Nepal’s Neighborhood Policy: Blueprint of Mutual Cooperation


Nepal is a sovereign state but still failed to function and implement its policy independently. Due to the dependency toward India, Nepal has confined itself in many ways. Having a great power China in its north and an emerging economic power, India in South, Nepal has failed to exploit this opportunity. There are so many factors which may block the healthy relations between Nepal and its neighbour states. Different ideology, Culture, and the ego between China and India may stop them to cooperate in every sector. But there is one sector which needs to find the meeting point in some stage of time that is the economy. Nepal can assist both nations as a buffer state by providing the shortest trade route and get benefited. But lack of having any specific neighbourhood policy Nepal has failed to engaged its neighbours to cooperate. There is some problem which may have to stop Nepal to established policies.

However, this article has tried to find the disputed part of the relations and suggested the possible model cooperate.


There is a famous quote “Share a joy when we are celebrating and, bear the sorrow when it’s a funeral”, which in the context of Nepal, indicates toward our neighbour. As it has been said, the features of the neighbourhood are that we can rely on them whether they are supportive or against, because they are the ultimate hope that we can expect due to our proximity so that we can always have the challenge to maintain relationships with our neighbours.

Nepal lies between two emerging powers of the world namely India and China. The strategic location of Nepal could have played a vital role in cooperation between these states but has failed to do so far. There are several reasons behind this trustless relation between these three states. Firstly, the two different pole ideologies carry by China, Communism, and India, Democracy, has stopped them to establish a level of trust among them. Secondly, treating Nepal as their ego game is not generating any fruitful output from the relation. All we have now is bitterness. Cultural, historical and civil level relations between Nepal-India give enough space to India to consider Nepal as their territorial state. In addition to that language, open border, and dependency, in term of working destination, is other factors which not only binds these nations but also creates harmony at the same time. However, some harsh move made by India has created a hateful scenario between these states. India has always felt that Nepal can be a security threat to them.

Nepal can get the benefit of its neighbours and exploit their emerging economy by engaging them in Nepal’s development. But, Nepal has failed to create an opportunity so far. Due to not having any specific neighbourhood policy, Nepal sometimes gets confused on how to tackle the move made by its neighbours. One way dependency toward India always has excluded China from Nepal’s development. Instead of creating a harmonize relations between these three states Nepal use China and India card to scared each other. This only can bring short-term benefit. So to get a long-term benefit and to establish a harmonize relations Nepal have to draw its clear neighbourhood policy and a scenario of tri-lateral cooperation.

read Bangladesh China Relations

Nepal-India Relations

Starting from the historical era, Nepal and India relations is not only bound by a neighbourhood but also from its root of Hinduism and Sanskrit, root both state’s language. Almost all the South Asian state is considered as the Indian Sub-continent so Nepal is one those nations. There were no any formal relations and treaties between Nepal and Indian until a treaty with British led East India Company. Historically there was a security alliance between all south Asian Nations to fight Alexandra that we can consider as the oldest practice of Regionalism, but we cannot find any signed treaties of that period. This alliance used to be called Jambudvipa. Basically, this largest island lies under India and Indian Subcontinent, which are very significant things to be worship in terms of Hinduism and Buddhism.[1] Otherwise, this could be the formal and one of the oldest signed treaties between any existing states of that era.

Nepal-India friendships treaty of 1950 between Royal Government of Nepal and Government of India is still under implementation after almost seven decades of its signature. Sometimes only this treaty has taken this relation to the worst stage. The Nepal-India Peace and Friendship Treaty which was signed on July 31, 1950 agreed to grant, on a reciprocal basis, to the nationals of one country in the territory of the other the same privileges on matters of residence, ownership of property, participation in trade and commerce, movement and other privileges of a similar nature? It became a major turning point in the movement of Indians into Nepal and was further reinforced by the Nepal India open border.[2] This treaty isolates Nepal from all other countries including its immediate neighbour, China. India somehow managed to create an absolute dependency of Nepal to them in term of fuel, and commodities, so they already have imposed two blockades to Nepal, which has turned daily life in difficult life.

India’s high interest in Nepalese internal politics has turned themselves into a bad neighbour. It’s an international practice where a powerful nation tries to impose or intervene in their neighbour’s affairs. To some extent that is all about protecting their role and right as a neighbour but the level of mistrust and hatred to India in Nepalese sentiments is growing rapidly. In another hand China from the north has always extended the helping hand when India tries to play a card of the blockade. India’s imposing feature of their neighbourhood policy gained nothing but provide enough room to China to enter South Asian states, which used to consider as the best alliances of India excluding Pakistan.

Nepal-China Relations

Historically, Nepal-China relations can be coined as a “Need Basis Relationship”, where one remembers other when they are in extreme need. In another word, China looks like an infrastructure partner of Nepal rather than a mutual cooperator in every sector. But in these previous years, the relation between Nepal and China not only spread from Need basis to Close Call Partnership in-fact it is emerging from infrastructure partner toward a mutual partner. “The two countries engraved the glorious traditional relations on an agreement of 1955 that led to establishing diplomatic relations between them. The new age thus began in our common history. It is well known that Nepal and China have very long and constantly sustained relationships. These have been marked by friendliness, mutual support, understanding and appreciation of each other’s aspirations and sensitivities.”[3] These lines are copied from the website of the embassy of Nepal in China which says that Nepal-China relations are much healthier than it’s been proclaimed by other regimes around the world. But as a hegemonic power of the region, India time and again questions the flexing relations between Nepal and China.

Historically, Nepal-China never has relations of cooperation or of hate. There are several interests of China regarding Nepal, until and unless Nepal respects those interest China always want to flex her hand to help Nepal to gain a prosperity. Previously, there was only one interest of China regarding Nepal that is respecting the “One China Policy”. Nepal’s proximity to Tibet and the presence of more than 15,000, registered, Tibetan refugees always have kept China alert in term of the possible threat of spreading Free Tibet movement in the capital of Nepal. But till date, Nepal has assured that there is no such visible movement. During Tibetan Buddhist holidays Nepalese soldiers walk through Tibetan refugee camps to monitor and ensure there are no protests or ‘uprisings against China’. Tibetan refugees are prohibited to partake in any kind of peaceful protests, which is upsetting for the many refugees who want to raise awareness of the injustice in their homeland.[4]

The relations between Nepal and China grow strongly in term of cooperation in Trade, monitory aid, infrastructure development and trade route, after when India imposed an unofficial blockade to Nepal by showing their dissatisfaction toward the newly promulgated constitution. Nepal’s one-way dependency toward India in fuel, commodities, and goods of daily life, turn this blockade into a devastated torture. Nepalese highly suffered to conduct their daily activities from cooking to reaching to the office. So this scenario creates a huge level of hate and dissatisfaction toward Modi led Indian regime. India unknowingly pushed Nepal toward China. Leading news magazine of India times of India give a note on upcoming joint military exercise between Nepal-China by saying that, India can’t afford to get upset and start putting pressure on Nepal to ease off on its relationship with China. It also has suggested that India should avoid an interventionist approach it they expect a healthy relation between New Delhi and Kathmandu.[5]

From Nepal’s point of view breaking a one-way dependency from India and share it equally with its immediate neighbours is a very crucial and important decision to make. If the ongoing projects initiated by China in Nepal get success, then the connectivity of these two nations will no longer be distracted by its wide Himalayan range. Railways, roads, trade, security alliances, and infrastructure development are some ongoing projects initiated by China in Nepal. The Recent decision of Nepal Oil Corporation to import Euro 4 petroleum from China will decrease Indian dependency of Nepal in a higher margin. India’s big brotherhood attitude toward Nepal has given a golden opportunity to Nepal to extend the hand of cooperation to China. This will not only be ice break of the dependency but also will be a golden opportunity to establish tri-lateral cooperation between China, India and Nepal.



Nepal-Third neighbour Relations

Established a third neighbour relation is always the hardest task for a buffer state like Nepal. Additionally, it is much harder for Nepal to establish relations with any other nations besides China and India. Trapped between two different ideology and administrative system Nepal not only suffers the clash of influence but also suffer a clash of ideology, economy and ego. But still, as a part of the global world, Nepal somehow managed to have healthy relations with some third world besides its neighbour. For instance, Nepal-US relation, Nepal-EU relation, Nepal-Japan relations and bilateral relations with European nations are productive in term of infrastructural and social development. However, there is no any direct input in policy and economic development of third nations in Nepal. So that, these kinds of relations can be termed as a donor-receiver relation.

To upgrade these relations to mutual cooperation Nepal need to rethink its policy which may redefine it. For instance, Mongolia also represents itself as a buffer state but it has managed and established a very good relations with third nation beside Russia and China. The leading magazine “The Diplomat” writes, “While Mongolia is located in the northeast region of East Asia, its “third neighbor” foreign policy is poised to allow Ulaanbaatar to boost bilateral and multilateral diplomatic relations with countries around the world. Land-locked between two politically, economically, and militarily powerful nations — Russia and China — Mongolia’s third neighbor policy by no means will exclude these neighbors. Instead, the strategic policy framework intends to use a soft-power approach to international relations as a modus operandi to tackle developing vital sectors such as education, science and technology, mining, and energy infrastructure.[6]

But Nepal at the same has failed to move forward from China and India due to lack of having any specific policies on formulating its relations. Without hurting its immediate neighbors Nepal can establish its third neighbor policy. However before move forward to third world its better if Nepal come up with a blue print of its neighborhood policy.


Nepal’s foreign and Neighborhood Policy

Panchseel: watch and wait policy

During cold war, world was divided in two parts where Soviet Union carried the communist ideology and USA and its allies carried the capitalist ideology. Those states that straightly agree or deny one of these philosophies were considered as an ally of whether USA or Soviet Union but those states who want to remain neutral established a movement named NAM-Non Align Movement. India, Nepal and most of the Asian states were in this movement, so to verify their neutrality they modify the objectives of NAM and established that modified ideology as their foreign policy. Including India, Nepal and some other states start to practice Panchaseel as their foreign policy. Time changed, cold war was over and most importantly those states that used to have Panchaseel as their foreign policy updated them as time and strategy demanded but Nepal remained dependent on Panchaseel which now considered quite old policy to counter our emerging neighbors.

Constitution of Nepal 2072 again determined that, “Respecting the principle of NAM, Panchasheel, UN international convention, value of world peace[7]”, as foreign policy. Although it sounds ideal, but, those word and values used on Nepalese constitution is more or less borrowed from other international organizations. Similarly, at last our constitution says to practice our independent foreign policy with borrowed values, those values which teach us to be passive. So that establishing independent foreign policy is needed, and along with foreign policy establishing neighborhood policy is crucial.


Tri-lateral Cooperation

Landlocked countries like Nepal face the problem of not having access to trade route beside its neighbor. Flexing muscles toward global trade community is only way to gain economic prosperity these days. Similarly, being a neighbor state of two fast growing economy of the world is a highly beneficial for Nepal. China and India are on global competition to gain a position of the super economic power of the world but we are still struggling on our own internal clashes.

Having the ideological, economical, cultural clashes China and India cannot remain silent in term of expanding its trade relations due to some factors. Size of their land, population and biggest market to sell their production cannot hold them for longer period of time with doing trade to each other. Geographical condition between these nations is not favorable to expand their trade where they have to pass through high hills and it is like an impossible route to use during winter and sea route is turned out to be a expensive route then trading through air fright.

Being a neighbor and the possibilities to provide a shortest route to these two giant economic power, Nepal can get benefit just by facilitate the trade between these two. Instead of wait and claim its share with neighbor, Nepal can start thinking of cooperating equally with its neighbor. Tri-lateral economic relations between these nations can also mitigate other small issues like, culture and ideology.


read Look East Policy of Bangladesh



Establishment of a Neighborhood policy

Like Nepal, Mongolia is also equally important in world politics, strategically. It lies between two great powers, China from one side and Russia from other. Being a buffer state Mongolia tactically balances her immediate neighbors. Currently, the flow and the index of Mongolian development are incomparable with Nepals’. India is the biggest democracy in the world and China at the same time is the biggest communist state. In addition to that they both are in a race for better economic growth, nuclear and arms race to beat each other. Critical relation between these nations makes the trilateral relations more complex and the geo strategic location of Nepal led her to take initiation in this procedure.

Respecting the National Interest

National interest cannot be compared with other forms of interest where ego, history, culture or civil-military relation play a vital role rather than economy and diplomacy. Regarding Nepal, both of its neighbors want us to respect their national interest whether to respect ‘One China Policy’ or to respect India’s ‘Big Brotherhood’. Nepal as a good friend can take both of their interest with no harm at the same time. Strategic and Diplomatic efforts need to be stronger and tactical to handle these issues at once. The day we start to proclaim ourselves as China centric or India Centric, our neighbors might choose to move on without taking us on board.

Position India and China Equally

Instability has become almost a metaphor to Nepalese politics. When regime is changing, concerns about Nepal by international players including our neighbors rise rapidly. Unpredictable policy endorsement initiated by Nepalese government always gives a feeling of insecurity among all those active or concerned nations towards Nepal. China and India equally put their fullest effort to establish a favorable government in Nepal because of insecurities regarding policies agreed with one government not being endorsed by future governments.    Despite that, if Nepal prepares a blue print of policies to work with neighbors or with international partners, then it could sustain a system which guarantees stability and allays concerns of being considered a turncoat. In that case even after a change of guard in the government, the policies would by and large remain the same eliminating the confusion in the perception of external partners.

Review previous treaties and give fresh start to relations

Nepal- India friendship treaty 1950 sounds convivial but has some clauses that bind Nepal to an extent which makes it handicapped with regard to establishing new trade relations with other nations except India. Treaty of 1950 is still perceived by Nepalese public and politicians as a tactic employed by the big brother to retain control over Nepal. Therefore, the very first step towards mutual cooperation would be to review this treaty which at least would help to fade the bitterness toward India that is growing in Nepalese political discourse. Nepalese constitution 2072 lays stress on a provision regarding previously signed treaties that is, “Review those treaties, and give room to mutual cooperation and equality”.



Mr Saroj Kumar Aryal

Vice President

Citizens Foundation

M.A, International Relations from University of Warsaw



[1] Island, J. (2017). Jambudweep – The Global Island. Retrieved 25 February 2017, from

[2] Nepal-India Open Border: Prospects, Problems and Challenges. (2017). Retrieved 25 February 2017, from

[3] Dimensions of Current Relations | Embassy of Nepal in Beijing. (2017). Retrieved 5 March 2017, from

[4] Internationalist, N. (2017). China’s influence in Nepal endangers Tibetan refugees. New Internationalist. Retrieved 21 March 2017, from

[5] Ghosh, R. (2017). Nepal-China Military Exercise: India must not fret but push for an India-Nepal-China trilateral. Times of India Blog. Retrieved 21 March 2017, from

[6] Bolor Lkhaajav, T. (2017). Mongolia’s Third Neighbor Policy Blooms. The Diplomat. Retrieved 21 March 2017, from

[7] Constitution of Nepal. (2016) (1st ed., p. 41). Kathmandu. Retrieved from

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