India and Nepal share culture and religion and have an open border stretching across five Indian States Uttar Pradesh (551 km), Uttarakhand (275 km), Bihar (726 km), West Bengal (100 km) and Sikkim (99 km).
The two countries have had an open border since 1950, which has benefitted hundreds of thousands of people in both countries. According to www.themigrationstory.com about 700,000 Indians live and work in Nepal. But unofficial estimates suggest 4 million, almost equivalent to the unofficial estimates of Nepalese living and working in India. About 38% of migrations are due to marriage. About 32,000 Gurkhas serve in the Indian army.
Indian firms are among the largest investors in Nepal, accounting for 33.5% of the total FDI in Nepal, worth nearly US$ 670 million. Nepal is India’s 17th largest export destination. India constitutes 64.1% of the total trade of Nepal, comprising about US$ 8.85 billion. This includes US$ 8.015 billion exports from India to Nepal and US$ 839.62 million exports from Nepal to India.
But despite the close people-to-people relations, there has been a long-standing boundary dispute which has defied solution. The relationship is largely good, but there is a substratum of disgruntlement among the Nepalese ruling elite which surfaces from time to time.
A recurring dispute is over an area linking Limpiyadhura in the West with Lipulekh in the East and Kalapani in the South. While India has maintained that Kalapani is in Uttarakhand's Pithorgarh district, Nepal claims that it is in its Dharachula region.
The Lipulekh Pass is an important trade route between China and India. It is also on the Indian pilgrims’ route to Kailash Mansarovar in Tibet.
Nepal’s stand is that the dispute goes back to the unequal Sugauli Treaty of 1816 between the Kingdom of Nepal and the then British rulers of India, namely, the East India Company.
Most maps drawn by Nepal showed the River Kali as the boundary between India and Nepal with all land East of the river being in Nepal and all the West of it being in India.
River Kali’s origin was fixed by Nepal at Limpiyadhura in the Zanskar range of the Himalayas.
A map drawn in 1827 has often been touted as “authentic”, because it was published “According to the Act of Parliament by James Horst Surgh, Hydrographer to the East India Company.” Another map, first released in 1830 and updated in 1846, titled, “Western Provinces of Hindoostan”, also demarcated the river from Limpiyadhura.
But maps after 1880 started mentioning a separate River Kali originating from the Lipulekh Pass. Because of this revised map, Nepal lost some 310 square kms. The Nepalese described this as “cartographic aggression”.
The issue got complicated during the Indo-China war in 1962, when Indian troops were stationed at Lipulekh Pass which was an ideal site to keep a watch on Chinese troops. However, China recognised Kalapani, Lipulekh and Limpiyadhura as India’s, though Nepal had conducted elections in the area in 1959 and collected land revenue from its residents until 1961.
Nepal’s claim to these three places were made in November by printing a Nepal map on the country’s 100 Rupee currency note showing them as being in Nepal. This reignited the controversy that had risen earlier in May 2020 when K.P. Sharma Oli was the Prime Minister of Nepal.
At that time, many Indian commentators attributed Nepal’s claim to alleged Chinese influence on Prime Minister Oli who was the head of the Communist Party of Nepal (United Marxist-Leninist).
But the same allegation cannot be made now because the incumbent government headed by Sushila Karki is anything but Communist or pro-China.
In May 2020, India strongly rejected the Nepalese claim. “This unilateral act is not based on historical facts and evidence. It is contrary to the bilateral understanding to resolve outstanding boundary issues through diplomatic dialogue. Such artificial enlargement of territorial claims will not be accepted by India,” New Delhi said.
On August 30 this year, on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Tianjin, China, Nepalese Prime Minister K.P. Oli enquired from President Xi Jinping about the August 19 agreement between China and India to reopen border trade through the Lipulekh Pass.
The agreement had been concluded by Chinese Foreign Minister Wang Yi and India’s National Security Advisor Ajit Doval in New Delhi. Wang and Doval had agreed to reopen border trade via Lipulekh, Shipki-La and Nathu-La.
On August 20, India dismissed Nepal’s objections, saying Kathmandu’s claims lacked support from historical facts.
“ Our position in this regard has been consistent and clear. Border trade between India and China through Lipulekh Pass commenced in 1954 and has been going on for decades. This trade had been disrupted in recent years due to COVID and other developments, and both sides have now agreed to resume it,” said Randhir Jaiswal, Spokesperson of the Ministry of External Affairs.
Even during the British era, Lipulekh Pass was a major centre for trade and pilgrimage between India and Tibet. In 1991, India and China made it a formal trade route.
Successive governments of India and Nepal have held discussions on Kalapani. In July 2000, Prime Minister B.P. Koirala visited India and discussed the matter with his counterpart. They agreed to conduct a field survey to affirm the demarcation of Kalapani, and set 2002 as the target for its completion. But the survey was not conducted.
The long-standing issue came to a head in October 2019, when the Indian government published a new political map of India, which showed the disputed areas as part of India.
In a tit for tat move, the Nepalese government also published a map which showed all the 'encroached' territories as being parts of Nepal. Nepal also claimed that Kalapani and the Lipulekh were in Nepal as the residents had been paying taxes to the Nepal government. A similar claim was made by the Indian side too.
Radical Nepalese want to re-negotiate the Sugauli Treaty because the British, who were ruling India at that time, had taken away a third of the original Nepalese empire “unjustly and arbitrarily”. There is a theory that the Sugauli Treaty had ceased to exist after the British left India in 1947.
Supporters of this argument say that a new treaty is needed also to take into account contemporary conditions and get rid of the inequities in the 1816 treaty.
A few have even voiced a demand for 'Greater Nepal' including other parts of Uttarakhand which the British had seized following the Anglo-Nepalese Wars in the second decade of the 19 th.Century.
However, stated earlier, India has not ruled out talks to define the border but it has made it clear that it could not barter away Kalapani and the Lipulekh Pass.
And that for two reasons - Firstly, these places are indisputably within India as per the 1816 Sugauli Treaty, and Secondly, these two places are at the tri-junction of India-Nepal and China and therefore strategically important for the defence of India.
India has been having a military presence here since 1950. In 1970, under pressure from Nepalese King Mahendra, it had vacated 17 posts, but had held on to Kalapani.
And most importantly, President Xi had agreed to Indian Prime Minister Modi's proposal to build a road to Tibet across the Kalapani area. While Modi saw the road as an ideal route to the Hindu pilgrimage destination of Kailash-Mansarovar in Tibet, Xi saw it as a good trade route between Tibet and India, to be a part of the grand silk route he is trying to re-create across the Asian continent.