Kathmandu: Narendra Modi became the prime minister of India for a third term. Modi’s reelection as the executive of the world’s largest democracy is a subject of discussion in Nepal not only because of the neighborly relations between the two countries but also because in the last ten years of Modi’s rule, Nepal experienced bitter-sweet moments—five times visit to Nepal by Modi, support in relief and rescue efforts during the 2015 earthquakes, electricity export to India, economic blockade, boundary disputes on Kalapani-Lipulekh-Limpiadhura region, and so on. So, what does Modi’s third time victory mean for Nepal? What does it hold for Nepal-India relations? What can we expect from Modi? What may be the course of India’s Nepal policy?
The DMN News approached academics and experts from Nepal and India who closely follow Nepal-India relations. Here are insights from two Indian and two Nepali experts:
Navita Srikant: Let there be India-Nepal private sector collaborations
Narendra Modi-led India-Nepal collaboration during 2014-2024 has seen substantial progress in Nepal with connectivity—physical and digital, harnessing potential of natural resources, hydroelectricity, petroleum pipelines and cultural revival projects. One also saw moving stories of a time-tested neighbor during the 2015 Nepal earthquake and Covid-19 crisis. While the neighborly ethics were being forgotten in the world economies during Covid-19, it was India which did not leave Nepal behind and supplies continued.
However, the deep and emotional ties are equally sensitive to each other. When one doesn’t answer the phone on the third ring, they fail to take cognizance of each other’s concerns and priorities and end up with unilateral decisions which impact people-to-people relations. Be it Nepal’s Constitution and representation of section of society in letter and spirit, the economic embargo which should have been resolved by Delhi and Kathmandu in initial weeks or territorial issues which erupted followed by a protest note, the crux of the matter is Kathmandu and New Delhi must talk more than often and direct line between the leaders must remain uninhibited.
Modi 3.0 for Nepal has to be about the economic boost of Nepal just as India aims for 2047 goals. Nepali business has become disoriented with the government’s red tapism and happy with high return trading activities. Let the Tata and Mahindra entrepreneurial spirit revive in Nepal’s business leaders with India-Nepal private sector collaborations. Modi is known for private sector development and institutional capacities to support it.
The concoction must address education, skills and technological advancements for Nepali youth and productivity driven interventions.
The NDA-led government has two impressive leaders with a track record—Chandra Babu Naidu and Nitish Kumar. Naidu’s vision and guidance to Nepal can turn it around as e-Governance success story and #CyberNepal can become a reality with Nepal as a hub for outsourcing and shared services. Also, Nitish Kumar has a direct bearing on Birgunj- Patna revival with economy, infrastructure and growth. Delhi-Kathmandu is overheated, Birgunj-Patna-Kolkatta need impetus and Nepal-Andhra Pradesh need more exchange of talent.
Navita Srikant is a Financial, Geopolitical and Security Analyst and India-Nepal Relations observer based in New Delhi.
Dr Rishi Gupta: Political stability in relations with Nepal is essential
Despite a coalition government, retaining the Ministry of External Affairs and keeping S Jaishankar as the minister underscores Modi’s intent to continue India’s neighborhood-first policy. Jaishankar’s experienced leadership ensures consistency and expertise in navigating the complex dynamics of regional diplomacy.
By inviting Prime Minister Prachanda to the inauguration of his third term, Modi has underscored Nepal’s significance on political, economic, and strategic fronts. This gesture highlights the importance India places on maintaining strong, stable ties with Nepal, which is crucial for ensuring peace and tranquility at their shared border. It also sends a clear message about India’s intent to counter Chinese influence in the region through proactive engagement with Kathmandu.
Political stability in relations with Nepal is essential not only for border security but also for broader regional stability. Between 2014 and 2024, India’s neighborhood policy had mixed success in Nepal. While Modi’s welcome in August 2014 in Nepal was a rare phenomenon, India’s goodwill further increased with its swift response to the 2015 earthquake in Nepal. However, the border blockade in 2015 saw an all-time low in India-Nepal ties.
Despite some reworking on both sides, the territorial dispute continues to hurt bilateral ties. Meanwhile, India would prefer using diplomatic channels to resolve any disputes, but there must be a willingness in Nepal, too. The use of anti-India maneuvers to raise nationalistic sentiments by the political parties in Nepal comes at a cost, and Nepal needs to understand it.
Strengthening economic cooperation offers significant mutual benefits, as evidenced by the ongoing electricity export from Nepal to India, which helps balance the trade deficit. However, the Left alliance in Nepal must move beyond ideological assertions that serve local political interests at the expense of bilateral relations.
A stable and coherent India policy from Nepal, regardless of the ruling party, would encourage Delhi to facilitate greater private sector investment in Nepal, fostering economic growth and development.
There is a whole gamut of areas where India and Nepal can enhance cooperation, particularly in the digital economy. Investment in digital infrastructure and technology can drive economic growth and modernize both economies.
Amidst India’s ongoing confrontation with China in the Himalayas, Delhi is hopeful that existing treaties and security mechanisms will be strengthened, making them central to bilateral ties. Enhanced security collaboration can help both nations address shared threats and promote regional stability.
For Modi 3.0, enhancing people-to-people cooperation, making economic relations mutually beneficial, and prioritizing Nepal in trilateral cooperation with Bangladesh will be crucial. These efforts will contribute significantly to building trust and strengthening ties between the two countries. Despite progress, Nepal still grapples with a small-state syndrome that often positions it in a victim mode. Addressing these psychological and political challenges will be essential for fostering a more balanced and resilient partnership.
Dr Rishi Gupta is an Assistant Director at Asia Society Policy Institute, New Delhi and Visiting Fellow at the Asian Institute of Diplomacy and International Affairs (AIDIA), Kathmandu.
Shweta Karki: There won’t be much change in Nepal-India bilateral relations
In the ten years that Narendra Modi has been the Prime Minister, the neighborhood first policy has been lined with tensions on several fronts, even as extra-regional powers have played their cards in the sub-continent. As the policy was emphasized once more, India is likely going to focus on countering China’s growing presence in South Asia, apparent in the invites rolled out for the swearing-in ceremony.
Now that the BJP-led coalition has assured Modi a third historic term, many have highlighted that with a weaker mandate, the local actors and bureaucrats will play a greater role in policy-making. With regards to Nepal-India bilateral associations, not much is likely to change. While interests of crucial BJP allies may lead to the revision of certain initiatives like the Agniveer scheme, it is doubtful that anxieties surrounding the Hindutva politics gaining traction in Nepal will materialize. Despite apprehensions regarding border disputes, progress has been noted in the power agreement and connectivity projects.
Even so, the optimism recently displayed by the Nepali PM Dahal regarding the bilateral ties will depend upon the states clearly outlining their priorities on negotiating tables.
Shweta Karki is a faculty at Tribhuvan University’s Department of International Relations and Diplomacy. She is also associated with Asian Institute of Diplomacy and International Affairs (AIDIA) as a Research Associate.
Samar SJB Rana: For Nepal, more actors to deal with in India now
The recent Lok Sabha elections in India have witnessed the BJP-led NDA alliance come to power for a third consecutive term. In the previous elections of 2014 and 2019, BJP single-handedly passed the magic number of 272 with 282 and 303 seats, respectively. However, unlike the last two terms, BJP’s Lok Sabha seats in 2024 have been cut down to 240. This attrition showcases the increased dependence of the BJP on their coalition partners, in particular, Nara Chandrababu Naidu-led Telugu Desam Party (TDP) and Nitish Kumar led Janata Dal-United with 16 and 12 Lok Sabha seats, respectively. This indicates that the Government of Nepal will not only be dealing with the BJP but also with other ruling coalition partners. Due to Nepal’s geography, the state of Bihar (Nitish Kumar is the Chief Minister of Bihar) remains important for Nepal as both Birgunj and Biratnagar are crucial border check posts that border Bihar.
In Nepal, apart from tourism and hydropower, the Information and Technology (IT) sector is slowly emerging as the next economic frontier. In the 1990s, Chandrababu Naidu is known to have created a positive impression on Bill Gates which entailed Microsoft setting up a research and development center in Hyderabad (capital of undivided Andhra Pradesh) in 1998. This helped Hyderabad become an IT hub in India. The government of Nepal should also increase its engagement with Chandrababu Naidu to learn and reap the benefits of the rapidly evolving digital sector.
Samar SJB Rana has a Bachelor of Arts (Honors) degree in Political Science from Hindu College, University of Delhi. He has worked with various think tanks in Kathmandu and New Delhi.
[Related: South Asian leaders in swearing-in ceremony: India’s neighborhood first policy or a formality?]
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