- Friday, 10 April 2026
India: Nepal's Key Development Partner
Ram Prasad Dahal
With the conclusion of general elections the debate over the formtion of the new government has heated our politics. The development and prosperity issues which remain the top agenda of any government, will be top priority for the new government too.
As Nepal have experienced problems in its financial and liquidity sector, the issues of development and prosperity have however taken the backseat. In such a grim hour, economic assistance from friendly countries is what the resource strapped Nepal requires at present.
Under such a circumstance, Nepal can engage in partnership with its southern neighbour to expedite its development and prosperity projects.
Nepal can take solace from the fact that the southern neighbour wants to extend its support based on partnership that is non-political, meaning the partnership would be based on the Nepal's needs and priorities.
Indeed, the Indian government is currently advocating non-political development partnership. "Our development partnership will be guided by your priorities.
It will be on terms that will be comfortable for you, that will liberate you from development constraints and build your future. We will rely on African talent and skills." The Indian Prime Minister, Narendra Modi, told the Uganda Parliament during his address in July 2018: " We will build as much local capacity and create as many local opportunities as possible"
PM's Modi's statement is relevant to the Nepali context and other countries. Nepal can take assistance from the India based on the Nepal government's priorities. India's foreign secretary Vinay Mohan Kwatra and other top officials recently said that India would advocate 'non-political' assistance for economic development of Nepal.
India has provided Nepal with lines of credit, grant-in-aid, capacity building and culture heritage restoration and development assistance under its development partnership programme. Such grants prioritise holistic development of neighborhood through capacity building, connectivity, sharing expertise and the people-centric development.
Joint secretary of DPA-III of the Ministry of External Affairs, Satish Siva, informed that the Indian government disbursed 68,073 crores in grants in total. Of this grant, 85 percent (Rs.58,403 crores) was provided to neighboring countries focusing neighborhood in grant projects since 2014.
In Nepal, under connectivity partnership, India provided assistance for Jaynagar-Kurtha Railway, Jogbani-Biratnagar Rail Link and Jaynagar-Bijalpura-Bardibas rail link. The Jayanagar-Kurta Railway construction was almost complete and Jogbani-Biratnagar Rail link, which is 18.6 km.
kilometres in length. Under its Bathana to Nepal, the construction of custom yard with eight kilotmeters has completed under passenger operation.
Nepal custom yard to 16.8 kilometer earthwork and bridges complected and a track construction is under progress.
The section between Jaynagar to Kurtha (34.05 KM) was complete and opened on April 2, 2022 and Kurtha to Bijalpura (17.5 KM) was completed in November 2021. The total length of 68.72 KM Jayanagar-Bijalpura-Bardibas rail link is yet to be handed over to the Nepali government.
Under the Indian development partnership, key projects have been completed. One of them is Emergency Trauma Centre in Kathmandu and other one is Nepal Bharat Maitri Pashupati Dharmashala in Pasupatinath area.
The India has provided support under its Indian Technical and Economic cooperation programme to Nepal as well. Under this programme, popular courses on customs, public finance, archaeology, public health and election management have been offered to Nepali students and officials.
According to Joint secretary Siva, India has also focused on neighborhood first policy during the outbreak of COVID-19 pandemic. After COVID-19 pandemic outbreak, it supplied 94.99 lakhs dose vaccine to the Nepal under vaccine maitri support programme.
The Indian government has also taken initiatives on E-governance under the partnership for the future. The area of cooperation under these initiatives are digital health initative, Indian stack (UPI, Digi locker etc.), UDI program (base for all It enabled schemes) and other schemes.
MEA spokesperson Arindam Bagchi said that the India was focusing on new form of connectivity, egnery as a game-changer project and people-centric partnership to Nepal."We are focusing timely completion of Indian projects in Nepal," he said.
Joint secretary (North) Anurag Srivastava said that Indian government was open for economic cooperation to Nepal as two countries were unparalleled in terms of their age-old ties as well as people to people relationship.
Briefing about the line of credit concessional loans to Nepal, joint secretary (DPA I) Sridharan Madhusudhanan said the Indian government was focusing on new areas and new sectors for development assistance.
He informed that the Nepal received a total of USD 1650 million assistance in four tranches (2007, 2010, 2014, and 2016) and utilised 400 mn (24 per cent). The Nepal government took line of credit for 55 projects and completed 24 till date. Wherease works on 25 projects are going one and six projects are to be started soon.
To forward projects, Nepal-Indian government officials hold meetings on every six months and participate in regular project review meetings.
According to the Indian government, under line of credit, about 600 projects are involved in 66 plus countries. Of them, 333 projects have already been completed.
Indian government officials said the philosophy of development partnership are shaped India's struggle for independence and solidarity with colonised countries, India's civilizational ethos- Vasudhaiva Kutumbakam, Gandhi's Maxim of 'service of humanity', human-centric ideals marked by respect, diversity and sustainable development and partnership.
Invest India
As the India is an emerging economic powerhouse, Nepal can benefit from the southern neighbour which has recently replaced the UK to become the sixth largest economy in the world. According to Invest India, a National Investment Promotion and Facilitation Agency, the Nepal and India have trade and investment relations.
It said the India is the largest source of foreign investment in Nepal as altogether 32 per cent of the total FDI stock of Nepal, worth around USD 520 million (Nepal Rastra Bank data until mid-2020) and about 150 Indian ventures are operating in Nepal.
The India is the largest trade partner of the Nepal. The Invest India said two-third of Nepal's merchandise trade, one-third of trade in services and almost 100 percent of petroleum supplies are conducted with India.
"At present, the areas of collaboration between two nations are power/energy, infrastructure, tourism and education/cultural exchanges," said Invest India COO Priya Rawat.
As the Invest India became vibrant in the Indian economic sector, Nepal can learn and adopt the model.
(Dahal is a TRN journalist)
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