Economic Cooperation
India views economic cooperation with Nepal as a long-term investment in regional peace, prosperity and people-to-people ties. There has been sustained cooperation between the two countries, especially in the areas of trade, energy, infrastructure and connectivity.
A majority of Nepal’s third-country trade transits through Indian ports and roads. India allows power import/export with Nepal under a bilateral Power Trade Agreement. Recently, electronic Cargo Tracking System (eCTS) and digital Country of Origin Certificates (e-CoO) have been introduced to streamline border trade. Indian companies have invested in hydropower, manufacturing, telecom, and banking in Nepal.
India has undertaken several significant development partnership projects in Nepal in the last few years, launching several connectivity projects to facilitate Nepal's access to maritime transport and trade routes. These include Jaynagar-Bijalpura Rail Link, Raxaul- Birgunj ICD Rail Link, Hulaki Road, Integrated Check Post at Birgunj, etc. To ensure uninterrupted supply of petroleum products from India to Nepal, there is a cross border petroleum pipeline from Motihari in India to Amlekhgunj in Nepal. This is the first such pipeline in South Asia. This pipeline is being extended from Amlekhgunj to Chitwan.
The Government of India is collaborating with the Government of Nepal to construct hospitals, schools, colleges, drinking water facilities, sanitation, drainage, rural electrification, hydropower, embankment and river management works through implementation of High Impact Community Development Project (HICDP) at the grassroots level to improve the quality of life of people at the local level. In January 2024, the cost limit of HICDP project has been increased to Rs 20 crore to implement larger projects.
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, rural electrification, embankment & river management, etc. The Government of India has been gifting ambulances and school buses to various institutions working in health and education sectors in Nepal every year. So far 204 ambulances and 38 school buses have been gifted to the beneficiary hospitals and schools in areas of Consulate’s jurisdiction. Most recently on 14 June 2025, Consulate gifted 7 ambulances to the beneficiary hospitals of Madhesh Pradesh.
India has a decades-long history of human resource and capacity building programmes in Nepal through scholarship schemes covering students from Class VI to PhD in a wide range of courses/streams such as engineering, medicine, agriculture, pharmacology, food technology, computer applications, business administration, music and fine arts etc. It flows from India's focus on “Neighbourhood First” policy and India's aim to create mutually beneficial cooperation.
