Daily Editorial Analysis for 17th June 2020

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Nepal ties and the Benaras to Bengaluru spectrum

Paper: II

Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.


India needs a new prism to view its relationship with its Himalayan neighbor, keeping in mind the past and the future.


Benaras was a keystone of India-Nepal ties for centuries. B.P. Koirala, the doyen of democratic politics in Nepal, was a resident of the city; so too was Pushpalal Shrestha, one of the founders of the Communist Party of Nepal. Many in bureaucracy and politics had studied at Banaras Hindu University, Varanasi, and Nepal’s intellectual software was largely coded there. Till the 1980s, an easy and affordable way to reach Kathmandu was to fly from Benaras.

Then the flights stopped as takers became insufficient. Today, one of the most profitable sectors for Nepal Airlines is Kathmandu-Bengaluru. Here, a burgeoning colony of Nepali programmers work for storied Indian tech companies, creating software for the world. The changed equation symbolises both a changing India and a changing Nepal.

A changing Nepal: background

  • The obvious change in Nepal is that it is now a democratic republic after nearly 250 years of being a monarchy. The Nepali Congress and Maoist leader, Prachanda, claim democracy (1990) and the abolition of monarchy (2008) as their legacies.
  • More pervasive is the societal change from Nepal’s exposure to globalisation. Geography, too, stands to change, with the Chinese now having the potential to bore through the Himalayas and exhibiting their presence in Kathmandu in economics and politics.
  • The constant in Nepal is a nationalism which is really a mask for anti-India sentiment. Politicians use it for personal gain, and it is deeply ingrained in the bureaucracy, academia and the media.
  • Today, Prime Minister K.P. Sharma Oli is cementing his legacy as a nationalist by extending Nepal’s map into Indian territory. The cartographic aggression and the embedding of the new map in the country’s national emblem and Constitution are untenable and should have been avoided under all circumstances.
  • But this is not the first time Nepal has thumbed its nose at India, even at the cost of its people’s well-being. In 2015, the Nepali Congress government adopted the new Constitution, ignoring India’s concerns.
  • This instinct to cut off the nose to spite the face is visible in the lack of progress on the game-changing 5,000 MW Pancheshwar hydroelectric project. Nepal’s viable hydro-electricity potential is 40,000 MW; the country generates only 1,000 MW and must import 600 MW from India.
  • Identity politics with India is also visible within the country where Nepali citizens from the Terai (Madhesis) feel discriminated as being “Indian”.
  • To Nepal, their attitudes reflect the angst of a small state. To India, Nepal appears incorrigible.

Shift with globalisation

  • After democracy was restored in 1990, passports were more liberally issued, and Nepalis began looking for work opportunities globally, beyond just India.
  • West Asia and South-East Asia specifically became major destinations for labour migration.
  • Security uncertainties with the Maoist insurgency at home also propelled the trend of migration. Students and skilled personnel began moving to Europe, the United States, Australia, Thailand and even to Japan and South Korea.
  • As of 2019, nearly a fifth of Nepal’s population, from all parts of the country, were reportedly overseas. At an estimated $8 billion, global remittances account for nearly 30% of Nepal’s nominal GDP, making it one of the most remittance-dependent countries in the world.
  • Leftist ideology and the prominent presence of international non-governmental organisations — ostensibly there to resolve conflict and alleviate poverty — have added to Nepal’s exposure to the world.
  • Underreported is the presence of Christian missionaries who entered Nepal during and in the aftermath of the Maoist insurgency. “Faith Houses”, as churches are euphemistically called in Nepal, can be found in villages and towns across the country, including the Terai, and represent not only European and American organisations but Korean too.
  • Moreover, posters advertising education opportunities in Australia, the United States, Canada and South-East Asia adorn Nepal.
  • Nepal’s 2011 Census shows that over 80% of its 28 million-strong population were Hindus, and since 1962, it had formally been a Hindu kingdom. The new Constitution in 2015 makes Nepal a secular country.
  • The proliferation of communication technology has also spread a certain cosmopolitanism but without the accompanying metropolitanism.

A link despite diversification

  • Kathmandu has continued its long-standing efforts to spread Nepal’s options beyond India.
  • Multilateral development banks are by far the biggest lenders and players in the country’s development efforts. And in fact, one of Nepal’s largest aid donors is the European Union.
  • India and China are not the only players for big projects either.
  • A long-delayed project to pipe water into Kathmandu was with an Italian company, major investments in the telecom sector are coming from Malaysia, and the largest international carrier in Nepal is Qatar Airways.
  • The outward movement of students, along with the growth of institutions of higher learning at home, has meant that most young people in Nepal, including emerging contemporary leaders in politics, business or academics, have not studied in India.
  • This lack of common collegiate roots removes a natural bond of previous generations that had provided for better understanding and even empathy.
  • But despite Nepal’s efforts to diversify its options globally, its linkages with India remain robust. Nepal’s trade with India has grown in absolute terms and continues to account for more than two-thirds of Nepal’s external trade of around $12 billion annually.
  • This clearly reflects the advantages of geography, both physical and societal.
  • India continues to be the largest aggregate investor in Nepal.
  • The massive under-construction Arun-III 900 MW hydro-electric project is slated to singly produce as much power, when completed in five years, as Nepal produces today.
  • Moreover, the peg with the Indian Rupee provides unique stability to the Nepali Rupee.
  • Nepal’s per-capita income is just above $1,000. While the huge remittance economy has brought a semblance of well-being, the country has a long way to go in reaching prosperity.

Focus areas

  • India for its part should also focus on developing its border areas with Nepal, with better roads and amenities of interest (such as shopping malls) to the burgeoning Nepali middle class.
  • This would have economic plusses for both sides and keep ties strong at the people’s level. It would also be an image makeover.
  • Given the cultural and ethnic commonalities, it befuddles and draws anger in India when things go wrong in ties with Nepal.
  • Those responsible for bringing things to such an impasse must be held to account, but it is important that we update the prism through which we view our relationship with our Himalayan neighbour.
  • We must not forget the past nor turn away from it but, instead, must be mindful of the realities of a changing India and a changing Nepal.
  • Benaras will always be a keystone, but contemporary reality makes it imperative to look at Bengaluru.


The relationship with India, with open borders and Nepalis being allowed to live and work freely, provides Nepal a unique advantage and an economic cushion. The latter is particularly important today with COVID-19-caused global contraction positioned to pop the remittance bubble. Neither the Chinese nor any others are likely to write blank cheques.

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