In April 2015, Nepal faced one of the most devastating natural disasters in recent history—a massive earthquake that severely impacted the Himalayan nation’s infrastructure and population. India swiftly responded with what has been described as its largest disaster relief operation abroad, underscoring the special relationship between the two neighbouring countries. Ten years on, the aftermath of that aid, coupled with ongoing development projects, reflects both the promise and complexities of India-Nepal ties.

India’s Humanitarian and Development Assistance Post-Earthquake

Following the earthquake, India pledged $1 billion to assist Nepal in its recovery and reconstruction efforts. This pledge consisted of $250 million in grant assistance targeted at critical sectors such as housing, health, education, and cultural heritage preservation. The remaining $750 million was allocated as a concessional Line of Credit (LoC) to support broader infrastructure development.

India’s approach to aid and development is deeply rooted in the 1950 India-Nepal Treaty of Peace and Friendship, further reinforced by India’s Neighborhood First policy that prioritises Nepal as a key partner. Since 2015, Indian-supported projects have proliferated, with frequent inaugurations of schools, hospitals, drinking water facilities, and sanitation infrastructure.

In 2023, India also marked 20 years of High Impact Community Development Projects (HICDP) in Nepal, which aim to enhance the quality of life through grassroots projects spanning education, health, and clean water. This longstanding cooperation demonstrates the depth of India’s commitment beyond immediate disaster relief toward sustainable development.

Challenges in Bilateral Relations: China’s Growing Influence and Border Disputes

Despite strong development cooperation, the relationship between India and Nepal has faced periodic strains. Nepal’s strategic geography—with a long border with China’s Tibet Autonomous Region—has naturally led to increased Chinese influence, causing concern in New Delhi. Several Nepalese Prime Ministers have sought to balance relations with both India and China, sometimes leading to tension and distrust.

The 2015 blockade of a major transit route between India and Nepal led to a diplomatic chill. While Nepal’s leadership and some local groups described it as an unofficial economic blockade by India, India denied such claims, attributing the disruption to protests within Nepal. This episode revealed the vulnerabilities in the bilateral relationship.

Further friction arose when Nepal released a new political map in 2020 claiming the Kalapani, Lipulekh, and Limpiyadhura territories, areas also claimed by India. New Delhi firmly reiterated its sovereignty over Kalapani, located in Uttarakhand. Additionally, Nepal’s participation in China’s Belt and Road Initiative (BRI) has added complexity, especially given India’s opposition to certain BRI projects on grounds of sovereignty and security.

Sustaining the Partnership: Infrastructure, Energy, and People-to-People Links

Amid these challenges, the India-Nepal development partnership has remained robust and multifaceted. The two countries collaborate extensively in sectors like hydroelectric power generation, road and rail connectivity, and technological cooperation. Joint projects on energy and transport infrastructure aim to deepen economic integration and connectivity.

People-to-people ties and cultural bonds continue to be a cornerstone of the bilateral relationship. Frequent high-level engagements, such as the April 2025 meeting between Prime Ministers Narendra Modi and KP Sharma Oli at the BIMSTEC Summit, reinforce mutual commitments. Both leaders expressed satisfaction with progress in physical and digital connectivity and agreed to deepen cooperation further.

Conclusion

The past decade since the 2015 earthquake highlights both the strengths and vulnerabilities in India-Nepal relations. India’s generous and sustained development assistance has fostered goodwill and tangible improvements in Nepal’s infrastructure and social sectors. However, geopolitical dynamics, including Nepal’s balancing act between India and China, and border disputes, have posed challenges.

Going forward, the durability of the bilateral relationship will depend on continued trust-building, respect for sovereignty, and shared development goals. India’s Neighborhood First policy, combined with Nepal’s emphasis on equidistance, requires nuanced diplomacy and pragmatic cooperation.

The India-Nepal Development Partnership remains a vital bond that not only helps Nepal rebuild and grow but also secures peace and prosperity in the strategically important Himalayan region. The coming years will be critical to ensuring that this partnership strengthens rather than weakens amidst shifting regional dynamics.

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