Nepal is one of India’s largest and most prominent development partners. India-Nepal Cooperation for developing modern infrastructure in Nepal began in 1951 with construction of Gauchar Airport in Kathmandu (completed in 1954). The Indian Aid Mission in Nepal was also set up in 1954 for coordinating various developmental projects of the Government of India in areas of connectivity, health, education, power, etc. Over the past seven decades, the India-Nepal development cooperation has expanded and diversified. It now covers a wide range of sectors such as health, education, power, archives, archeology, connectivity, trade, agriculture, cultural heritage preservation, capacity building, etc. The projects implemented are based on the needs and priorities of Nepal and are spread across the length and breadth of the country.

(a) Large and Intermediate Infrastructure Projects - Grant

India-Nepal development partnership began in the 1950s with the assistance provided for the construction of Gauchar Airport (presently Tribhuvan Airport). Some other key projects undertaken in the initial years included the construction of Tribhuvan Rajmarg, construction of East-West Highway (Mahendra Raj Marg), development of Tribhuvan University and some of its affiliates, Kathmandu Water Supply Project, National Archives Building, construction of airports at Janakpur, Bhairawa and Biratnagar, construction of the Institute of Forestry in Hetauda, and several projects in the fields of irrigation, drinking water and hydropower.

Connectivity projects have been an important element of India-Nepal development partnership. An MoU for development of railway infrastructure at five border points was signed between the Government of India and the Government of Nepal in 2010. The cross-border section of the first railway link, connecting Jaynagar (India) to Kurtha (Nepal), became operational in April 2022. The train operations were jointly inaugurated by the Prime Ministers of both countries. In July 2023, this railway link was extended to Bijalpura in Nepal. The work on the final segment of the railway link, from Bijalpura to Bardibas, is ongoing. Similarly, during this period, work was initiated on the Jogbani (India) - Biratnagar (Nepal) rail link. Its cross-border section from Bathnaha (India) to the Nepal Custom Yard (Nepal) was jointly inaugurated by the Prime Ministers of both countries in June 2023 for freight rail operations. The Final Location Survey Report of the new Raxaul-Kathmandu railway link is also being finalised by both countries.

An MoU for the development of Integrated Check Posts (ICPs) along the Indo-Nepal Border in Nepal was signed between the Government of India and the Government of Nepal in 2005. Under this MoU, there are five ICPs being set up in Nepal with India’s grant assistance. Three of them, at Birgunj, Biratnagar, and Nepalgunj, were operationalized in 2018, 2020, and 2024, respectively. Prime Ministers of India and Nepal virtually inaugurated the ICP at Nepalgunj and conducted the ground-breaking ceremony of the ICP at Bhairahawa in June, 2023. An MoU between the Government of India and the Government of Nepal for the development of infrastructure at Dodhara Chandani check post along India-Nepal border was also signed in 2023. The construction of this ICP is set to begin shortly.

In addition to Railways and ICPs, the Hulaki / Terai Roads project and the East – West fiber optics project are two other important projects undertaken in the realm of connectivity.

In the energy sector, development cooperation began with the Trishuli Hydropower projects, Pokhara Hydropower projects, Kataiya Power House and Devighat Hydroelectric project. In recent times, this cooperation has been expanded with the commissioning of the Motihari-Amlekhgunj Petroleum Pipeline (MAPL) in 2019. MAPL became the first cross-border petroleum product pipeline in South Asia region and has yielded economic benefits to the people of Nepal. For further enhancing energy cooperation through pipelines, an MoU for construction of petroleum supply infrastructure by laying the new pipeline between Siliguri and Jhapa, and extending the existing oil pipeline from Amlekhgunj till Chitwan, as well as construction of two greenfield terminals at Chitwan and Jhapa, was signed on 01 June 2023. The foundation stone for the Phase-II of the Motihari-Amlekhgunj Pipeline in Chitwan was also laid on the same day and the project has been completed. Indian Oil Corporation Limited (IndianOil) and Nepal Oil Corporation (NOC) signed a Business to Business (B2B) Framework Agreement on 03 October 2024 for the execution of projects envisaged in the G2G MoU signed in 2023.

India-Nepal development partnership also encompasses cooperation in the health sector. One major health project was the setting up of a 50-seat medical college and a 350-bed hospital at the B.P. Koirala Institute of Health Sciences (BPKIHS), Dharan. Other such projects include the setting up of the Nepal Bharat Maitri Emergency & Trauma Centre (completed in 2008) and the construction of a 5-storey OPD cum Ward Block with facilities to accommodate 2,500 patients at Bir Hospital, Kathmandu (completed in 1985). The former is the first trauma centre with All India Institute of Medical Sciences (AIIMS) like specialized facilities in Kathmandu. The ongoing health sector cooperation also includes supply of medical equipment. India provided 200 Kidney Dialysis Machines and 50 Reverse Osmosis (RO) systems to the Government of Nepal in 2023. The Bhabhatron II Radiotherapy Machine and its associated simulator were also handed over to Bhaktapur Cancer Hospital in 2024.

Another facet of India-Nepal development partnership is the cooperation in the education sector. Some key education sector projects include the Nepal Bharat Maitri Vidalaya in Pokhara, the Manmohan Memorial Polytechnic in Morang, the development of Tri-Chand College in Kathmandu and various projects in Tribhuvan University (establishment of library, Gandhi Bhawan, girls and boys hostel). The construction of Nepal Bharat Maitri Polytechnic in Hetauda is another large education sector project that is ongoing.

The construction of Pashupati Dharamshala in Kathmandu, the development of Patan Industrial Area in Lalitpur, the installation of over 3000 shallow tube wells in the Terai region of Nepal, the construction of a Museum Building in Lumbini are a few of the other important projects undertaken by India in Nepal. India also provided support of 200 vehicles to the Government of Nepal for conduction of smooth elections in November 2022.

Additionally, a new National Police Academy is being constructed in Panauti, Kavrepalanchowk, with India’s grant assistance.

(b) High Impact Community Development Projects (HICDPs) - Grant

A significant facet of India-Nepal development partnership has been the High Impact Community Development Projects (HICDPs) Programme which was started in 2003. These projects are implemented at the grassroot level through local authorities in the priority sectors of Government of Nepal including health, education, drinking water, sanitation & drainage, rural electrification, hydropower, embankment & river training, etc. The year 2023 marked the 20th anniversary of implementation of HICDPs in Nepal. Thus far, 563 projects costing a total of approximately NPR 1,300 crore have been taken up all across Nepal. This includes 288 projects in the education sector of which 198 are school buildings. In January 2024, during the visit of Hon’ble External Affairs Minister of India to Nepal, a new agreement was concluded that increases the financial outlay of each project under this programme from NPR 5 crore to NPR 20 crore.

(c) Gifting of Ambulances and School Buses

The Government of India gifts ambulances and school buses to various institutions working in health and education sectors in Nepal every year. The ambulances help people of Nepal in getting timely medical support. The school buses provide students with a safe and economical mode of transportation to commute to school, especially in far-flung areas. So far, 1009 ambulances and 300 school buses have been distributed across Nepal.

(d) Post-earthquake Reconstruction

Following the earthquake of 2015, the Government of India committed USD 1 billion, comprising USD 250 million as a grant and USD 750 million as a Line of Credit, for post-earthquake reconstruction in Nepal.

USD 150 million (USD 100 million as a grant and USD 50 million from the 4th Line of Credit) was allocated to the housing sector to support 50,000 housing beneficiaries in Gorkha and Nuwakot districts of Nepal. The construction of 50,000 houses has been completed, and the closing ceremony of the project was held in Kathmandu on 15 November 2021.

USD 50 million grant was allocated for the reconstruction of 71 educational institutes in 8 districts of Nepal. All 71 projects have been completed.

A Grant of USD 50 million was allocated for the reconstruction of 133 Health projects in 11 districts of Nepal. Out of these 133 health facilities, 93 health facilities have been completed and the remaining are at various stages of implementation.

A Grant of USD 50 million was allocated for the reconstruction of 30 cultural heritage projects in 8 districts of Nepal. Out of these, 14 projects have been completed and the remaining are at various stages of implementation.

Following the earthquake in Jajarkot on 03 November 2023, Government of India provided 5 tranches of immediate post-earthquake relief supply and announced a financial assistance package of USD 75 million to support Government of Nepal’s reconstruction efforts.

(e) Humanitarian Assistance and Disaster Relief

India has been the first international responder to Nepal for its humanitarian initiatives in times of natural disasters. The Government of India carried out one of its largest overseas disaster relief operations, Operation Maitri, in the aftermath of the devastating earthquake that struck Nepal on 25 April 2015. Indian rescue and relief assistance reached Nepal within six hours of the earthquake. Indian military aircrafts, helicopters, commercial flights, cargo trucks and trains carried relief material and rescue teams to Nepal. 16 Units of the National Disaster Response Force worked in coordination with Nepalese security agencies to help rescue victims and clear debris. Relief and rescue material supplied by India included food and water, medicines, medical aid teams, mobile field hospitals, blankets, tents, tarpaulins, engineering task forces and equipment, oxygen regenerator and cylinders, and other essential commodities and equipment.

During the COVID-19 pandemic, Government of India extended significant support to Nepal, including Intensive Care Unit (ICU) beds, ventilators, RT PCR kits, Personal Protective Equipment (PPE), ambulances, oxygen plants, vital medicines, vaccines, etc.

Following the earthquake in Jajarkot on 03 November 2023, Government of India provided five tranches of immediate post-earthquake relief supplies consisting of prefabricated houses, blankets, large-size tents and sleeping bags apart from essential medicines and medical equipment. Further, India announced a financial assistance package of USD 75 million to support the Government of Nepal’s reconstruction efforts.

More recently, in response to the devastating landslides and floods that occurred across various parts of Nepal from 26-28 September 2024, Government of India provided over 25 tonnes of humanitarian aid, including essential hygiene supplies, medicines, life jackets, sleeping mats, food items, inflatable rubber boats, motors, tarpaulins, sleeping bags, blankets, chlorine tablets, and bottled water to support the affected families. In addition, at the request of the Government of Nepal, Government of India also extended support by providing components of 10 prefabricated steel bridges. These bridges cost more than NPR 38 crore and were provided as a grant.