In the shadow of resurgent royalist fervour sweeping through Nepal since 8 March 2025—the day the former king made a public appearance and the streets of Kathmandu echoed with ‘bring back the monarchy’—a familiar script is playing out. That India has a role in such demonstrations.
Now, with ultra-nationalist sentiment at a fever pitch and the monarchy re-emerging as a symbol of defiance, India-Nepal relations stand at an extreme crossroads.
The much-talked-about Modi-Oli handshake on the sidelines of the BIMSTEC Summit in Bangkok was billed as a diplomatic reset, but it now looks like a fleeting photo-op lost in the noise of domestic chaos and regional distrust. So, where do we go from here—toward reconciliation or rupture?
A quick and easy answer would be that the two countries maintain a status quo: engage when required, and let business, trade, and people-to-people ties continue to hold the ground between the two next-door neighbours.
But tensions on the political turf often overshadow the entire spectrum of relationships, and that may be happening between Kathmandu and Delhi—a familiar pattern in the past seven decades of diplomatic ties. However, an understanding of what contributed to this thaw may have the answer to what can be done.
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Kalapani, Ram, and India’s Lakshman Rekhas
KP Sharma Oli, the chairman of the Nepal Communist Party-UML (CPN-UML)—the largest party in Nepal’s Parliament—was appointed Prime Minister in July 2024. By established tradition, his first state visit should have been to India. However, it seems that Oli did not receive an invitation from Delhi, possibly because Prime Minister Modi had a busy year in the latter half.
With no reported invitation from India, Oli chose to visit Beijing last December. After all, he needed to establish his foreign policy priorities with either of his two neighbours. And for a landlocked country flanked by two Asian giants, what is wrong with choosing China this time?
In answering the core question, if anything has truly strained Kathmandu’s ties in the past decade with New Delhi, it has been KP Sharma Oli’s combative posture. This has been defined by a series of unilateral policy decisions that have repeatedly irked India.
Foremost among them was his move to thrust the Kalapani territorial dispute into the centre of national politics. He redrew Nepal’s political map to include the contested region and enshrined this claim in the constitution. This was not just a symbolic move—it was a permanent assertion over a territory that Nepal had previously recognised as disputed and still under diplomatic negotiation.
Nepal’s decision to unilaterally change its political map was particularly ill-timed. It came at a moment when India was entangled in a high-stakes border standoff with China. This made Nepal’s assertiveness appear not only opportunistic but also strategically insensitive in New Delhi’s eyes.
The Modi administration, which has been highly attuned to issues of sovereignty and territorial integrity, viewed Oli’s manoeuvre as a provocation that crossed a red line. It derailed trust and complicated an already fragile bilateral relationship.
What has further strained ties in recent years is Oli’s subtle and seemingly deliberate targeting of shared cultural sensitivities. One of the most controversial examples was his attempt to reinterpret the birthplace of the Hindu god Ram. He claimed that the “real” Ayodhya was located in Nepal, not in India.
The reasoning given was that it was implausible for Ram to have travelled from India to Janakpur to marry Sita. He suggested, instead, that Ram was born closer to Janakpur itself.
Such revisionist claims not only troubled religious sentiment, but were also seen in India as a calculated ‘cultural encroachment’—one that sought to question deeply rooted cultural and historical narratives shared between the two nations.
Handshake, then backslide
What appears to be more of a growing discontent with Oli’s leadership—rather than with Nepal as a whole—stems largely from how he politically exploited events like the 2015 border blockade and the map controversy to fuel anti-India sentiment.
Against this backdrop, the Modi–Oli Summit on the sidelines of the BIMSTEC Summit in Bangkok was widely seen as a rare opportunity to reset the strained ties with India. Upon his return, Oli even claimed that a “deep understanding” had been reached with Prime Minister Modi, raising cautious optimism that both sides might be ready to move past the rhetoric and engage more constructively.
India’s Foreign Ministry also noted in its statement that “the two leaders reviewed the unique and close relationship between India and Nepal… (and) agreed to continue working towards further deepening the multifaceted partnership between our two countries and peoples.”
However, that optimism seems to have been short-lived for many in Nepal.
Within a week, during his opening remarks at the Himalayan Dialogue—one of the region’s key geopolitical forums—Oli reignited tensions with a veiled yet pointed remark: “If a neighbour intends to eat the paddy planted in another neighbour’s field, it cannot be called a neighbour, and so it cannot be called neighbourly relations.”
The metaphor was widely interpreted as a reaffirmation of Nepal’s territorial claims, and a subtle jab at India.
Adding to the unease, Oli went on to express what again sounded like a thinly veiled complaint: “The genuine concerns of neighbours should be understood. If three people are common friends, one should not be seen as tilting towards another. We should not tilt towards Beijing or Delhi.”
While this echoed Nepal’s long-standing commitment to non-alignment—a principle enshrined in its constitution and reinforced in its 2016 National Security Policy—it nonetheless cast a shadow over the diplomatic goodwill generated in Bangkok.
A rock and a hard place
India’s External Affairs Minister S Jaishankar has made it clear that “by doing something on their side, they (Nepal) are not going to change the situation between us or the reality on the ground.” Like it or not, for New Delhi, the ground realities remain unchanged.
But for Kathmandu, the unilateral move to alter the status quo has only further complicated the matter. By passing a constitutional amendment in June 2020 to incorporate the new disputed map, Nepal may have locked itself into a hardline position—one that leaves no room for diplomatic flexibility. Oli, who was instrumental in executing this move, shows no intention of walking it back.
Should any future leadership in Nepal attempt to restore the status quo ante, it would have a huge cost.
So where does that leave space for improving the relationship on the political front?
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Road ahead
One immediate and pragmatic resolution could be for both parties to accept that dealing with grievances should not be viewed as a zero-sum game. Instead, it should be seen as an opportunity to move forward through quiet diplomacy, away from the noise of public posturing.
For Nepal, this would mean a conscious effort by its political parties to avoid weaponising anti-India rhetoric for short-term political gains—which has truly cost a thaw with India.
For India, the moment does not demand dramatic recalibrations, but solid, non-reactive engagement that signals it is open to cooperation—without getting drawn into every provocation. The Indian establishment may have already taken a step in this direction by opening up to more meetings with Nepalese counterparts and continuing broader engagement.
Earlier this month, the Indian Agriculture Minister was in Kathmandu to deliberate on cooperation in the agriculture sector, followed by agreements being signed. There have been similar visits from Nepal to India, and such exchanges continue to provide momentum to the relationship.
But knowing that Delhi is still unhappy with actions taken five years ago, it is time Kathmandu takes the lead in lowering the political temperature—recognising that India is unlikely to prevent a diplomatic reset.
An alternative path could involve returning to an established mechanism that once fostered a long-standing partnership between the two neighbours—the 1950 Treaty of Peace and Friendship. This treaty remains the foundation of the bilateral relationship.
However, revising the treaty itself is on the agenda and may represent the next step in resolving the disputes.
The Experts Groups mechanism, established in 2016 by the two governments, submitted a report that remains undisclosed, likely because it does not address the fundamental issues concerning India’s security.
While the global landscape of world affairs has shifted, so have regional dynamics. Nepal must be willing to embrace a fresh start rather than insisting on a report from an expert group that never came to light.
Thirdly—and perhaps most critically—India has long urged Nepal not to allow the China factor or populist sentiment to define its relationship with Delhi.
While hashtags like #BackOffIndia or #GoBackIndia may trend during political flashpoints, they are often driven by social media outrage and elite-driven nationalism, not by the lived realities of the broader public. They are also often shaped by the agendas of a diaspora living far from Nepal.
Similarly, the media in India may not need to be so sensitive to Nepal’s every foreign policy move, especially when it is landlocked.
To conclude, the growing unrest in Nepal stems less from India’s so-called encroachment and more from deepening frustration with the country’s own political establishment.
The anger on the streets is directed toward a self-serving political class that routinely inflames nationalist sentiment—not to defend the national interest, but to distract from failures in governance, economic delivery, and institutional reform.
Breaking this cycle of blame and deflection is essential if India and Nepal are to rebuild trust and restore a meaningful relationship that is rooted in shared history, culture, and geography.
Also, it may be high time for both countries to see the relationship beyond traditional lines and engage more on futuristic ones, including science and technology.
Rishi Gupta is the Assistant Director of the Asia Society Policy Institute, New Delhi. He writes on the Asia-Pacific affairs, strategic Himalayas, and South Asian geopolitics. He tweets @RishiGupta_JNU. Views are personal.
(Edited by Asavari Singh)