Discuss some of the major issues of conflict and cooperation between India, Nepal and Bhutan. (1999)
India, Nepal and Bhutan form a Himalayan sub-system. Two small, landlocked monarchies, as both were in 1999, sit between India and China, tied to India by treaties of 1949 and 1950, open or regulated borders and Indian transit. The pattern is hub-and-spoke: most issues run through India, and the main trilateral dispute, the Bhutanese refugees in Nepal, is one India chose not to arbitrate.
Issues of conflict
India–Nepal
- The 1950 Treaty: Nepali parties call its security letters and arms clause unequal; Indian security agencies dislike its open-border provisions.
- Trade and transit: the 1989 lapse of the trade and transit treaties, after Nepal bought Chinese arms, remains a memory of coercion.
- Water: the Kosi (1954) and Gandak (1959) agreements are seen in Nepal as unequal. Three decades after the Mahakali Treaty (1996), the Pancheshwar project is still unbuilt.
- Security: the open border allows counterfeit currency and militant movement. The IC-814 hijacking from Kathmandu (December 1999) is the reference case, and later strains included the 2015 blockade and the 2020 Kalapani map.
India–Bhutan
- Friction is rare. Bhutan wanted the 1949 “guided by” clause modernised, which came in 2007, and complains about hydropower tariffs and Indian cross-border electricity rules.
- Insurgent camps: ULFA, NDFB and KLO bases in southern Bhutan strained relations until Bhutan cleared them in Operation All Clear (2003).
Nepal–Bhutan, with India in between
- From 1990–91, Bhutan’s “One Nation, One People” policy and citizenship census drove more than 100,000 Nepali-speaking Lhotshampa to camps in eastern Nepal, by way of India.
- Nepal wanted Indian mediation; India called it a bilateral matter. Repeated Nepal–Bhutan talks failed, and the problem ended only through third-country resettlement, mainly in the United States, from 2007.
Issues of cooperation
- Hydropower: Bhutan’s projects (Chukha, Tala, Mangdechhu, and Punatsangchhu-II, inaugurated in November 2025) made it South Asia’s model of mutual gain; the Dorjilung project (2026) adds Tata Power as a 40% private partner. Nepal followed later through access to Indian power exchanges (2021) and the 10,000 MW Long-Term Power Trade Agreement (2024). In 2024 Nepal began selling power to Bangladesh across the Indian grid, the first trilateral trade of its kind.
- Trade and transit: India has free trade with Bhutan, renewed in 2016, and gives Nepal port access under the transit treaty renewed in 2023. The BBIN Motor Vehicles Agreement (2015) showed the limits: Bhutan’s upper house declined to ratify it.
- Security: Gorkha recruitment from Nepal, India’s training team in Bhutan (IMTRAT), and support against insurgents.
- Development and disaster relief: India supports Bhutan’s five-year plans (₹10,000 crore for 2024–29) and led Operation Maitri after Nepal’s 2015 earthquake.
- Regional forums: all three belong to SAARC and BIMSTEC.
Why Bhutan and Nepal diverge
Similar structures produced different outcomes. Bhutan’s monarchy kept India out of party competition, while Nepal’s competitive politics turned anti-India nationalism into an electoral resource. Robert O. Keohane’s “Lilliputians’ Dilemmas” (1969) explains why small states seek security through binding commitments: Bhutan bound itself closer to India, while Nepal hedged through the China card.
Conclusion
Cooperation outweighs conflict, but unevenly: India–Bhutan is the region’s most harmonious bilateral relationship, and India–Nepal its most ambivalent. The present challenge is China, through Bhutan’s boundary talks (still at expert level in 2026) affecting Doklam, and BRI in Nepal. India’s strongest tool remains delivery: energy markets, transit and connectivity that make cooperation with India the rational choice.