Context:
Nepal’s general elections saw the Rastriya Swatantra Party (RSP) surge ahead, with Balendra Shah (Balen) set to become Prime Minister. This reflects a political shift after prolonged instability in the country.
1. India–Nepal Relations — Key Issues
• Boundary dispute: Kalapani–Lipulekh–Limpiyadhura dispute continues to strain relations.
• Madhesi issue: Representation concerns and the 2015 blockade perception created diplomatic tensions.
• China factor: Nepal increasingly balances relations between India and China, raising strategic sensitivities.
• Political mistrust: Periodic anti-India sentiment and sovereignty concerns affect bilateral relations.
2. Economic Relations
• India is Nepal’s largest trade partner, accounting for ~64% of Nepal’s trade.
• FY 2023–24 bilateral trade ≈ $7.8 billion, with India exporting the major share.
• Nepal imports fuel, machinery, medicines from India.
• Nepal exports edible oil, tea, jute and agricultural products to India.
• Cooperation is expanding in hydropower, connectivity and transit infrastructure.
3. Nepal in Regional Groupings
SAARC
• Nepal is a founding member (1985).
• Kathmandu hosts the SAARC Secretariat.
• SAARC promotes cooperation in trade, connectivity and development.
BIMSTEC
• Nepal is also a member linking South Asia and Southeast Asia.
• Focus areas include connectivity, energy, security and trade.
• Seen as an active platform amid SAARC’s slowdown.
