A new phase in India-Nepal relations

Published 9 June 2026 · politics

Nepal Prime Minister Balendra Shah “Balen” limited his intervention in a parliamentary discussion on the boundary dispute between India and Nepal over Kalapani, Lipulekh, and

Nepal Prime Minister Balendra Shah “Balen” limited his intervention in a parliamentary discussion on the boundary dispute between India and Nepal over Kalapani, Lipulekh, and Limpiyadhura (areas claimed by both countries) on May 31 to a few minutes. He seemed to suggest that the issue was not one-sided. “What surprised me after becoming Prime Minister is that it is not only India that is accused of encroaching Nepalese land. In some places, Nepal may also be occupying territory claimed by India. Both countries should examine the facts objectively and resolve the matter amicably as friends.” This was predictably greeted with a storm of protests within and outside Nepal’s Parliament, despite the Prime Minister’s reiteration that Nepal and India were working towards resolving the boundary issue through diplomatic channels. Border dispute response Nepal has also objected to the resumption of India-China trade through the Lipulekh Pass. Shah shared that the diplomatic note sent by Nepal on this matter received a positive response from India, and both sides have agreed to address the issue through dialogue. Earlier, Nepal’s Foreign Ministry reiterated its commitment to resolving the boundary issue through diplomatic means. The statement came after India rejected Nepal’s objection to the Kailash Mansarovar Yatra route through Lipulekh Pass, describing Kathmandu’s territorial claim as ‘unjustified’ and “influenced by ‘unilateral artificial enlargement’.” However, the latest developments suggest a more rational approach, which hopefully discards the possibility of the dispute becoming a lasting bilateral irritant and signals a fresh beginning.

It is still early days, and the new government’s thoughts in Kathmandu on resetting relations with India are not yet clear. Shifting political tone What is already clear is that Nepal’s governance is firmly in the hands of a young generation with its eye on the future rather than the past, determined to free the country from the chains of corruption, nepotism, and ideology — and to prioritise social and economic issues. Objections raised over trade and religious tourism through areas claimed by Nepal, the postponement of the Indian Foreign Secretary’s visit to Nepal to discuss the Prime Minister’s India visit and the disinclination of Mr. Shah to break protocol to receive India’s Foreign Secretary, all reflect an emerging stance that India will be treated on par with other countries, rather than being given the easy access to top leadership it has traditionally enjoyed under the much-discussed “special relationship.” These may have injected jarring notes in the trajectory of ties, but India appears to have taken them in stride. Nepalese observers have questioned the wisdom of ignoring India’s crucial importance to Nepal’s present and future well-being. Likely, the bilateral ambiance will not be held prisoner to protocol or to assertions of irrational nationalism or de facto inequality. Diplomatic path ahead The sobering thought is that discussions between diplomats and experts may not yield a solution, and the fact that despite both sides emphasising economic cooperation as the core of bilateral ties, the boundary issue cannot be pushed to the back burner indefinitely.