Introduction

Since the emergence of modern Nepal, its foreign relations, conditioned by its geography, have been remarkably limited. This chapter discusses the international significance of Nepal and seeks to shed light on the forces driving Nepal's foreign policy in recent decades. Like many countries with a powerful neighbor and significant economic interdependence across a long border, Nepal's ties with India, which dwarf all others, breed both familiarity and resentment. In this chapter, we discuss why this is likely to remain the case, even at a time when Nepal's links to China through Tibet are growing. Nepal is a hotbed of conspiracy theories that blame all internal problems on its southern neighbor, an unhappy disposition if it is to forge a more mutually beneficial relationship with New Delhi, which Nepal's current harsh economic and other realities cry out for.

This chapter starts by highlighting the importance of geography as a major determinant of Nepal's foreign relations and then provides a brief historical overview of Nepal's foreign relations over the past two centuries. It then examines the interests, concerns, and perceptions of Nepal and India with respect to each other, focusing on cooperation over water sharing that could considerably benefit both countries were more trust to develop between them. It subsequently examines China's increasing profile in Nepal and how it affects India–Nepal relations. The chapter concludes that Nepal has limited options to maneuver in its foreign relations and needs to focus on making the best of its geographical constraints through positive engagement, including with India.