Submit your Article

As South Asia experiences a multifaceted regional rebalancing, the Indo-Nepal bilateral relationship keeps developing on the twin principles of economic interdependence, physical connectivity infrastructure, and strategic diplomacy. Trade and energy to border management and transit routes, the latest developments in 2025 represent a renewed vigour of engagement between the two neighbours—united not only geographically, but through history and people-to-people ties.

A deep trade partnership 

India continues to be Nepal's biggest trade partner by a wide margin, with more than 64% of Nepal's foreign trade volume. Based on the data of the Embassy of Nepal in New Delhi, bilateral trade reached Rs 1.13 trillion during FY 2022–23. Nepal exported products worth Rs 106.69 billion and imported more than Rs 1.02 trillion from India.

Nepal's major exports to India are refined palm oil, soybean oil, cardamom, carpets, iron and steel, and polyester yarn. Such commodities—some of which are manufactured under inward processing arrangements—have duty-free entry into Indian markets under currently prevailing bilateral agreements, subject to meeting prescribed value-addition norms.

On the import front, Nepal is heavily reliant on Indian petroleum products, vehicles, machinery, medicines, and food grains. The trade deficit is appalling, but Nepal is making efforts to diversify its export basket, with more focus on electricity exports, herbal products, and processed agro-forestry products.

Infrastructure and connectivity as catalysts

Trade facilitation has also been boosted immensely by cross-border infrastructure. Two Integrated Check Posts—ICP Raxaul from the Indian side and ICP Birgunj in Nepal—collectively process more than 50% of total bilateral trade volume, as reported by Nepal's Customs Department.

Additionally, strategic road and rail connectivity continues to be expanded:

Jaynagar–Kurtha railway is in operation, with additional extension to Bardibas underway.

Raxaul–Kathmandu and Jogbani–Biratnagar railway projects are in advanced planning stages.

The Gorakhpur Link Expressway, which opened in June 2025, brings travel time from Lucknow to the Nepal border down to 3.5 hours, benefiting border trade and tourism straightaway.

A historic connectivity project—the Motihari–Amlekhganj petroleum pipeline—has already changed the petroleum product supply chain. In operation since 2019, it exports more than 2 million tons of fuel every year and minimizes transport costs and losses substantially.

Energy: From impirt dependence to regional exporter

One of the most notable developments this year is the coming out of Nepal as a power exporter. Nepal, in June 2025, started exporting 40 MW of power to Bangladesh via India's transmission network—South Asia's first tri-national energy transit project.

This comes after India's endorsement of Nepal's export of more than 450 MW of power, mainly from hydropower projects, to Indian states like Bihar. A 2024 long-term energy deal obliges India to buy a maximum of 10,000 MW of power from Nepal within a decade—an ambitious but possible target considering Nepal's unreleased hydropower potential.

In February 2025, Indian Oil Corporation inked an agreement to export liquefied natural gas (LNG) to Nepal, a first in cross-border energy collaboration. The initial quantum will be small—240 tons a year—but the strategic value is significant.

Diplomacy and strategic engagement 

Diplomatic interaction between the two countries has picked up in recent months. India's Foreign Secretary Vikram Misri travelled to Kathmandu in August 2025 for top-level discussions with Prime Minister KP Sharma Oli, setting the stage for a state visit to India in September.

In parallel, home secretary-level talks during July concentrated on border safety, preventing trans-border crime, and coordinating responses to disaster—all high-priority areas for two nations with a penetrable and open 1,770 km shared border.

India has continued to prioritize its "Neighbourhood First" strategy, and Nepal has, in turn, reaffirmed greater cooperation across domains.

Historical foundations contemporary relevance 

India–Nepal relations are supported by official treaties—the 1950 Treaty of Peace and Friendship, the Treaty of Trade, and the Treaty of Transit. These have ensured institutional continuity, but both sides realized that they need to update their framework to accommodate changing economic and geopolitical compulsions.

There are occasional political tensions, but the structural foundations are stable. The economic path is one of the increased integration, particularly in the energy and infrastructure sectors. Cultural ties, religious bonds, and the open border access continue to underpin rich people-to-people relationships, especially in border communities.

Conclusion

As the globe leans towards regionalism and economic blocs, India and Nepal are heading towards a more pragmatic and fruitful era of bilateral engagement. Diversification of trade, energy dependence, and high-level diplomacy indicate that 2025 could be a watershed year—one that converts geographic proximity into strategic partnership.

Whether or not potential is actualized will rest on sustained mutual respect, open coordination, and shared vision towards sustainable development.

Jagathkrishna Yadav, journalism student, Dr B.R Ambedkar Open University, Hyderabad

Each planting season in Nepal brings not hope, but anxiety. It is not the weather, pests, or natural disasters that worry our farmers the most, but something entirely preventable: the shortage of chemical fertilizers. In a country where over two-thirds of the population relies on agriculture, and where farming contributes around 25 percent to the national GDP, this recurring crisis is not only unacceptable, it’s a warning sign. An empty fertilizer bag is no longer just a supply issue; it is a glaring symbol of institutional failure, poor planning, and a deeply broken supply chain that begins with global procurement and ends in rural despair.

This is not a seasonal accident. It is a systemic breakdown of policy, logistics, and governance that affects every stage of the fertilizer journey. From late international procurement to poor internal distribution, from political indecision in Kathmandu to black market networks in the Tarai, the entire chain is inefficient and unresponsive. The result: Nepal’s farmers are left helpless, food production suffers, and the country spends billions importing what we could grow ourselves if only we had the right inputs at the right time.

The most visible symptom of this failure is the infiltration of low-quality, smuggled fertilizers from India. In districts like Bara, Rautahat, and Sarlahi, these products dominate local markets during peak demand seasons. This parallel market thrives because the state fails to deliver. It is a market born not out of competition, but out of desperation. Farmers, left with no option, purchase fertilizers that have neither been tested nor approved, risking soil degradation, poor yields, and long-term harm to their land. These products often carry Nepali-language packaging to appear legitimate, but lack quality assurance, correct NPK ratios, or even basic labeling.

The official supply chain, at the heart of this crisis, is dysfunctional both in design and implementation. We have two state-owned entities handling import of fertilizer into Nepal: (1) Agriculture Inputs Company Limited (AICL), and (2) Salt Trading Corporation(STC). Between them, they are a leading importer of some 600,000 metric tonnes of chemical fertilizers (mainly urea, DAP and MOP) each year. The government supplies fertilizers to farmers through cooperatives at subsidized rates.

However, the theoretical framework rarely plays out in practice. Every year, tenders are issued too late, sometimes just weeks before the planting season begins. The process of floating tenders, finalizing contracts, opening letters of credit, and securing port clearance is slow, bureaucratic, and riddled with delays. By the time the fertilizers arrive in Nepal typically via the Kolkata port the planting season is either halfway through or already over. This lag forces farmers to either wait, reduce their cultivation area, or turn to the black market.

The international dimension adds another layer of vulnerability. Nepal heavily depends on imports from India and, to a lesser extent, China. While India remains the primary source due to cost and proximity, its export policies are unpredictable. When India restricts fertilizer exports to protect its domestic needs as it did in 2022 Nepal is left with few immediate alternatives. Unlike countries with multiple trading partners and buffer stock systems, Nepal lacks both diversification and contingency plans. It does not maintain strategic fertilizer reserves, which means even a small disruption in supply becomes a national crisis.

Transport and logistics further complicate the situation. Nepal, being landlocked, faces high freight costs and long transit times. The journey from Indian ports to border customs is often delayed due to procedural bottlenecks, truck shortages, or political strikes. Once inside Nepal, the distribution chain faces another hurdle: weak road infrastructure and lack of storage capacity, especially in remote and hilly districts. Often, even when fertilizers are available in Kathmandu or Birgunj, they fail to reach places like Rolpa or Bajhang in time.

This systemic failure has real, measurable consequences. According to recent trade data, Nepal’s annual agricultural import bill has surpassed Rs 360 billion, a figure that includes rice, vegetables, lentils, and wheat, all of which could be grown domestically if farmers were supported with timely inputs. In effect, we are importing food because we failed to manage the supply chain for the materials needed to grow it. It is a cruel irony, and an expensive one.

But this crisis is hollowing out trust well beyond the realm of economics. The farmers, destitute at the best of times, feel deserted by this over-promising state which is now busy with lies to rerun an election. As hope grows old and promises are not fulfilled, the inputs are not given. The disillusionment goes far deeper than farming; it spawns a lack of faith in governance, politics, and the prospects for their children to make a living in agriculture. This leads to large-scale youth ejection from farming either to migration or unemployment in the long run.

Fixing this broken system demands a fundamental and long-term change in policy. Fertilizer centralized procurement should be streamlined and an efficient/ predictable fertilizer distribution network established. Tenders should be given a larger window of time, six to eight months prior to the planting season, along with an associated timeline and accountability. Policy Frameworks should contain those Windows as an emergency measure so that State/Deptt. can make quick purchases in case of missing out on the stock/time. And, just as importantly, Nepal must reduce its vulnerability stemming from a single source country by creating relationships with other suppliers in the Middle East and Southeast Asia.

Infrastructure investment is also critical. Provinces and districts will have to improve their storage capacity. Both supply and demand could be tracked in real-time using the introduction of digital inventory systems. It is also focused on the road access to rural markets that must be addressed for not only fertilizers, but for broad economic development. The last mile of the delivery spectrum is maintained through cooperative networks which should also be trained and invited to become capable technically to get tech developed and inaugural incentives.

One without the other simply won't cut it. It is not just a case of isolated smuggling of fertilizers; it appears to be an organized trade involving loss of hundreds of crores and operates without any fear. What the government can immediately do is to wake up and now indulge in strengthening border monitoring, step up on-ground inspection of retailers, begin a public awareness drive or warn farmers of the dangers of using unverified fertilizers. Punishments pertaining to the smuggling and selling of substandard fertilizers should be enhanced, enforced.

In the long term, Nepal must begin shifting toward more sustainable and locally sourced alternatives. Organic fertilizers, composting systems, and bio-fertilizer technologies are underdeveloped but promising areas. Investment in research and farmer education can gradually reduce our overreliance on imports and create a more resilient agricultural model. This will also align with global trends toward regenerative agriculture and climate-resilient farming.

Nepal’s fertilizer crisis is not just about a missing product it is a reflection of missing priorities. Year after year, despite media reports, farmer protests, and parliamentary debates, little changes. Until we treat this issue with the urgency and seriousness it demands, the same story will repeat itself every season. Fertilizers will arrive too late. Farmers will turn to black markets. Yields will fall. Imports will rise. And the nation will pay the price not just in money, but in missed opportunity.

If  Nepal aspires to feed itself and grow through agriculture, then the fertilizer crisis must be treated not as an exception, but as a central challenge. It is a test of our governance, planning, and ability to deliver. And it is one we can no longer afford to fail.

Ravindra Kumar Yadav

Amar Prashad Gupta

MBA Global Business

SAIM College, Mid-Baneshwor

Starting a business in Nepal is an exciting journey, but before you can open your doors to customers or start making profits, it is very important to make your business official and legal. This official recognition comes from registering your company with the Office of the Company Registrar (OCR). Company registration is not just paperwork; it is a legal requirement under the Companies Act, 2063, which explains the rules for forming, managing, and running companies in Nepal. A registered company is considered a legal entity, meaning it exists in the eyes of the law as a separate person from the owners. It protects the owners’ personal property if the company owes money or faces legal problems. A registered company can also own property, sign contracts, hire employees, and even participate in legal actions. 

In Nepal, businesses can register as different types of companies depending on their goals. The most common is a Private Limited Company (Pvt Ltd), which is suitable for small and medium-sized businesses and can have 1 to 50 shareholders. A Public Limited Company is for larger businesses that want to sell shares to the public and raise more capital. A Non-Profit Company is designed for organizations that aim to serve society rather than make profits. Registering a company brings several advantages: legal recognition, limited liability, easier access to funding, and enhanced credibility with customers, suppliers, and investors. Understanding company registration is the first step toward running a secure and successful business in Nepal.

Registering a company in Nepal may seem complicated, but the Companies Act, 2063 provides clear steps to follow. The first step is reserving a unique company name through the OCR online portal or at their office. The name must not be used by any other company and should reflect the business activity. In recent years, online company registration in Nepal has made this process faster and more convenient for entrepreneurs, allowing them to check name availability, submit documents, and track applications from their computer or mobile device without visiting the OCR office physically. After name approval, the next step is preparing the required documents. 

The Memorandum of Association (MOA) describes the objectives of the company, what it plans to do, and its total capital. The Articles of Association (AOA) set rules for managing the company, including director appointments, meetings, and decision-making processes. Shareholders and directors must provide a copy of their citizenship certificates and a consent letter agreeing to join the company.

Proof of the company’s official address is also required. Once the documents are ready, they are submitted to the OCR, either online through the e-Services portal or physically at the office. The OCR verifies the documents and ensures they comply with the law. If everything is correct, the OCR approves the application and issues a Certificate of Incorporation, officially recognizing the company and allowing it to operate legally, open bank accounts, and sign contracts. Following these steps carefully helps prevent legal issues and ensures smooth business operations.

The Companies Act, 2063 governs all aspects of companies in Nepal, including registration, management, operations, and closure. Understanding this law helps business owners stay compliant and avoid fines or penalties. Important sections include Section 3, which explains basic rules for forming a company, including types and minimum shareholders; Section 4, which describes the application process and required documents; Section 5, which focuses on registration approval and issuance of the Certificate of Incorporation; Section 6, which lists the powers and duties of the OCR; and Section 7, which outlines conditions under which a company can be canceled. 

The OCR is the main regulatory authority responsible for ensuring companies follow these rules, but other authorities such as the Inland Revenue Department (IRD) and local government offices also supervise compliance, taxation, and licensing. Entrepreneurs who understand this legal framework can avoid problems and maintain a smooth and trustworthy business operation.

After registering a company, the work does not end. The Companies Act, 2063 and other laws require ongoing compliance. Every company must register with the IRD to obtain a Permanent Account Number (PAN) and, if applicable, register for Value Added Tax (VAT). Certain types of businesses, such as restaurants, travel agencies, or import-export companies, may need additional licenses from local or national authorities. Companies must also submit annual returns to the OCR, showing financial status, number of shareholders, and main activities. 

Proper financial statements, including balance sheets, income statements, and cash flow statements, must be prepared every year. Regular board meetings must be held, and detailed records must be maintained to ensure transparency and proper decision-making. Failure to comply with these rules can result in fines, penalties, or even suspension of business operations. By following post-registration requirements carefully, companies can build trust with investors and customers while ensuring long-term success.

Registering a company in Nepal is the first step toward creating a strong and successful business. By understanding the types of companies, following registration steps, complying with the Companies Act, 2063, and maintaining post-registration requirements, entrepreneurs can build legally recognized businesses that are credible, protected, and ready for growth. Proper registration not only protects owners but also opens doors to funding, business opportunities, and a trustworthy reputation. Every entrepreneur should take registration seriously and seek professional guidance when necessary to ensure a solid foundation for the future.

Prabin Kumar Yadav

BA LLB, Kathmandu School of Law

Over the years, the use of chemical pesticides in Nepal has increased so notably that it has raised serious concerns about human health and environmental sustainability. From residues in the food we eat to the degradation of soil health and biodiversity loss, the long-term consequences of excessive pesticide use are becoming harder to ignore. In Nepal, where agriculture remains the primary livelihood for around 60 percent of the population, the dependence on synthetic chemicals is not just a farming issue; it is a public health and environmental crisis in the making. 

Climate change has led to the emergence of new pests and the expansion of pest habitats, causing farmers to rely more heavily on chemical pesticides to protect their crops. While effective in the short term, the widespread and often unregulated use of synthetic pesticides triggers long-term consequences. These include the development of pest resistance, contamination of soil and water resources, accumulation of toxic residues in food, and alarming impacts on human health and biodiversity. Children, pregnant women, and farm workers are particularly vulnerable to pesticide exposure, with studies linking prolonged contact to respiratory issues, hormonal disruptions, and even cancer. 

Recent studies have shown that vegetables in Nepal often contain pesticide residues exceeding the maximum residue limits (MRLs), rendering them unsafe for human consumption. 

The increasing import of chemical pesticides over recent years highlight Nepal's growing reliance on synthetic pest control measures. As in the fiscal year 2023/24 alone, the country imported 1,664 active ingredient (a.i.) tons of chemical pesticides (PQPMC, 2025). The rising trend reflects an urgent need to question the sustainability and safety of our current pest management practices. 

In the face of these growing challenges, biopesticides present a promising and necessary alternative. Derived from natural organisms or substances like bacteria, fungi, viruses, and botanical extracts, biopesticides control pests without causing harm to the environment, human health, or beneficial organisms. Unlike synthetic pesticides, they are biodegradable, target-specific, and less likely to cause pest resistance. 

Common examples of biopesticides include Bacillus thuringiensis (Bt), which controls caterpillars; neem-based formulations for a broad spectrum of pests; Trichoderma species that act against fungal pathogens; and Jholmal, a locally prepared bio-mixture made from cow/buffalo urine, dung, botanicals, and beneficial microorganisms for pest and disease management, and is currently being promoted in Nepal. These eco-friendly options not only help protect crops effectively but also support soil health, pollinator survival, and long-term agricultural sustainability. 

Biopesticides are no longer just something used by the organic farmers as a choice; they are now essential for mainstream agriculture, especially in the face of climate and health challenges. As climate change continues to alter pest dynamics, and as chemical residues threaten public health, a shift toward safer alternatives is not just desirable but urgent. The adoption of biopesticides supports multiple Sustainable Development Goals (SDGs), including SDG 2 (Zero Hunger), SDG 3 (Good Health and Well-being), SDG 12 (Responsible Consumption and Production), SDG 15 (Life on Land) and SDG 13 (Climate Action). Nepal’s smallholder farmers, who are already facing the brunt of climate impacts, can benefit from locally available and low-cost biopesticide options like Jholmal, which enhance both resilience and productivity. 

Despite their proven benefits, the widespread adoption of biopesticides in Nepal faces several challenges. A major barrier is the lack of awareness and technical knowledge among farmers, many of whom are unfamiliar with how biopesticides work, how to apply them effectively, or how they differ from conventional pesticides. In addition, biopesticides are often not readily available in rural markets, and when they are, they tend to be more expensive or perceived as less effective due to slower action. Limited private sector involvement and insufficient government incentives have also contributed to a weak supply chain and low investment in local production. Without strong institutional support and market linkages, the transition from chemical to biological pest management remains slow and fragmented. 

To accelerate the transition toward sustainable pest management, a coordinated and multi-stakeholder approach is essential. First, government policies should actively promote biopesticides by including them in subsidy schemes. Investment in research and local production of bio-based inputs should be prioritized, enabling farmers to access affordable and effective products tailored to Nepal’s diverse agroecological zones. Extension services must be reoriented to include biopesticide training through farmer field schools, demonstration plots, and digital platforms. The private sector, too, has a critical role to play in developing, distributing, and marketing biopesticides, especially when incentivized through public–private partnerships. Finally, awareness campaigns targeting farmers, consumers, and policymakers can help shift perceptions and generate demand for safe, sustainable pest control solutions.

The overuse of chemical pesticides is not just an agricultural concern; it is a public health, environmental, and sustainability crisis. Thus, biopesticides offer a safer and more sustainable way to manage pests without damaging our soil, food, or ecosystems. If we want safe food and a clean environment, we must act now. With the right support from the government, private sector, and awareness among farmers and consumers, biopesticides can become a powerful solution against pest management.  The future of farming lies not in fighting nature, but working with it. By adopting biopesticides today, Nepal can cultivate a healthier tomorrow; for its land, its farmers, and its people.

The author holds Master's degree in Agricultural Economics and is currently working as a research intern at the International Water Management Institute (IWMI)