India’s relationship with Nepal has always been complex, shaped by historical, cultural, and geographical factors. As a landlocked nation with India on three sides and China on the fourth, Nepal’s strategic significance can not be overstated. However, India’s approach toward Nepal often swings between two extremes ~ either deeply engaged, risking perceptions of interference, or completely disengaged, allowing external players to fill the void. Neither approach serves India’s long-term interests. A balanced, pragmatic policy is the need of the hour. One of the strongest yet underutilised aspects of the India-Nepal relationship is their deep-rooted military connection.

The tradition of the Chiefs of Army Staff in both countries being honorary generals in each other’s armies is a unique arrangement that fosters goodwill and enhances mutual understanding. This relationship should be leveraged more effectively to strengthen strategic ties, beyond symbolic gestures. The Gorkha connection, in particular, has long been a bridge between the two nations, yet India’s Agnipath scheme has created uncertainty for Nepalese Gorkhas seeking service in the Indian Army. Addressing Nepal’s concerns while ensuring a steady recruitment pipeline can prevent unnecessary friction.

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Border disputes, particularly over the Kalapani region, have also been a recurring irritant. While political leaders often use such disputes to rally nationalist sentiment, ground realities suggest a more practical approach. Local communities on both sides share cultural and economic ties, and their daily lives are rarely disrupted by the political tensions surrounding border claims. Engaging in backchannel diplomacy and people-to-people initiatives can help de-escalate tensions and build consensus. Track 2 dialogues, involving retired officials and experts, could pave the way for formal negotiations to avoid the public posturing that often hardens positions. India must also reassess its economic engagement with Nepal.

While Nepal remains dependent on India for essential goods and fuel, Chinese investments and trade have been steadily increasing. Instead of viewing China’s presence with suspicion, India should focus on competing more effectively. Strengthening Nepal’s economic ties with India through better infrastructure, trade incentives, and cross-border connectivity will naturally counter external influence. Indian companies need to adapt to changing market dynamics, particularly in sectors where Chinese firms are making in – roads, such as electric vehicles and consumer goods. Nepal, for its part, wants to maintain good relations with both India and China while safeguarding its sovereignty.

This is a realistic approach, and India should respect Nepal’s strategic balancing act rather than react defensively. Overreacting to Nepal’s engagement with China only pushes it further away. Instead, India should ensure that its ties with Nepal remain strong through military cooperation, economic engagement, and cultural diplomacy. A pragmatic, steady approach ~ neither overbearing nor indifferent ~ will serve India’s interests best. By focusing on shared history, strategic interests, and economic opportunities, India can reinforce its position as Nepal’s most trusted partner, ensuring stability in a region where external influences are constantly at play