The tourist season for Indians begins in the month of June. To beat the summer heat, they visit Nepal, despite the monsoon season, they prefer religious tourism. For tens of thousands of Indians pouring into Nepal for pilgrimage pleasure and extreme sports, the nights are very cool, which they enjoy the most.
Day after day, the Indians go from one mountain to another mountain, from one Hindu temple to another Buddhist pagoda, offering flowers and incense for spiritual gain and well-being of their families and businesses.
While in the capital Kathmandu, picturesque Pokhara, Nagarkot and elsewhere, most of the hotels, restaurants, rental vehicles, taxis and tour operators often refuse to accept Indian currency Rupees (IRs).
They explain that Indian Rupees is no more an official exchangeable currency, which is not well understood. Well, tourist can pay bills to hotels, taxis, and restaurant in US Dollars, Euro, Japanese Yen, British Pound and Chinese Yuan. However, the money changer or money exchange kiosks accept IRs at the rate of 1.5 per cent exchange rate in Nepali Rupees (NRs).
India and Nepal has century old love and hate relationship. Nepal a landlocked country in the Himalayan range is interdependent on India for imports.
Recently, despite the scornful eye of India, Nepal dared to open up and neighboring China made inroads into once a Hindu Kingdom.
In recent times, Nepal has gradually moved from India’s influence towards its arch rival China. The new ‘all weather friend’ has made significant investments in infrastructure in terms of aid and loans.
China’s involvement in Nepal’s infrastructure projects through its controversial Belt and Road Initiative (BRI) poses a threat to Nepal’s role as a buffer state between India and China.
India’s engagement with Nepal is limited to defense cooperation, disaster management, infrastructure development, water resources cooperation, education and cultural exchange, which a Kathmandu based trekking operator Prabesh Banjara said.
However, the challenge with India is with the Peace and Friendship Treaty signed in 1950, which guaranteed Nepali citizens free movement across the border and employment opportunities in India. However, many perceive this treaty as unequal and imposed by India.
The porous and poorly guarded border between India and Nepal is a security threat. It is known that the border allows the underworld mafia to exploit it for smuggling weapons, ammunition, trained members and fake currency, which poses a significant security risk to India.
Nepal also has territorial disputes with India. Kalapani at the India-Nepal boundary remains a disputed territory and unresolved. Nepal claims these territories as part of its own, while India argues that it has inherited them from British colonialists.
The trust between India and Nepal has weakened over time due to India’s slow implementation of projects. Some Nepalese ethnic groups feel that India interferes too much in Nepal’s politics and undermines their political independence, leading to a dislike for India.
The Nepalis love to hate India. It seems that the Nepalese, which cuts across all sections of the people, has not forgotten the nightmarish “economic blockade” by India in March 1989.
After enduring more than a year of extreme hardship, Nepal has learnt a bitter lesson: the rest of the world wouldn’t come to their aid when they were bullied by India. The blockade inadvertently hastened the restoration of democracy, but it did not nuke India-Nepal relations any less rocky. India did not extend landlocked Nepali trade and transit treaties, wrote CK Lal in a prestigious newspaper, the Nepal Times.
Aditya Gowdara Shivamurthy writes in Observer Research Foundation (ORF), a Delhi based think-tank and the neighborhood has undergone shifts since the beginning of the millennium. By the end of the decade, the democratic transition in Bhutan, political instability in Nepal, the Maldives, and Bangladesh, and civil war in Sri Lanka had posed dilemmas and new challenges to India.
Narendra Modi’s government in India offered an opportunity for an emerging China to make inroads in these countries through economic assistance and investments. Most of these projects were later institutionalized and categorized under Beijing’s flagship BRI.
ORF writes that the policy balances coercion and inducement, although the former (India) have become more subtle in the years since the policy was initiated.
While earlier coercion measures included alleged blockades in Nepal and military posturing against the Maldives, the focus has now shifted mainly towards granting and denying access to Indian markets and assistance. There is a growing understanding that the use of coercive measures and becoming involved in neighbors’ domestic politics would only drive the South Asian neighbors away from India and further come closer to China.
India believes that interdependencies will counter Chinese influence in the region, strengthen its security, and further its interests.
ORF study also highlights crucial challenges and missed opportunities in India’s policy. First, India has not been able to counter its negative perceptions, as it is still viewed as an interventionist power.
Second, India’s security-oriented outlook for the region, including offering alternatives to China and pushing back against China through diplomatic means, has continued to foster suspicion towards India’s intentions.
It is clear from his Divyopdesh (Divine Sayings) that Nepal’s great unifier, a Gurka King Prithvi Narayan Shah, didn’t quite trust the big neighbor to the south.
At the level of the nation-state, Nepal has a litany of injustices it has suffered from high-handed Indians, wrote CK Lal.
There is a strong impression in Nepali minds that they have got the short end of the stick in almost every border river project-from Kosi and Gandaki in the past to Pancheshwar in recent times.
All Himalayan rivers originating in Nepal drain into the Ganges. When Indians try to tame some of these rivers, the trouble is transferred upstream, and submergence takes place in Nepali territory, the Laxmanpur Barrage being the most recent example.
A hotelier in Pokhara said, the Chinese invested multimillion dollars in building a new Pokhara International Airport, which has yet to begin operation.
India has threatens that any international airlines which has plans flights to picturesque Pokhara would not be given authorization for over-flights to the airport. “It is pity that India envy’s that the airport was built by her arch enemy China,” said the hotelier.
A private airline in Bangladesh requested Nepal to introduce flights to Kathmandu and Pokhara. Kathmandu’s Triubhuvan International Airport is crowded by scores of international flights and unable to provide a slot for the Bangladeshi airlines.
Pokhara, the second destination, has been blocked by Indian’s arrogant policy. The flight will have to make fly Indian air space to reach Pokhara. Beleaguered Pokhara International Airport is only serving to domestic flights to Nepali private airlines. What a waste of a mega infrastructure investment!
Politicians like to repeat that the love-hate relationship between Nepal and India is “age-old” and has stood the test of time, says CK Lal.
In a piece of advice, he said the Indian government should engage constructively with the new leadership in Nepal and work towards enhancing cooperation in various areas. This will benefit India’s long-term interests.
The Eye of Buddha or “Wisdom Eye” in the heart of Kathmandu represents the enlightened perception of reality and the nature of existence. The eyes are traditionally watching towards the south – India. The eyes protect Nepal from the evil.
First published in the Stratheia Policy Journal, Islamabad, Pakistan, on 24 May 2025
Saleem Samad is an award-winning independent journalist based in Bangladesh. A media rights defender with Reporters Without Borders (@RSF_inter). Recipient of Ashoka Fellowship and Hellman-Hammett Award. He could be reached at saleemsamad@hotmail.com; Twitter (X): @saleemsamad
