Indian Council of World Affairs

Abstract: The recent high-level visit of Nepalese Prime Minister Arzu Rana Deuba to India underscores Nepal’s commitment to fortifying its relations with India, with a particular emphasis on seeking development cooperation and a willingness to expand the scope of collaboration. 

The recent official visit of Dr. Arzu Rana Deuba, Nepal’s Minister for Foreign Affairs, to India from 18th to 22nd August 2024[i], following the coalition shuffle in Nepal, underscores the significant importance of India-Nepal relations. This visit was significant as Nepal has been seeking developmental support from its reliable development partner India and exploring new horizons of cooperation. India has always considered Nepal a valued neighbour and has provided economic and technical assistance to Nepal since the beginning of modern development in Nepal in the early 1950s. The recent high-level visit can be viewed as an endeavour to revitalise India-Nepal relations. 

Firstly, the visit of the Nepalese Minister for Foreign Affairs Dr. Rana to India has been widely covered in the Nepalese media. It was her first foreign visit after assuming office as the Minister in the Nepali Congress (NC) and the Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) led new coalition government that came to power on 15 July 2024. It was reported that the visit of Foreign Minister Rana to New Delhi was accorded significant importance by the Indian authorities, with high-ranking officials and Prime Minister Modi meeting Dr. Rana.[ii] The Nepalese media reported that this level of reception was “unexpected” by the Nepalese delegation[iii], but very welcome. It may be recalled that, earlier in August, during the routine familiarisation visit by India’s new Foreign Secretary to Nepal, India clearly displayed its willingness to cooperate with Nepal’s newly formed coalition government. 

Secondly, it is widely noted that the NC leaders in general keep close ties with India, whereas the CPN-UML leadership is tilted towards China. There was speculation among foreign relations experts and in media reports regarding the possibility of Prime Minister K.P. Oli of the CPN-UML-led government adopting a more distant approach towards India and fostering closer ties with China. This speculation was based on his previous tenures as the Prime Minister of Nepal from 12 October 2015 to 4 August 2016 and 15 February 2018 to 13 July 2021. However, the recent high-level visit indicated that Nepal is keen on strengthening its ties with India and is willing to broaden the horizon of cooperation. Further, PM Oli has affirmed pursuing a balanced foreign policy. Speaking at a book launch event in Kathmandu on August 27, 2024, Oli stated “Geopolitics is about safeguarding our legitimate national interests. We have to clearly communicate our concerns and positions to our neighbours because we don’t play one against the other. We want to be a good neighbour, not a bad one.”[iv] He further stated that “we will not allow our soil to be used against any neighbour. We are very much mindful of the ongoing uncertainties in geopolitics. We are in favour of world peace and sensitive to the well-being of our citizens.”[v] 

Further, Nepal is about to graduate from its Least Developed Country (LDC) status in November 2026, which may lead to the loss of privileges such as access to international grants, concessional loans, reduced trade tariffs and technical assistance.[vi] In this context, Nepal seeks support to sustain its developmental endeavours after graduation to a developing country. India, being the most important development partner of Nepal, is a top-priority country to seek developmental support. Most prominently, the visit of Foreign Minister Rana sought New Delhi’s attention on hydropower trade, investment, and infrastructure, including integrated check posts, road and railway connectivity, and enhanced airways connectivity, requesting further routes and direct flights in different cities in India. 

In addition, Nepal has been experiencing political instability characterised by frequent coalition shifts in the past few years[vii], which has hindered the country’s development efforts and led to growing dissatisfaction among the populace towards the intentions and actions of its political parties. Recent political developments in Bangladesh have sparked concerns that Nepal may also face similar civil unrest amidst its political uncertainty and sluggish economic progress. Consequently, it is crucial for the new coalition government in Nepal to actively seek developmental assistance, complete developmental projects, and ensure economic security and political stability for the people. Against this backdrop, the high-level visit from Nepal and the invitation extended to Indian Prime Minister Modi to visit Nepal carry significant developmental implications. 

At her post-visit media briefing, Dr. Rana held that matters of mutual interest were discussed, including hydropower projects, energy trade, cross-border connectivity and Indian investments in Nepal. Besides, other topics included additional air entry routes for Nepal, floods and inundations, infrastructure in the bordering areas, and sports.[viii] She described the visit as successful and emphasised that both Prime Minister Modi and Foreign Minister Jaishankar had provided assurances regarding India’s ongoing support for Nepal’s development efforts.[ix] 

Although the recent official visit did not result in any signing of agreements, it is anticipated that Prime Minister Modi’s expected visit to Nepal may yield important agreements and commitments that align with the current Nepalese government’s pursuit of political stability, economic growth and development. Further, it is high time to discuss and resolve border disputes between India and Nepal, which have witnessed several unilateral steps from the Nepalese side in the recent past, especially during the last tenure of Prime Minister Oli. Prime Minister Oli recently has asserted having open dialogue with regard to the bilateral issues between the two countries. During a book launch event in Kathmandu on September 7, 2024, he stated that “there exist few problems, not many, between Nepal and India, and they can be resolved, if we maintain warm heart and open dialogue.”[x] He further held that “there should not be a unilateral approach while working on common resources. It should be done based on consensus and bilateral discussion”[xi] 

The recent high-level visit underscores Nepal’s commitment to strengthening its relations with India, with a particular emphasis on seeking development cooperation and a willingness to expand the scope of collaboration. These early signs of the new government in Nepal are welcome; their consolidation however remains to be seen. Prime Minister Modi has accepted the invitation to visit Nepal, conveyed by Dr. Rana on behalf of Nepalese Prime Minister Oli. However, the official date of the visit is yet to be confirmed.

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*Subodh Chandra Bharti, Research Associate, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.

Endnotes

[i] Ministry of External Affairs, Government of India. "Visit of Minister for Foreign Affairs of Nepal, H.E Dr. Arzu Rana Deuba to India." Ministry of External Affairs. August 19, 2024, https://www.mea.gov.in/press-releases.htm?dtl/38180/Visit+of+Minister+for+Foreign+Affairs+of+Nepal+HE+Dr+Arzu+Rana+Deuba+to+India (Accessed August 24, 2024).

[ii] Parshuram Kafle. "दिल्लीमा आरजुलाई प्रधानमन्त्रीहाराहारीकै सम्मान." Naya Patrika. August 20, 2024. https://www.nayapatrikadaily.com/news-details/147882/2024-08-21 (Accessed August 24, 2024)

[iii] Ibid.

[iv] The Kathmandu Post. "Nepal doesn’t play one neighbour against the other: Oli." The Kathmandu Post. August 27, 2024, https://kathmandupost.com/national/2024/08/27/nepal-doesn-t-play-one-neighbour-against-the-other-oli (Accessed August 28, 2024).

[v] Ibid.

[vi] Subodh C. Bharti. 2024. “Implications of the LDC Graduation of Nepal.” Indian Council of World Affairs. August 19, 2024, https://www.icwa.in/show_content.php?lang=1&level=3&ls_id=11681&lid=7109 (Accessed August 25, 2024).

[vii] Subodh C. Bharti. 2024. “Coalition Politics, Political Jolts and Uncertainty in Nepal.” Indian Council of World Affairs. June 27, 2024, https://www.icwa.in/show_content.php?lang=1&level=3&ls_id=11030&lid=7005 (Accessed August 25, 2024).

[viii] The Kathmandu Post. "India’s response to new Nepal coalition positive, says Foreign Minister Rana." The Kathmandu Post. August 24, 2024, https://kathmandupost.com/national/2024/08/24/india-s-response-to-new-nepal-coalition-positive-says-foreign-minister-rana-1724459593 (Accessed August 25, 2024).

[ix] Ibid.

[x] Press Trust of India. “Problems with India can be resolved through open dialogue: Nepal PM Oli.” The Business Standard. September 7, 2024, https://www.business-standard.com/external-affairs-defence-security/news/problems-with-india-can-be-resolved-through-open-dialogue-nepal-pm-oli-124090700533_1.html (Accessed September 09, 2024).

[xi] Ibid.