India and Nepal as close neighbours.

India and Nepal, established on June 13, 1947 and subsisting at the governmental and people’s level, are moving towards consolidation of mutual understanding, prosperity and peace after passing through various ups and downs.
India and Nepal, as close neighbours, share a unique relationship of friendship and cooperation characterised by open borders and deep-rooted people-to-people contacts of kinship and culture. Modern-day India and Nepal initiated their relationship with the India-Nepal Treaty of Peace and Friendship of 1950 and accompanying secret letters that defined security relations between the two countries, and an agreement governing both bilateral trade and trade transiting Indian territory.But, since late 2015, cultural and political issues have strained relations between the two countries with anti-Indian sentiment growing amongst the government and people of Nepal.Nepal, in a historical step forward, promulgated its new Constitution on September 20, 2015. But, the Madhesis, the Janajatis and the Tharus, who are considered as the marginalised groups, felt they were being left out in the new Constitution. These groups, Madheshis in particular, blockaded the border points from September 23, 2015 and ended the protest action on February 5, 2016, after 135 days. More than 50 people were killed in protest-related violence. Modern-day India and Nepal initiated their relationship with the 1950 Indo-Nepal Treaty of Peace and Friendship and accompanying secret letters that defined security relations between the two countries, and an agreement governing both bilateral trade and trade transiting Indian territory. The 1950 treaty and letters exchanged between the then Indian government and Rana rulers of Nepal, stated that "neither government shall tolerate any threat to the security of the other by a foreign aggressor" and obligated both sides "to inform each other of any serious friction or misunderstanding with any neighboring state likely to cause any breach in the friendly relations subsisting between the two governments." These accords cemented a "special relationship" between India and Nepal that granted Nepalese the same economic and educational opportunities as Indian citizens in India and preferential treatment to Indians compared to other nationalities in Nepal. The Indo-Nepal border is open; Nepalese and Indian nationals may move freely across the border without passports or visas and may live and work in either country. However, Indians aren't allowed to own land-properties or work in government institutions in Nepal, while Nepalese nationals in India are allowed to work in Indian government institutions (except in some states) and some civil services (the IFS, IAS, and IPS).[1]

Since late 2015, cultural and political issues have strained relations between the two countries with anti-Indian sentiment growing amongst the government and people of Nepal.In the 1950s, the Rana rulers of Nepal welcomed close relations with India. Rana rule in Nepal however collapsed within 3 months of signing the PFT. As the number of Indians living and working in Nepal's Terai region increased and the involvement of India in Nepal's politics deepened in the 1960s and after, so too did Nepal's discomfort with the special relationship. India's influence over Nepal increased throughout the 1950s. The Nepalese Citizenship Act of 1952 allowed Indians to immigrate to Nepal and acquire Nepalese citizenship with ease—a source of huge resentment in Nepal (This policy was not changed until 1962 when several restrictive clauses were added to the Nepalese constitution).[3] Also in 1952, an Indian military mission was established in Nepal.[3] At the same time, Nepal's dissatisfaction with India's growing influence began to emerge, and overtures to China were initiated as a counterweight to India.[3]

Following the 1962 Sino-Indian border war, the relationship between Kathmandu and New Delhi thawed significantly. India suspended its support to India-based Nepalese opposition forces which India had been doing in violation of 1950's PFT, which clearly stated 'not to allow any country's soil to be used against the other'. The defeat of Indian forces in 1962 provided Nepal with the breathing space and Nepal extracted several concessions, including transit rights through India. In exchange, through a secret accord concluded in 1965, similar to an arrangement that had been suspended in 1963, India won a monopoly on arms sales to Nepal.[4]

In 1969 relations again became stressful as Nepal challenged the existing mutual security arrangement and asked that the Indian security checkposts and liaison group be withdrawn. Resentment also was expressed against the Treaty of Peace and Friendship of 1950. India withdrew its military checkposts and liaison group, although the treaty was not abrogated.[4]

Tensions came to a head in the mid-1970s, when Nepal pressed for substantial changes in the trade and transit treaty and openly criticised Sikkim's 1975 annexation by India. In 1975 King Birendra Bir Bikram Shah Dev against the backdrop of Indian annexation of Nepal's close neighbor 'The Kingdom of Sikkim' proposed Nepal to be recognized internationally as a 'Zone of Peace' where military competition would be off limits. Nepal's proposal received support from China and Pakistan but not from India[3] In New Delhi's view, if the king's proposal did not contradict the 1950 treaty that the-then Indian government had signed with the Rana rulers of Nepal, it was unnecessary; if it was a repudiation of the special relationship, it represented a possible threat to India's security and could not be endorsed. In 1984 Nepal repeated the proposal, but there was no reaction from India. Nepal continually promoted the proposal in international forums and by 1990 it had won the support of 112 countries including the USA, the UK, and France.
1970–1980

In 1978 after the formal acknowledgement of the Himalayan Kingdom of Sikkim being an Indian state by Nepal, India agreed to separate trade and transit treaties, satisfying a long-term Nepalese demand. However, much to the annoyance of Nepalese government and in continued violation of the 1950s PFT, India consistently allowed the opposition parties of Nepal to use Indian soil to launch agitation against the Nepalese government and refused to endorse Nepal as a Zone of Peace. In 1987 India urged expulsion of Nepalese settlers from neighboring Indian states that led to expulsion of thousands of Nepali-speaking people from Meghalaya,[5] and Nepal tried to retaliate by introducing a work permit system for Indians working in Nepal but the Nepalese government failed to implement the provision because of the protest from madheshis.[6]

In 1988, when two treaties were up for renewal, Nepal refused to accommodate India's wishes for a single trade and transit treaty stating that it violates the principle of freedom to trade. Thereafter, both India and Nepal took a hard-line position that led to a serious crisis in India–Nepal relations. Nepalese leaders asserted the position that as per the UN charter, transit privileges were "a fundamental and a permanent right of a land-locked country" and thus India's demand for a single treaty was unacceptable.[7] So, after two extensions, the two treaties expired on 23 March 1989, resulting in a virtual Indian economic blockade of Nepal that lasted until late April 1990.[8] As time passed Indian economic sanctions over Nepal steadily widened. For example, preferential customs and transit duties on Nepalese goods entering or passing through India (whether imports or exports) were discontinued. Thereafter India let agreements relating to oil processing and warehouse space in Calcutta for goods destined to Nepal expire. Aside from these sanctions, India cancelled all trade credits it had previously extended to Nepal on a routine basis.