It’s time to move on from Kalapani and Ayodhya. India-Nepal need a real reset

(News Agency)- In the shadow of resurgent royalist fervour sweeping through Nepal since 8 March 2025—the day the former king made a public appearance and the streets of Kathmandu echoed with ‘bring back the monarchy’—a familiar script is playing out. That India has a role in such demonstrations.Now, with ultra-nationalist sentiment at a fever pitch and the monarchy re-emerging as a symbol of defiance, India-Nepal relations stand at an extreme crossroads.
The much-talked-about Modi-Oli handshake on the sidelines of the BIMSTEC Summit in Bangkok was billed as a diplomatic reset, but it now looks like a fleeting photo-op lost in the noise of domestic chaos and regional distrust. So, where do we go from here—toward reconciliation or rupture?
A quick and easy answer would be that the two countries maintain a status quo: engage when required, and let business, trade, and people-to-people ties continue to hold the ground between the two next-door neighbours.
But tensions on the political turf often overshadow the entire spectrum of relationships, and that may be happening between Kathmandu and Delhi—a familiar pattern in the past seven decades of diplomatic ties. However, an understanding of what contributed to this thaw may have the answer to what can be done.
Kalapani, Ram, and India’s Lakshman Rekhas
KP Sharma Oli, the chairman of the Nepal Communist Party-UML (CPN-UML)—the largest party in Nepal’s Parliament—was appointed Prime Minister in July 2024. By established tradition, his first state visit should have been to India. However, it seems that Oli did not receive an invitation from Delhi, possibly because Prime Minister Modi had a busy year in the latter half.
With no reported invitation from India, Oli chose to visit Beijing last December. After all, he needed to establish his foreign policy priorities with either of his two neighbours. And for a landlocked country flanked by two Asian giants, what is wrong with choosing China this time?
In answering the core question, if anything has truly strained Kathmandu’s ties in the past decade with New Delhi, it has been KP Sharma Oli’s combative posture. This has been defined by a series of unilateral policy decisions that have repeatedly irked India.
Foremost among them was his move to thrust the Kalapani territorial dispute into the centre of national politics. He redrew Nepal’s political map to include the contested region and enshrined this claim in the constitution. This was not just a symbolic move—it was a permanent assertion over a territory that Nepal had previously recognised as disputed and still under diplomatic negotiation.
Nepal’s decision to unilaterally change its political map was particularly ill-timed. It came at a moment when India was entangled in a high-stakes border standoff with China. This made Nepal’s assertiveness appear not only opportunistic but also strategically insensitive in New Delhi’s eyes.
The Modi administration, which has been highly attuned to issues of sovereignty and territorial integrity, viewed Oli’s manoeuvre as a provocation that crossed a red line. It derailed trust and complicated an already fragile bilateral relationship.
What has further strained ties in recent years is Oli’s subtle and seemingly deliberate targeting of shared cultural sensitivities. One of the most controversial examples was his attempt to reinterpret the birthplace of the Hindu god Ram. He claimed that the “real” Ayodhya was located in Nepal, not in India.The reasoning given was that it was implausible for Ram to have travelled from India to Janakpur to marry Sita. He suggested, instead, that Ram was born closer to Janakpur itself.Such revisionist claims not only troubled religious sentiment, but were also seen in India as a calculated ‘cultural encroachment’—one that sought to question deeply rooted cultural and historical narratives shared between the two nations.
Handshake, then backslide
What appears to be more of a growing discontent with Oli’s leadership—rather than with Nepal as a whole—stems largely from how he politically exploited events like the 2015 border blockade and the map controversy to fuel anti-India sentiment.

Against this backdrop, the Modi–Oli Summit on the sidelines of the BIMSTEC Summit in Bangkok was widely seen as a rare opportunity to reset the strained ties with India. Upon his return, Oli even claimed that a “deep understanding” had been reached with Prime Minister Modi, raising cautious optimism that both sides might be ready to move past the rhetoric and engage more constructively.

India’s Foreign Ministry also noted in its statement that “the two leaders reviewed the unique and close relationship between India and Nepal… (and) agreed to continue working towards further deepening the multifaceted partnership between our two countries and peoples.”

However, that optimism seems to have been short-lived for many in Nepal.

Within a week, during his opening remarks at the Himalayan Dialogue—one of the region’s key geopolitical forums—Oli reignited tensions with a veiled yet pointed remark: “If a neighbour intends to eat the paddy planted in another neighbour’s field, it cannot be called a neighbour, and so it cannot be called neighbourly relations.”

The metaphor was widely interpreted as a reaffirmation of Nepal’s territorial claims, and a subtle jab at India.

Adding to the unease, Oli went on to express what again sounded like a thinly veiled complaint: “The genuine concerns of neighbours should be understood. If three people are common friends, one should not be seen as tilting towards another. We should not tilt towards Beijing or Delhi.”

While this echoed Nepal’s long-standing commitment to non-alignment—a principle enshrined in its constitution and reinforced in its 2016 National Security Policy—it nonetheless cast a shadow over the diplomatic goodwill generated in Bangkok.

A rock and a hard place
India’s External Affairs Minister S Jaishankar has made it clear that “by doing something on their side, they (Nepal) are not going to change the situation between us or the reality on the ground.” Like it or not, for New Delhi, the ground realities remain unchanged.

But for Kathmandu, the unilateral move to alter the status quo has only further complicated the matter. By passing a constitutional amendment in June 2020 to incorporate the new disputed map, Nepal may have locked itself into a hardline position—one that leaves no room for diplomatic flexibility. Oli, who was instrumental in executing this move, shows no intention of walking it back.