing bulk cargo from third countries. Most of the other agreements
reached were aimed at promoting Nepal´s international trade, including with India, the largest
trading partner, at a time when Nepal was suffering an ever-increasing trade deficit.
India-Nepal Joint Commission
16. A delegation led by External Affairs Minister Mrs. SushmaSwaraj visited Nepal from 25–27
July 2014 for the third India–Nepal Joint Commission Meeting. The Joint Commission agreed
to revive the Foreign Secretary level mechanism which would also discuss review of all bilateral
agreements, decided to establish an Eminent Persons Group on Nepal–India relations &finalized
its Terms of Reference, and directed the Nepal-India Boundary Working Group to commence
field work at the earliest. Both sides emphasized the need to promote greater collaboration and
cooperation in combating cross–border crimes. The Nepalese side raised the issue of India’s
Small Development Programme in Nepal, which India agreed to align with Nepal’s development
programmes and priorities. The Nepalese side expressed its commitment to resolving the long–
pending issue of benefits to the Indian teachers working in Nepal. The Joint Commission
appreciated the ongoing bilateral cooperation in culture and tourism sectors and agreed to further
expand and deepen cooperation in these fields. It discussed the possibilities of extending
cooperation for development and conservation of Pashupati, Lumbini, Janakpur and Baraha-

6. chhetra areas. Both sides expressed satisfaction over the near completion of river training works
over Lalbakaiya, Bagmati and Kamala and discussed other river training works over Dodha,
West Rapti, Mohana and Lakhandehi. The next JC meeting would take place in New Delhi next
year.
PM’s visit to Nepal
17. Prime Minister ShriNarendraModi paid an official visit to Nepal from 3-4 August 2014 at the
invitation of Prime of Nepal SushilKoirala. PM was accompanied by ShriAjitDoval, National
Security Advisor, Ms. Sujatha Singh, Foreign Secretary and a delegation comprising senior
officials of Government of India. This was the first PM-level bilateral visit to Nepal in 17 years.
PM NarendraModi was the first foreign leader to address the Constituent Assembly (CA)-cum-
Legislature Parliament of Nepal. A Nepalese business delegation from their apex chambers also
called on PM. PM announced a US$ 1 billion concessional Line of Credit, to be used by Nepal
for implementing important infrastructure projects in the area of Nepal’s priority. A Nepal-
Bharat University Students Exchange Programme and 40% increase in ITEC slots were
announced. The two Prime Ministers witnessed the signing of the Exchange of Letters regarding
Terms of Reference of the Pancheshwar Development Authority (PDA). Both sides agreed that
the two Governments would set up the Authority within 6 months and finalize the DPR of
Pancheshwor Development Project and begin implementation of the Project within one year.
The first meeting of the PDA was held in Kathmandu on 22-23 September, 2014, which
finalized and approved the Statue of the Authority. Two MoUs, on Cooperation in the Goitre
Control, and on Cooperation between Doordarshan and the Nepal Television, were also signed.
C. ECONOMIC CO-OPERATION
Aid to Nepal:
18. Government of India provides a generous aid package to Nepal. Our economic cooperation
with Nepal under ‘Aid to Nepal’ is broad based with specific focus at the grass-root level. A
number of projects have been implemented in the areas of infrastructure, health, water resources,
rural and community development and education. The economic assistance extended to the
GON during 2008-09 under ‘Aid to Nepal’ budget was Rs. 120 crore, 161 crore in FY 2009-
2010, Rs. 168 crore in FY 2010-2011, Rs. 191 crore in FY 2011-12, Rs.300 crore in FY 2012-13,
Rs.380 crore in 2013-14 and Rs.450 crore for FY 2014-15 is being extended.
Ongoing Projects:
19. There are around 35 intermediate and large projects under various stages of implementation
in Nepal. These include the setting up of Emergency-cum-Trauma Centre (Rs. 100 crore);
ManmohanAdhikari Polytechnic (Rs. 25 crore) at Biratnagar; Construction of a Polytechnic at
Hetauda (Rs. 38 crore), providing Indian faculty support to BP Koirala Institute of Health
Sciences at Dharan (Rs. 1 crore per annum for five years), Installation of 3700 shallow tube
wells in various districts across Nepal (Rs. 22 crores), and assistance for construction of 421
sitting capacity auditorium at Lumbini. India has also provided 442 ambulances and 86 school
buses to various agencies in Nepal.

7. Indian Assistance in development of Border Infrastructure Projects:
20. The border infrastructure projects including development of about 1450 km long road
network in Terai region, five cross- border rail links and development of four integrated check-
post. Approval of cabinet was obtained for these projects in August 2009.
(i) Terai Roads
India and Nepal signed the MoU for the development and construction of Roads in the Terai
region of Nepal in January 2010. Currently, 19 link/ postal roads covering a total distance of 605
km in the Terai districts are being constructed in Phase -I of the project with GoI’ financial
assistance totaling approximately Rs. 700 crores.
The implementation of the project would facilitate faster and convenient movement of people as
well as goods and services not only within the Terai roads but also cross-border movement to
Indian cities and towns on Indian national highways.
Phase–I will be followed by Phase–II which will cover about 845 kms of roads.
Overall progress of the project is somehow not so satisfactory due to non-availability of
completely encumbrance-free land from the GoN side to the contractors concerned. GoN is also
being reminded regularly to accelerate the process of relocation/shifting of utilities, such as
telephone and electricity lines, built- up structures, cluster of trees etc. from the right of way of
the roads. Though GoN side has taken several positive steps in this regard but this process needs
to be fast-tracked. In addition, clearance from the Department of Forests for the removal of trees
from project roads as well as for sourcing of construction material for the roads by the
contractors also needs to be accelerated by GoN for the timely completion of the project roads.
In view of the delay due to variety of factors, resulting in the lack of progress on entire stretches
allotted to the various contractors, it was decided in the last PSC Meeting in October 2013 to
immediately start construction work in a prioritized manner beginning with encumbrance-free
stretches, with the remaining stretches to be taken up as and when they are made available after
removal of encumbrances. Contractor for Packages 3, 4 & 5 (M/s Vishwa-BVSR JV, Hyderabad)
has stopped the work and the matter has been referred to Dispute Review Expert (DRE) by the
Ministry. Contractor for Packages 2 & 6 (M/s GVR Infra Projects Chennai) has also approached
the DRE against penalty imposed by the Consultant and other contractual issues.(Meanwhile,
GON is undertaking maintenance work on 15 roads for which reimbursement of actual
expenditure incurred by GON, (which may be approximately N.Rs.4.60 crores) will be sought by
GON on completion of the maintenance work.)
(ii) Integrated Check Posts (ICPs)
India signed anMoU with GoN for the construction of the ICPs at four major border points along
the India-Nepal border. These are:-

8. i) Raxaul (India)- Birgunj (Nepal)
ii) Sunauli (India)-Bhairhawa (Nepal)
iii) Jogbani (India)- Biratnagar(Nepal); and
iv) Nepalgunj Road (India)-Nepalgunj(Nepal).
Both sides decided with mutual consent to undertake work on Raxaul (India) - Birgunj (Nepal)
as well as Jogbani (India) – Biratnagar (Nepal) in the first phase of project. The estimated cost
of the Phase – I of the project on Nepalese side is approx. Rs. 269 crores. The construction work
for ICPs at Raxaul, Jogbani and Birgunj has already begun.
(iii) Rail Links
India signed anMoU with GoN during the visit of President of Nepal to India in February 2010
for the construction of rail links at 5 locations on the India-Nepal border. These are:
S.No Location Length (km) Estimated cost ( INRS. crores)
India Nepal
1. Jogbani Biratnagar 17.65 197.27
2. Jaynagar Bardibas 68.00 446.72
3. Nepalgunj road Nepalgunj 12.11 48.95
4. Nautanwa Bhairahawa 15.30 176.14
5. New Jalapaiguri Kakarbhitta 70.00 357.94
TOTAL 183.06 1327.02
MEA had appointed M/s RITES Limited for the preparation of the preliminary Traffic-cum-
Field Service for the project. Railway board has nominated IRCON as the implementing agency
for the project.
Small Development Projects (SDPs)
21. SDP Programme, which covers projects less than NRs 5 crore (approx IRs. 3.125 crore),
focuses on the critical sectors of health, education and community development. So far 227
Projects have been completed and 230 Projects are under various stages of implementation in
almost all the 75 districts of Nepal with a total outlay of over IRs 500 crore. MoUs for 14 new
SDP projects worth Rs.34.57 crore were signed in 2013-14. 15 MoUs have been signed in the
current FY so far.

9. Problems being faced by GoI assisted projects in Nepal:
22. There has been delay in the implementation of some of the GoI assisted projects in Nepal due
to the delay on the part of the GoN in handing over the required land to the contractors for
construction to commence. The construction of the Terai Roads, Integrated Check Posts and the
Rail Links has been delayed due to this. Procedural delays in the granting of clearances by
concerned authorities of GoN have also hindered the progress. Often, certain political parties
have also politicized some of the GoI aided projects to suit their political interest. There was also
an attack on our Ambassador while on way to inaugurate a GoI assisted SDP in Solukhumbhu
district of Nepal. There have also been delays from our side in processing, approval and release
of funds, particularly in case of large and intermediate projects.
D. WATER RESOURCES
23. Cooperation in Water Resources and River Training are one of the most important areas of
our bilateral relations and has immense potential. It is estimated that about 250 small and large
rivers flow from Nepal to India and constitute an important part of the Ganges river basis. These
rivers have the potential to become major sources of irrigation and power for Nepal and India,
but without planning, are a source of devastating floods in Nepal’s Terai region, and states of
Bihar and Uttar Pradesh in India. A three-tier bilateral mechanism which was established in 2008
to discuss all issues relating to cooperation in water resources and hydropower between the two
countries has been working well. All the meetings have been conducted on and off site regularly.
Construction of Embankments:
24. In the area of river training and embankment construction, Government of India has been
providing assistance to Nepal for strengthening and extension of embankments along Lalbakeya,
Bagmati and Kamla rivers. Started in 2008, with the present assistance, the total grant assistance
already disbursed for embankment construction along these rivers, stands at NRs. 3,284.4
million. Separately, India has committed grant assistance of NRs.226 million for flood
protection works along Gagan, Trijuga, Lakhandei, Sunsari, Kankai and Kaligandaki rivers in
Nepal. The flood protection works along Trijuga, Kankai and Lakhandei rivers have been
already completed. It is being considered to extend this assistance for construction of
embankments to other rivers as well.
Power Exchange and Trade:
25. India and Nepal have a Power Exchange Agreement since 1971 for meeting power
requirements in the border areas of the two countries taking advantage of each other's
transmission infrastructure. There are more than twenty 132 KV, 33 KV and 11KV transmission
interconnections which are used both for power exchange in the bordering areas and power trade.
For enhanced transmission of electricity, short term augmentation of the existing grid is
completed, for the medium term and long term the new transmission lines projects are being
executed. An Agreement on “Electric Power Trade, Cross-Border Transmission Interconnection
and Grid Connectivity" popularly known as Power Trade Agreement (PTA) was initialled
between GoN and GoI on September 4, 2014. The Agreement was signed on 21st October, 2014

10. in Kathmandu between the Power Secretary, Government of India, and Energy Secretary,
Government of Nepal.
Lines of Credit (LoCs):
26. Government of India (GoI) has extended two Lines of Credit (LoC) of USD 100 million and
USD 250 million, to Government of Nepal (GoN) in the years 2006-2007 and 2011-12
respectively for the infrastructure projects. During his visit to Nepal in August, 2014, Prime
Minister announced a fresh LoC of USD 1 billion from EXIM Bank to be utilized for projects in
the area of hydropower, irrigation and highways. A draft of the LoC Agreement was shared with
the GoN which was, after discussions, intialled on 4th November, 2014 at Kathmandu. This may
be formally signed during the visit of the PM to Nepal in November 2014. The first meeting of
the “LoC Review Mechanism” between the Governments of India and Nepal was held in
Kathmandu on 4th July, 2014. The meeting reviewed the progress made on the projects under the
existing Lines of Credit (LoC) of USD 100 million and USD 250 million, extended by
Government of India to Government of Nepal through EXIM Bank of India.
E. CULTURE AND EDUCATION
Education:
27. The Government of India grants approximately 3000 scholarships every year to Nepalese
students, out of which 2200 scholarships are meant to study in Nepal and the balance 800 to
study in India. For studying in Nepal, 2000 scholarships are awarded to students of high school
under Mahatma Gandhi Scholarship Scheme and 200 for pursuing undergraduate courses under
Golden Jubilee Scholarship Scheme. For studying in India, the Mission conducts a COMPEX
examination each year for Nepalese students to study in BE/B.Pharma/B.V.Sc/B.Sc (Dairy
Tech)/B.Sc (Ag) courses in India, which has been growing in popularity with every passing year.
10 seats for B.Sc. (Nursing) have been allotted in 2014. The Mission further provides
scholarships under different schemes in the following fields: BBA, BCA, BA, Music & Fine
Arts, B.Sc, Hotel Management, MBA, MCA, MA, M,Sc, M. Tech, ME, M.Sc (Ag), Ph.D,
Ayurveda, Homeopathy. 33 seats for studying from Class VI to IX and Class XI are provided to
Nepalese students in Army Public Schools at DhaulaKuan, Noida and Pithoragarh. There are 250
slots for short-term training in India for Government/non-government employees of Nepal under
ITEC Scheme/Colombo Plan. Under a newly announced ‘Bharat-Nepal Shiksha Maitri
Karyakaram’, the first batch of 20 students left and joined Calcutta University for the programme
from 1-25 November 2014.
B.P. Koirala India-Nepal Foundation (BPKF):
28. BPKF was set up in 1991 for fostering educational, cultural, scientific and technical
cooperation between India and Nepal. The last meeting was held from 4-7September 2014 at
Srinagar, Kashmir in India where a number of projects were approved. An Indian Culture Centre
is functioning in Kathmandu since August 2007. BPKF is managed by a ten member Board of
Directors headed by the two Co-Chairpersons. The Ambassador of India are the Co-
Chairpersons of the Board. The two Joint Secretaries in-charge of India and Nepal respectively

11. JS (North) and JS (South Asia), MoFA along with Deputy Chief of Mission, Embassy of India
are ex-officio members of the Board of Directors.
F. EXCHANGE OF PARLIAMENTARIANS
29. As part of this exercise, an 11-member Young Parliamentarian delegation comprising
Constituent Assembly Members from major political parties visited India from November 21-27,
2010. A Parliament Secretariat delegation headed by Mr. Thakur Prasad Baral, Secretary,
Parliament Secretariat of Nepal, visited India in April/ May 2013. A 15-member women
Constituent Assembly members’ delegation visited India on August 8-13, 2011. A delegation of
Young Parliamentarians from Nepal visited India from March 3 to March 10, 2012.
30. A 6-member Young Leaders delegation, consisting of Indian Parliamentarians, visited Nepal
on March 26-29, 2011.
31. An India-Nepal Parliamentary Friendship Group was formed in June 2011 and reconstituted
in July 2011. The Parliamentary Friendship Group is being reconstituted in view of formation of
a new Constituent Assembly in Nepal and Lok Sabha in India.
G. EXCHANGE OF BUSINESS DELEGATIONS
32. A Nepalese delegation consisting of economic and business journalists from the Society of
Economic Journalists (SEJON) visited India from 21-23 February 2013 to enhance awareness
about economic development and latest investment scenario of India in Nepal. A delegation
consisting of officers from the Ministry of Industry, Government of Nepal, the Special
Economic Zone (SEZ) Development Committee of Nepal and the Society of Economic
Journalists of Nepal, visited New Delhi from May 27-29, 2014 to gain exposure to and
education on various aspects involved in the running of a SEZ including understanding the
modalities & other issues and to witness the working of a SEZ. They visited the NOIDA SEZ
besides meeting officers from relevant Ministries of the GoI. A six-member delegation from
Nepal Telecommunications Authority of Nepal visited India from June 17-19, 2014, to witness,
learn and experience developments in the key sectors of telecom. During their visit to India they
met with Indian authorities in the telecom sector, including Shri M. F. Farooqui, Secretary,
Department of Telecommunication, GoI.
Controversy over Lipu-Lekh Pass: Is Nepal’s Stance Politically Motivated?
After lying dormant for years, the Nepal-India border dispute over Kalapani has once again
become embroiled in controversy. Nepal claims that the Lipu-Lekh Pass, which was mentioned
in the joint statement of May 15, 2015 during Prime Minister Modi’s visit to China, is a disputed
tri-junction in which Nepal has an equal share. The joint statement states: “…The two sides
agreed to hold negotiation on augmenting the list of traded commodities, and expand border
trade at Nathu La, Qiangla/Lipu-Lekh Pass and Shipki La.” Nepalese media, academia, civil
society and ruling and opposition party leaders have all expressed concern over this development
and have demanded that China and India should withdraw the mention of Lipu-Lekh in the joint
statement. They have also argued that such a mention tantamount to disrespect for Nepal’s

12. sovereignty and a threat to its territorial integrity. Nepalese Prime Minister Sushil Koirala is
under pressure from his coalition partners to lodge a formal diplomatic protest against section 28
of the 41-point India-China Joint Statement. The issue has intensified public debate in Nepal at a
time when India and Nepal have agreed to resolve the existing border dispute amicably through
bilateral mechanisms during Modi’s August 2014 visit to Kathmandu. In this regard, the two
countries have already established a joint boundary technical committee to demarcate the border
by 2019.
Nepal’s position on Kalapani and Lipu-Lekh Pass appears to be politically motivated. Border
issues with India often dominated the country’s foreign policy during the Communist and Maoist
regimes in Kathmandu. Further, ultra-nationalist groups on both the left and right of the political
spectrum have been spreading anti-India sentiments and demanding a greater Nepal to gain
political mileage. While India has agreed to resolve the issue amicably, Nepal’s China card -
emphasis on China to become a party to the dispute – is likely to unnecessarily bring stress on
bilateral relations. While the territory is geographically a tri-junction, it is disputed only by India
and Nepal.