What will Modi’s 3.0 mean for Nepal ?

India’s 18th Lok Sabha (lower house of parliament) election results are out, with the National Democratic Alliance (NDA) led by the Bharatiya Janata Party (BJP) securing the majority needed to form a new government. Although the BJP did not achieve a single-party majority as it did in 2014 and 2019, coalition support ensures that Narendra Modi will enter a historic third consecutive term, a first since 1962. 

The election results indicate a weakening of the BJP’s dominance, a resurgence of the Indian National Congress, and a growing influence of regional parties. This also marks the return of coalition governance in India after a decade. Since Nepal and India are close neighbors, a pertinent question arises: What will India’s Nepal policy look like under Modi’s third term? Over the past decade, Nepal-India relations under Modi's leadership have seen many fluctuations. 

Modi’s emphasis on the ‘neighborhood first policy’ in 2014 placed Nepal at the forefront. However, Nepal-India relationship hit its lowest point right after Nepal promulgated its new constitution in 2015. Seemingly to show its disapproval of Nepal’s new charter, India imposed an undeclared border blockade for about six months, causing an economic and humanitarian crisis in Nepal that was still reeling from the devastating earthquake of 2015.

Relations began to improve from mid-2016 but hit another rocky patch during the 2019 map dispute. Despite these highs and lows, Modi visited Nepal five times during his first two terms. Under his leadership, bilateral mechanisms were revived, several long-standing issues were resolved, and numerous connectivity projects—such as the cross-border pipeline, Integrated Check Post, railways, roads, and digital connectivity— were advanced. In the final months of this second term, two countries signed a power agreement to export Nepali electricity in India and Bangladesh. 

Recently, bilateral relations have stabilized, and with Modi’s third term, major changes to India's Nepal policy are unlikely. Over the past decade, the BJP has strengthened its ties with Nepal's political parties. In several instances, Nepali leaders are employing BJP channels to reach out to the highest level of government to resolve outstanding issues.

This elevation of bilateral relations to a political level has opened more communication channels. Prior to 2014, interactions were largely limited to bureaucratic and security agencies, with minimal high-level exchanges. Recently, the relationship has evolved into a robust development partnership, though some contentious issues remain unresolved. 

While the BJP has faced criticism for allegedly fueling Hindu radicalism, these claims lack independent verification. Before the elections, political analysts speculated that the BJP might push to turn both India and Nepal into Hindu states in Modi’s third term. However, the return of a hung parliament may hinder such plans. The Modi government should reassure Nepali leaders that there is no such agenda in Nepal. 

Continuation of Modi as prime minister presents an opportunity for Nepal to address pending issues and explore future avenues. Compared to the BJP, the Indian National Congress and other parties have fewer communication channels with Nepal's political leaders. Key contentious issues, such as the Peace and Friendship Treaty and border disputes, require intense diplomatic and political dialogue. Both sides must avoid politicizing these issues to maintain healthy bilateral relations. India’s Nepal policy is expected to remain stable for India’s political parties are not much divided on foreign policy issues. 

Nepal government and political parties need a clear strategy for engagement with India. All political parties in Nepal should unify on major issues with India, ensuring that changes in government do not disrupt bilateral relations. Consistent positions from major political leaders, regardless of their power status, will facilitate smoother negotiations with India on contentious issues. It would have been better if those issues were settled when there was a powerful government led by Narendra Modi for 10 years. 

Enhanced coordination between political leadership and bureaucracy is essential. Rather than focusing solely on India’s Nepal policy, Nepal must prepare its own strategy for dealing with India, which is poised to become the world’s third-largest economy. The key question is how Nepal will manage this relationship, with economic and development partnerships forming the foundation of bilateral ties over the past decade.