India–Nepal Relations: Key Events, Treaties and Bilateral Mechanisms

India and Nepal share a unique civilisational, geographic, and socio-economic partnership characterized by an open border and deep-rooted people-to-people ties, often called “Roti-Beti ka Rishta.” Bound by shared Himalayan geography and cultural linkages across the Terai plains, the bilateral relationship spans security, water resources, trade, and cross-border connectivity. This framework is anchored in historical treaties, specialized institutional mechanisms, and continuous infrastructure development.

Historical Evolution and Foundational Treaties

Sugauli Treaty (1816)

• Signed in March 1816 between the East India Company and the Kingdom of Nepal following the Anglo-Nepalese War (1814–1816).
• Established the Kali (Mahakali) River as Nepal’s western boundary and the Mechi River as its eastern boundary.
• Ceded territories in Kumaon, Garhwal, and parts of the Terai to British India, setting the territorial baseline for modern India-Nepal borders.

1923 Treaty of Perpetual Peace and Friendship

• Signed between British India and Nepal, providing formal recognition of Nepal’s independence and sovereignty.
• Introduced provisions for custom-duty-free transit of goods for Nepal through British Indian ports.

1950 Treaty of Peace and Friendship

• Signed on July 31, 1950, in Kathmandu by Indian Ambassador Chandreshwar Prasad Narain Singh and Nepalese Prime Minister Mohan Shamsher Jang Bahadur Rana.
• Established an open border allowing unhindered movement of people and goods between both nations.
• Article 6 and Article 7 grant reciprocal rights to citizens regarding residence, property ownership, trade, and employment opportunities.
• Article 5 mandates mutual consultation on defense matters and national security concerns.

Key Bilateral Treaties and Agreements

Treaty of Trade and Transit

• Revised periodically to govern bilateral commerce and Nepal’s transit access through Indian ports like Kolkata and Haldia.
• India serves as Nepal’s largest trading partner, accounting for over 60% of Nepal’s total external trade.
• Grants duty-free access for Nepali manufactured goods into Indian markets on a reciprocal basis.

Water Resources and Hydropower Treaties

• Kosi Agreement (1954): Focuses on flood control, irrigation, and power generation along the Kosi River basin; revised in 1966.
• Gandak Agreement (1959): Facilitates the construction of the Gandak Barrage at Valmikinagar for irrigation in Bihar, Uttar Pradesh, and Nepal; revised in 1964.
• Mahakali Treaty (1996): Covers the integrated development of the Mahakali River, including the Sarada Barrage, Tanakpur Barrage, and the proposed Pancheshwar Multipurpose Project (PMP).

Bilateral Mechanisms and Institutional Architecture

Ministerial and Foreign Policy Mechanisms

• Joint Commission Meeting (JCM): Established in 1987, co-chaired by the External Affairs Minister of India and the Foreign Minister of Nepal to oversee all areas of bilateral engagement.
• Foreign Secretary-Level Mechanism: Periodically reviews political, economic, and security developments between the two nations.

Security and Border Management Mechanisms

• Joint Working Group on Border Management (JJWGBM): Oversees cross-border crime prevention, anti-trafficking, and border infrastructure security.
• Boundary Working Group (BWG): Established in 2014 to carry out technical tasks such as repairing border pillars, clearing no-man’s-land, and GPS mapping of the border.
• Gorkha Connection: Over 32,000 Nepali Gorkhas serve in seven Gorkha Regiments of the Indian Army, supported by Defence Wing offices in Kathmandu and Pokhara for pension distribution.

Water Resources and Power Sector Mechanisms

• Joint Committee on Water Resources (JCWR): Three-tier mechanism overseeing flood management, inundation control, and river engineering works.
• Joint Steering Committee (JSC) on Power Cooperation: Coordinates power grid interconnections, cross-border transmission lines, and electricity trading frameworks.

Connectivity and Development Cooperation

Cross-Border Infrastructure

• Petroleum Pipelines: The Motihari-Amlekhgunj pipeline, inaugurated in 2019, is South Asia’s first cross-border petroleum pipeline. An extension between Siliguri and Jhapa is under execution.
• Integrated Check Posts (ICPs): Operational at Birgunj-Raxaul, Biratnagar-Jogbani, and Nepalgunj-Rupaidiha to streamline trade customs and cargo clearance.
• Rail Networks: Operational broad-gauge passenger rail links connect Jaynagar (Bihar) to Kurtha and Bijalpura (Nepal).
• Cross-Border Transmission Lines: The 400 kV Muzaffarpur-Dhalkebar transmission line facilitates large-scale electricity trade between the two countries.

Digital and Financial Connectivity

• UPI-NPI Linkage: Integrates India’s Unified Payments Interface (UPI) with Nepal’s National Payments Interface (NPI) for instant cross-border remittances.
• IN-SPAN: The India-Nepal Startup Partnership Network links tech entrepreneurs with the Indian startup ecosystem through IIT Madras Pravartak.

Key Bilateral Frameworks and Projects

Important Facts for Quick Revision

• Border Length: India and Nepal share a 1,850 km long open border across five Indian states: Uttarakhand, Uttar Pradesh, Bihar, West Bengal, and Sikkim.
• Foundational Document: Treaty of Peace and Friendship signed on July 31, 1950, in Kathmandu.
• Bilateral Military Exercise: Exercise SURYA KIRAN is conducted annually between the Indian Army and the Nepali Army.
• Joint Expert Panel: Eminent Persons Group (EPG) was formed in 2016 with 4 members from each country to review past treaties.
• First Cross-Border Pipeline: Motihari (India) to Amlekhgunj (Nepal) oil pipeline inaugurated in September 2019.
• Rail Connectivity: First broad-gauge passenger rail line links Jaynagar in Bihar to Kurtha in Nepal.
• Water Framework: Three-tier institutional framework managed by the Joint Committee on Water Resources (JCWR).
• Trade Interdependence: India accounts for over 60% of Nepal’s total external trade and more than 80% of its exports.
• Disputed Border Segments: Kalapani-Limpiyadhura-Lipulekh triad in Uttarakhand and Susta in Bihar represent key unresolved border points.
• High-Impact Projects: High Impact Community Development Projects (HICDPs) grant direct financial aid for grassroots infrastructure across Nepal.