Understanding Nepal-India ties thru aid and FDI

King Prithvi Narayan Shah, the founder of modern Nepal, once stated, ‘Nepal is a yam between two boulders.’ This statement has become an evergreen mantra for understanding and managing Nepal’s foreign affairs. According to him, the ‘two boulders’ are India and China, and Nepal’s strategy has always been the ‘strategy for survival,’ as rightly pointed out by Leo E Rose. In realpolitik, all strategies are inherited within the geography of the country—‘Geography is the mother of strategy’. Secondly, geography stands as the most prime factor in implementing the foreign policy of any state because, in most cases, it is ‘fixed’.

Within Nepal, the sentiment of the people has always been a fear of two dynamics: the fear of foreign intervention and natural disasters/earthquakes. To elaborate further, Nepal shares close ties with India in many aspects, from geography to politics, economy, and culture. People in Nepal often find themselves in a forced position to balance ‘sovereignty and integration’ with India. At the same time, China is no longer an ‘inactive’ force in global politics and has an interest in South Asia. That ‘interest’ is sometimes ‘hard’ too. As a Nepali, the fear of being caught in the ‘radar’ of these giants, including the impact of extra-regional powers like the US, can’t be ignored. Nepal resides in an earthquake-prone area, and the foundation of every development must focus on earthquake resilience. These two ‘fears’ have been haunting Nepal and its people for quite a long time.

Power centers have a ‘natural’ interest in the country located between two giants with a comparatively low level of governance efficiency and societal development, allowing foreign aid  ‘projects’ to flourish, thanks to an unfavorable investment climate that curtails FDI in the country.

Nepal-India development partnership

Since the 1990s, India’s foreign aid to Nepal has been largely guided by the Gujral Doctrine. The doctrine states that, “India does not ask for reciprocity with its neighbors like Nepal, Bangladesh, Bhutan, the Maldives and Sri Lanka. Instead, it gives and accommodates what can be given in good faith and trust.” However, as a neighbor, India has not effectively translated these narratives with its smaller neighbors, resulting in tensions from time to time.

 

When Indian Prime Minister Narendra Modi assumed power in 2014, he endorsed the Neighborhood First policy, making five trips to Nepal—unprecedented in the past 17 years for any Indian Prime Minister. These visits symbolized strong ties and demonstrated a commitment to collaborating with Nepal based on its development needs. Since May 2014, there have been 17 exchanges at the level of Head of State/Head of Government. Aligned with the ‘Neighborhood First’ policy, Indian Prime Minister Modi has visited Nepal five times, and the Nepali Prime Minister visited India eight times since Jan 2015.

Since 1954, after the establishment of the Indian Aid Mission in Nepal, India has supported Nepal in the development of major infrastructure projects, including the construction of Tribhuvan International Airport, water supply systems and hospitals.

After India’s economic blockade in 2015, India has been actively involved in the development of connectivity with Nepal through construction of Integrated Check Posts and Railways in Nepal. To facilitate the construction of two broad-gauge cross-border railway links—Jayanagar-Bardibas and Jogbani-Biratnagar—financial and technical assistance was provided to Nepal. Furthermore, MOUs were signed to conduct the Final Location Survey for the proposed broad-gauge line between Raxaul and Kathmandu in October 2021. The Draft Detailed Project Report resulting from this Final Location Survey was submitted to Nepal in July 2023 for review and consideration. In FY 2020-21, India provided a grant of $10.93m, a loan of $60m, and $1.38m as Technical Assistance.

India’s shift

The year 2015 marks India’s shift away from engagement in politically sensitive issues with Nepal (in most cases), replacing it with a focus on development agendas. Additionally, India’s grassroots engagement has been facilitated through High Impact Community Development Projects (HICDPs). In Jan 2024, the cap of each project under HICDPs was increased to Rs 200m. Due to India’s intense engagement in Nepal’s political affairs since 1950, HICDPs have been at the center of debate in Nepal, with concerns about India's alleged intervention at the grassroots level to promote its vested interests.

Challenges

Despite such collaborative efforts, Nepal’s trade deficit with India has been steadily increasing. In 2015-16, Nepal’s trade deficit with India stood at $3,581m, with exports amounting to $419m and imports reaching $4,000m. By 2021-22, Nepal’s exports to India had increased to $1,330m, while imports surged to $9,580m, resulting in a trade deficit of $8,250m. In May 2024/25, Nepal’s trade deficit with India reached $9.63bn. This growing trade deficit is primarily due to Nepal’s heavy reliance on Indian petroleum products, vehicles and consumer goods, while Nepal’s exports, mainly agricultural products, struggle to compete in the Indian market.

In April 2022, both countries released a ‘Joint Vision Statement on Power Sector Cooperation’ to enhance power cooperation. However, within Nepal’s political circles, many Nepalis perceive this vision statement as India’s attempt to control Nepal’s water resources while discouraging investment from other foreign players. This perception has been reinforced by India’s consistent reluctance, both in actions and statements, to purchase electricity generated through Chinese capital or contractors in Nepal.

Way forward

Concluding all of the above, India has been focusing on connectivity issues between Nepal and India after India’s economic blockade in 2015, moving away from hardcore political issues. The increasing connectivity with India will help Nepal unlock new potentials, but due to Nepal’s own internal limitations and turbulence, this has resulted in a deeper economic dependency on India rather than interdependence.

India’s involvement at the grassroots level, aimed at empowering local communities through foreign aid and accounting for 35 percent of FDI stock, undeniably highlights its significance in Nepal. Furthermore, Nepal’s geographical positioning—surrounded by India on three sides—places it in a ‘locked’ relationship with India. The interplay between geographical proximity and distinct national identity has led to numerous fluctuations in their political dynamics since the 1950s.

From Nepal’s side, there is a growing perception that India is accelerating its connectivity development projects in Nepal at a time when Nepal is overwhelmed by multiple development commitments from China. Whether India is responding only after Chinese pledges to Nepal or if this is merely a coincidence remains a matter of debate. However, the narrative in Indian media and public discourse about Nepal shifting toward a pro-China stance is a fabricated attempt to undermine bilateral relations between Nepal and India.

Summing up, Nepal and India should move ahead by taking into account each other’s security sensitivities resulting from the open border.

Trump says he will talk to Putin on Tuesday as he pushes for end to Ukraine war

President Donald Trump said he would speak to Russian President Vladimir Putin on Tuesday as he pushes to end the war in Ukraine, Associated Press reported. 

The U.S. leader disclosed the upcoming conversation to reporters while flying from Florida to Washington on Air Force One on Sunday evening.

“We will see if we have something to announce maybe by Tuesday. I will be speaking to President Putin on Tuesday,” Trump said. “A lot of work’s been done over the weekend. We want to see if we can bring that war to an end.”

Any such conversation could be a pivot point in the conflict and an opportunity for Trump to continue reorienting American foreign policy. European allies are wary of Trump’s affinity for Putin and his hardline stance toward Ukrainian President Volodymyr Zelenskyy, who faced sharp criticism when he visited the Oval Office a little more than two weeks ago.

Although Russia failed in its initial goal to topple Ukraine with its invasion three years ago, it still controls large swaths of the country.

Trump said land and power plants are part of the conversation around bringing the war to a close, according to the Associated Press. 

“We will be talking about land. We will be talking about power plants,” he said.

Trump described it as “dividing up certain assets.”

Trump special envoy Steve Witkoff recently visited Moscow to advance negotiations, and he said earlier Sunday that a call between Trump and Putin could come soon.

During his conversation with reporters on Air Force One, Trump said he was pushing forward with his plans for tariffs on April 2 despite recent disruption in the stock market and nervousness about the economic impact.

 “April 2 is a liberating day for our country,” he said. “We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”

Trump has occasionally changed course on some tariff plans, such as with Mexico, but he said he had no intention to do so when it comes to reciprocal tariffs, Associated Press reported. 

 “They charge us and we charge them,” he said. “Then in addition to that, on autos, on steel, on aluminum, we’re going to have some additional tariffs.”

The essence of trust in relationships

Just as life ends when breath ceases, relationships crumble when trust is lost. Trust is the highest form of inspiration one can receive in life. It is an inseparable pillar of happiness and meaningful connections. Whether in personal bonds or professional ties, trust holds immense significance. The very fabric of the world and creation rests on the foundation of trust and faith. To be trusted is to be relied upon.

Yet, one-sided trust lacks stability and can swiftly turn into disappointment. Trust, which takes years to build, can shatter in an instant. At times, repairing broken trust may require a lifetime. True trust finds its meaning in mutuality. Like the two wheels of a chariot, mutual and selfless respect strengthens trust, making it enduring and effective. 

Where trust exists, hope thrives, and confidence is nurtured. Without trust, there is neither hope nor belief. Trust is akin to a mirror—it never lies. Just as a mirror reflects what is placed before it, trust reveals the truth of a relationship. It has no fixed shape, color, or structure; it resides in feelings and confidence. The moment reasons are sought to justify trust, doubt begins to creep in. When trust is shaken, confidence wavers and suspicion enters, creating cracks that eventually break relationships apart. 

Human nature and cultural upbringing influence the weight we assign to trust and the distance we place in reliability. Trust should not be granted simply because someone confides in us. The same person who shares secrets with us may also betray ours. Trust is shaped by tendencies and possibilities. It is the foundation of relationships, which are intertwined with life's many facets—joy, sorrow, happiness, pain, hatred, greed, attachment and selfishness. As life unfolds, so does the expansion of trust and relationships. 

Trust is the fruit that grows on the tree of relationship. Its sweetness stems from the qualities of reliability. Hope and despair determine the quality of trust and faith, which in turn shape the longevity and depth of relationships. Intentions also play a crucial role in sustaining trust. It is often said that in love, war, and politics, anything is acceptable. Thus, the formation and dissolution of relationships are often dictated by circumstances. Trust and faith without principles are fragile. A healthy relationship should be like hands and eyes—when the hand is hurt, the eyes weep, and when the eyes tear up, the hands wipe them away. 

Trust and faith are deeply intertwined with emotional connections. Trust built on lies and illusions is destined to collapse, while relationships grounded in truth and trust endure. Trust is also a reflection of one’s nature. A trustworthy environment fosters morale and positivity. The thread of trust and faith can be incredibly strong or perilously fragile, depending on the circumstances. Faith in trust is like nectar, nourishing relationships, while doubt is poison, eroding goodwill and love. Self-centered trust and deceptive faith can irreparably destroy relationships. 

The wound of broken trust strikes directly at the heart. It shatters emotions and transforms sweet relationships into bitterness. The invisible scars left by broken trust are among life’s most damaging. Countless tragic stories have been written in the ink of suspicion—families have been torn apart, relationships have crumbled and social values have been disrupted. Professional and familial ties have been irreparably damaged. 

A relationship without trust is like life without oxygen. Even if a broken staff of trust is mended, it can never regain its original strength. Failing to place trust and faith wisely leads to suffering. Life is a blend of happiness and sorrow, light and darkness. Blind trust and faith can be perilous. Trusting everyone indiscriminately or trusting no one at all—both are signs of failure. Suspicion is always an inherent possibility in trust and faith, but the issue lies not in suspicion itself, but in how it is perceived. If left unresolved, suspicion can turn golden moments into ashes, weakening individuals and preventing them from reaching the pinnacle of success. 

Where does trust reside? On bright days or dark nights? The comfort of deep sleep often eludes us during the day. Eyelids that close in anticipation of dreams cannot rest in daylight, nor do they favor the light. Emotional wounds disrupt sleep, leaving one tossing and turning, a wet pillow alternating between warmth and cold. It is said that even fire can burn in water, and those who understand time can freeze fire with ice. Rather than relying on fate, those who place trust in their actions seldom remain unhappy. Those who transform tears of pain into strength move through life with resilience and grace.

Trump administration deports hundreds of immigrants even as a judge orders their removals be stopped

The Trump administration has transferred hundreds of immigrants to El Salvador even as a federal judge issued an order temporarily barring the deportations under an 18th century wartime declaration targeting Venezuelan gang members, officials said Sunday. Flights were in the air at the time of the ruling, Associated Press reported.

U.S. District Judge James E. Boasberg issued an order Saturday temporarily blocking the deportations, but lawyers told him there were already two planes with immigrants in the air — one headed for El Salvador, the other for Honduras. Boasberg verbally ordered the planes be turned around, but they apparently were not and he did not include the directive in his written order.

White House press secretary Karoline Leavitt, in a statement Sunday, responded to speculation about whether the administration was flouting court orders: “The administration did not ‘refuse to comply’ with a court order. The order, which had no lawful basis, was issued after terrorist TdA aliens had already been removed from U.S. territory.”

The acronym refers to the Tren de Aragua gang, which Trump targeted in his unusual proclamation that was released Saturday

In a court filing Sunday, the Department of Justice, which has appealed Boasberg’s decision, said it would not use the Trump proclamation he blocked for further deportations if his decision is not overturned.

Trump sidestepped a question over whether his administration violated a court order while speaking to reporters aboard Air Force One on Sunday evening.

“I don’t know. You have to speak to the lawyers about that,” he said, although he defended the deportations. “I can tell you this. These were bad people.”

Asked about invoking presidential powers used in times of war, Trump said, “This is a time of war,” describing the influx of criminal migrants as “an invasion.”

Trump’s allies were gleeful over the results.

“Oopsie…Too late,” Salvadoran President Nayib Bukele, who agreed to house about 300 immigrants for a year at a cost of $6 million in his country’s prisons, wrote on the social media site X above an article about Boasberg’s ruling. That post was recirculated by White House communications director Steven Cheung, according to the Associated Press. 

Secretary of State Marco Rubio, who negotiated an earlier deal with Bukele to house immigrants, posted on the site: “We sent over 250 alien enemy members of Tren de Aragua which El Salvador has agreed to hold in their very good jails at a fair price that will also save our taxpayer dollars.”

Steve Vladeck, a professor at the Georgetown University Law Center, said that Boasberg’s verbal directive to turn around the planes was not technically part of his final order but that the Trump administration clearly violated the “spirit” of it.

“This just incentivizes future courts to be hyper specific in their orders and not give the government any wiggle room,” Vladeck said.

The immigrants were deported after Trump’s declaration of the Alien Enemies Act of 1798, which has been used only three times in U.S. history.

The law, invoked during the War of 1812 and World Wars I and II, requires a president to declare the United States is at war, giving him extraordinary powers to detain or remove foreigners who otherwise would have protections under immigration or criminal laws. It was last used to justify the detention of Japanese-American civilians during World War II.

Venezuela’s government in a statement Sunday rejected the use of Trump’s declaration of the law, characterizing it as evocative of “the darkest episodes in human history, from slavery to the horror of the Nazi concentration camps.”

Tren de Aragua originated in an infamously lawless prison in the central state of Aragua and accompanied an exodus of millions of Venezuelans, the overwhelming majority of whom were seeking better living conditions after their nation’s economy came undone during the past decade. Trump seized on the gang during his campaign to paint misleading pictures of communities that he contended were “taken over” by what were actually a handful of lawbreakers, Associated Press reported. 

The Trump administration has not identified the immigrants deported, provided any evidence they are in fact members of Tren de Aragua or that they committed any crimes in the United States. It also sent two top members of the Salvadoran MS-13 gang to El Salvador who had been arrested in the United States.