Indian policy towards Nepal is determined by the following considerations:
(i) the geopolitics of Nepal makes it a landlocked country sandwiched between India and China. Access to Nepal is easier from the Indian side;
(ii) historically, both countries have shared a common security perception;
(iii) there exists a great deal of cultural affinity between the two countries;
Nepal is not only the birth place of Gautam Buddha but is also the only Hindu kingdom in the world.The parameters of bilateral relations came to be defined in the context of two treaties that India and Nepal signed in 1950: The Treaty of Peace and Friendship and the Treaty of Trade and Commerce.
The former was a security arrangement that took into account the possible threat of the Chinese from across the border. It provided for a close cooperation between India and Nepal on matters relating to Nepal’s security, thus ensuring that Nepal does not come under the Chinese sphere of influence. The second treaty provided for trade and transit arrangements with Nepal.
The terminology of this treaty was subject to several discussions over the years. Since this was a ten year treaty that was to be renewed regularly, the discussions became important. One major change came in the phraseology of the treaty in 1971. The term ‘freedom of transit’ was replaced by ‘right of transit’. Another important change that took place during the Janata Government was the splitting up of this treaty into separate treaties, one for trade and dealing with transit.
In 1970s Nepal came forward with a fundamentally new approach to its foreign policy. In aformal announcement in 1975 Nepal proposed the establishment of a Zone of Peace for the region of Nepal. The proposal sought to adhere to the policy of peace, non- alignment and peaceful coexistence. The central purpose of this policy appeared to be the reassertion of Nepal’s sovereignty and its identity that it feared was being submerged by Indian domination.
While this proposal still stands as an objective of Nepal’s foreign policy today, India did not accept it. Instead, India favours the entire South Asia as zone of peace. The movement towards restoration of democracy in Nepal began in 1980s. The creation of the new constitution providing for a constitutional monarchy in 1990 was a welcome step in the restoration of democracy. Since 1990 Nepal, like the UK, is a constitutional monarchy with a parliamentary democracy.
The Indian attitude towards Nepal is linked to several factors. One concerns Nepal’s attitude towards China. Nepal has awarded building contracts to Chinese companies close to the borders. Nepal also purchased some armaments from the Chinese. In fact what was of critical concern to India was the reported agreement between China and Nepal for sharing of intelligence.
India is also concerned about the open access that Pakistani militant organisations are suspect of getting in Nepal. The highjacking of an Indian Airlines plane from Nepal is just one example of the I.S.I. using Nepal’s territory for terrorism against India. On the part of Nepal, it views India as a dominant neighbour that it would like to balance by making some overtures with China. Nepal has broadly accepted the ‘special relationship’ with India. The strong historical and socio-cultural links ensure that this relationship will continue. However, Nepal is looking for greater economic flexibility from India in its economic/trade related issues.