Nepali Prime Minister Pushpa Kamal Dahal’s presence in Delhi for Narendra Modi’s swearing in alongside other leaders from South Asia, bar Pakistan, was received widely as a nod to India’s neighborhood first policy. The two-day official visit also included a one-on-one meet between the leaders, post which Dahal displayed optimism on his X page about the future of Nepal-India relations with the commencement of Modi’s third historic term.

With somewhat shocking results that greatly deviated from what most of the exit polls projected, Modi has once again assumed his seat of power in Delhi. A coalition government, the National Democratic Alliance (NDA), led by the Bhartiya Janata Party (BJP), along with the Janata Dal (United) and the Telegu Desam Party (TDP) now sits in the center, and many in the initial days have predicted that BJP with a weaker mandate would in many ways be dependent on its allies to maintain its power. With the cabinets being recently announced and BJP retaining its key portfolios, it remains to be seen how the country’s internal dynamics will shift. However, it is unlikely that massive, diverging changes will appear in the context of Delhi’s conduct of its foreign affairs. Delhi may seek to further counter China in the sub-continent at large, even as it looks to resolve its border issues.

At a Glance:

As the Indian External Affairs Minister S. Jaishankar addressed the idea of neighborhood first, he commented on how Bharat First and Vasudhaiva Kutumbakam would be the guiding principles for India’s foreign policy, further noting that neighborhood relations would be the “overriding priority of the Modi government.”

The term first made an appearance in 2014, and has since been an essential part of India’s foreign policy discourse, directed towards increasing and improving trade, connectivity and commerce in the region. However, since its inception, while progress and cooperation has been achieved on many fronts, hiccups have been noted in Nepal-India relations. And it becomes important to highlight the crucial issues before moving on.

The first major setback was witnessed in 2015 with the unofficial blockade, that impacted the state’s economy – an event that was perceived as a turning point for Beijing’s increasing influence and role in Nepal. The second was seen in 2019 when a long-standing border dispute eventually erupted and lined the tensions surrounding the bilateral relations. The territorial considerations, as seen in the map dispute, remain a focal point of disagreement. When asked about the same, Dahal after his return from Delhi had commented in an interview that the matter was stressed upon and there was agreement on making border mechanisms active, while also remarking that Nepal’s own domestic politics would not affect its foreign policy and relations with India.

Though what exactly defines the contours of Nepal’s foreign policy, especially regarding its own immediate neighbours, is a matter that requires closer examination. It becomes important to point out that the Nepali ambassador to India, along with 10 other ambassadors, were recalled just days before the swearing-in ceremony and Dahal’s visit, against the advice of the Minister of Foreign Affairs, as per some reports. Short-term interests and gains shrouding policy agendas have been a common point of discontent both within Nepal’s socio-political landscape and in its inter-state dealings, apparent in the ultranationalist tendencies displayed by some of the leaders. The common referencing of anti-India stances, where issues are raised simply to stroke egos and then dropped at the most convenient moments, does not inspire trust within diplomatic dealings.

On a separate note, the Eminent Persons Group (EPG) report of 2018, that looked into the Nepal-India bilateral framework, reportedly containing recommendations from experts from both sides of the border, has also been a point of conjecture. It was shelved during Dahal’s visit in 2023, where projects for economic development and connectivity were put at the fore, but mentions were made by the Prime Minister that some resolution on the issue could be expected. Another aspect that comes into consideration, and one that has recently occupied headlines is the differences surrounding the Agniveer scheme, passed by the Union Cabinet in 2022. The scheme that impacted recruitment of military personnel from Nepal in the Indian Army, and the security ties between the countries, is now being called for revision. It remains to see if that will materialize, and how future developments could shape up for Nepal.

Besides, neither the border row nor the discontent surrounding the aforementioned issues, prevented the countries from approaching an long-term energy deal that was inked during Jaishankar’s visit to Nepal in January, earlier this year. This came along with other deals, including an agreement on the High Impact Community Development Projects (HICDPs), cooperation on developing renewable energy and a launch service agreement on the MUNAL satellite. The states also moved towards cooperation on digital connectivity, with a cross-border digital payment service that is expected to enhance the nation’s economy, particularly Nepal’s tourism industry.

As such, there is reason to believe that Modi’s third term could bring in some cause for hope, particularly since the country has been one of Nepal’s most important development partners. There is scope in the evolving economic prospects, including physical and digital connectivity infrastructure, public-private sector partnerships and the deep people-to-people ties that have defined the enduring nature of the deep-rooted bilateral relations

Looking forward: Will there be continuity?

Most likely, yes, especially with Jaishankar once again at the helm of the Ministry of External Affairs.

In Nepal, the narrative has been centered on two fronts: one being the influence of regional actors on state politics in India and how it could transpire across the border. On the other, discussions surround the prospects of development cooperation between the states, as underlined by PM Dahal after his meeting with Jaishankar during the Delhi visit.

Political insecurities and development goals, therefore, may continue to be compartmentalized, to some degree. But considering the long-standing issues, diverse channels and spaces for negotiations have to be identified, and approached, with a sense of internal clarity.