‘Two-thirds of our trade happens with India’: Why New Delhi matters to Kathmandu as Nepal FM calls ties ‘very strong’

Nepal's Foreign Minister Shisir Khanal has described relations with India as “excellent” and “multidimensional”, highlighting the two countries' deep trade, connectivity, social and cultural links.

Speaking at an Asia Society event in New York, Khanal said around two-thirds of Nepal's trade happens with India, while cultural and social ties between the two countries remain strong.

“Given the multi-dimensional nature of our relationship, two-thirds of our trade happens with India, our access to ports, everything pretty much because of the northern border, it happens through India. The cultural social relationships are very strong between the two countries as well,” Khanal said.

He acknowledged that political ties can sometimes experience “ebb and flow”, but said that “right now”, Nepal's relationship with India is in “one of the excellent” phases.

Why does trade matter for Nepal-India ties?

India is Nepal's largest trading partner and provides crucial transit access to international markets for the landlocked country.

Trade with India accounts for about two-thirds of Nepal's overall external merchandise trade, according to figures cited by the Indian Embassy in Kathmandu.

India also received 81.1% of Nepal's total exports in FY 2024-25, according to the figures cited in the information provided.

Indian companies are also among the major investors in Nepal. Meanwhile, Nepali-manufactured goods receive duty-free access to the Indian market under the bilateral trade framework, subject to specified conditions.

Nepal also relies heavily on transit routes through India for access to global trade.

The Raxaul-Birgunj corridor is one of the key routes used for Nepal's bilateral and third-country trade.

Why India-Nepal ties go beyond trade

The relationship extends beyond commerce and trade. “Roti-Beti ka Rishta” is a phrase often used by leaders on both sides to symbolise the deep family and marriage ties shared across communities.

India's External Affairs Minister S Jaishankar, during his meeting with Khanal in June 2026, described the relationship as being built on “vibrant people-to-people ties, cross-border connect and shared cultural and religious traditions.”

Siddhartha Gautama (Lord Buddha) was born in Lumbini, Nepal, but travelled across parts of India, later attaining enlightenment at Gaya, delivering his first sermon at Sarnath and dying at Kushinagar.

Millions travel between holy sites such as the Pashupatinath Temple in Kathmandu, the Janaki Temple in Janakpur and holy sites in India. Languages such as Nepali, Maithili, Bhojpuri, and Hindi are spoken on both sides of the border.

The 1950 Treaty of Peace and Friendship allows citizens to move freely without passports or visas across the 1,751-km open border shared with five Indian states.

Military ties are another longstanding component of the relationship. The tradition of Nepali Gorkha soldiers serving in the Indian Army and the practice of awarding reciprocal honorary General ranks to the army chiefs of the two countries are among the notable links.

How India-Nepal ties look under Kathmandu's new leadership

The focus on India comes amid renewed high-level engagement between Kathmandu and New Delhi after Nepal Prime Minister Balendra “Balen” Shah took charge in Kathmandu.

Rastriya Swatantra Party Chairman Rabi Lamichhane visited India in June this year, at the invitation of BJP national president Nitin Nabin. During the visit, he also met Prime Minister Narendra Modi.

PM “Balen” Shah has also accepted Modi's invitation to visit India. Nepali media reports have indicated that the visit could take place around November 2026 and would be Shah's first official bilateral foreign visit.

About the Author

Bhanu Pratap is a journalist who reports and writes on foreign affairs, India’s foreign policy, geopolitics and strategic affairs. He closely follows diplomatic developments in New Delhi and has a keen interest in defence and national security.<br> <br> Bhanu also focuses on in-depth, interview-based reports and regularly speaking with experts and policymakers to bring perspectives and context to major developments around the world.<br> <br> He is also interested in stories with strong humanitarian angles.<br><br> One such report examined the cases of Indian nationals who were allegedly recruited and forced into Russia’s war against Ukraine. While reporting the story, Bhanu spoke to the families of those affected and documented their experiences. The report was later taken into account by the United Nations in its findings on human rights violations linked to the war in Ukraine.<br> <br> For Bhanu, the zeal to produce meaningful and impactful journalism remains at the heart of his work.<br> <br>He has previously worked with Firstpost, NDTV, Newslaundry and Republic.<br><br> Bhanu studied at the Delhi School of Journalism, University of Delhi. He initially chose science with plans to pursue engineering, influenced by conventional expectations, but fate had other plans and eventually led him to journalism.<br><br> Beyond the newsroom, Bhanu enjoys exploring culture and history and often spends his days off on heritage walks. He is also passionate about travelling, biking and listening to folk music.<br> <br>For tips, reviews and suggestions, you can reach him at bhanu.pratap@htdigital.in.

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