At the recently held Kantipur conclave, many speakers dwelt on various subjects, including Nepal’s foreign policy. There was a call to look beyond tradition and ‘abstract’ ideas, particularly concerning Nepal-India relations, suggesting that new ‘theorisation’ is required to free itself from old traditions and ‘abstract terms’. This would enable Nepal to relate itself to ‘economic and strategic domains’.

A speaker from India stated that even if India was concerned about Nepal’s engagements with China and the United States, given the sensitivity of the open border between the two countries, it was imperative for India to adopt ‘managed pragmatism’. Such an approach has been necessitated by ‘hydropower cooperation, trade connectivity and institutional arrangement’. Recognising the dominant players in the region, it was suggested that Nepal maintain a balanced policy.

A US scholar expressed that Nepal’s low priority in the US ‘strategic thinking could be advantageous’, adding that ‘current US administration appears more focused on short-term gains than broad international commitments, making it harder for smaller countries to sustain attraction’. Suggesting that Nepal be pragmatic in developing economic and transactional relations with the US, it is expected that Nepal would be in a better position to draw a clear demarcation line between China’s engagement through the Belt and Road Initiative (BRI) and India’s priorities.

Contrary to claims made at the conclave, Nepal-India relations are not based on abstractions and a lack of a theoretical framework. What obstructs the diversification of Nepal’s economic interests are its own geographical limitations and policy gaps. Nepal’s relations with its southern neighbour didn’t prevent it from adopting the policy of economic diversification pursued since the 1960s. It was primarily geared towards reducing economic dependence on India and towards adopting export-promotion and import-substitution policies. However, in the course of time, such a policy could not reduce Nepal’s trade deficit with India, as most of the foreign goods imported into Nepal were consumer goods that could hardly support economic development.

When the Indian market was closed to foreign goods, goods imported into Nepal from other countries were smuggled into India. Such ‘informal trade’, as is popularly known, significantly suffered following India’s liberalisation policy enforced since the early 1990s. As Nepal has not developed its own productive capacity, it cannot export indigenous products to India and beyond. Even today, a large portion of the trade deficit has been compensated for by edible oil imported from third countries and redirected to India as Nepali products.

Another issue raised in the Conclave was the ‘abstract’ policy of Nepal vis-à-vis India. India-Nepal relations are based on both a structured framework and practicalities, given the situation and context to which one of the speakers referred to as ‘managed pragmatism’. Since the time of the Sugauli treaty and beyond, particularly since the 1923 treaty, to which the government of independent India, led by Nehru and the Rana government headed by Mohan Shamsher, had reinforced it with greater details in 1950. Such bilateral arrangements covering as many areas as possible, including people-to-people relations and their concerns, continue as of now.

No government in Nepal has yet proposed an alternative framework for Nepal-India relations. Nevertheless, Nepali politicians have informally tried to raise the issue of revising the treaty, to which India is unwilling to comply. Whoever comes to power in India would not like to change the status of bilateral relations, maintaining that it is relevant to the wide-ranging relations that have existed since time immemorial. Once, it was agreed to review the entire gamut of bilateral relations, but the Narendra Modi government subsequently retracted its earlier position on the report of the Eminent Persons Group (EPG) that consisted of eight members (four from each country).

Now the issue of the 1950 treaty has subsided, if not died down, as Nepal’s focus has shifted to managing internal political dynamics and understanding the limitations of foreign policy that need to be calibrated to be able to safeguard the country’s vital interests. Nepali rulers’ traditional strategies of survival do not always work, as they should be related to emerging regional and global realities. Sometimes, small countries like Nepal were vociferous in raising certain issues that were not palatable to their neighbours and others. A limited degree of strategic autonomy, without affecting the traditional relations (with India), was used by Nepal due to the changed regional and global context. Such a conventional approach, if adopted today, would simply provoke neighbours.

In the disorderly world context, Nepal should tread cautiously. The emerging world political scenario demonstrates that no countries, including the five permanent members of the UN Security Council, feel secure and are seemingly either scrambling to court Trump’s favour or trying to redefine and revamp their own relations with the US and the world. Yet, many of such so-called powerful countries, let alone smaller ones, seemed to suffer from a kind of paranoia. Under the circumstances, Nepal should not attempt to be cosy to any power. The US, in particular, has no priority for Nepal except the China factor. If Nepali rulers fail to be cautious of maintaining quiet relations with neighbours and others, the American backlash is imminent. The new art of survival therefore needs to be cultivated, focusing more on internal development along with a conciliatory role in maintaining relations with neighbours.

Issues that were settled long ago should not be blown up in order to project oneself as a ‘nationalist’. Relations with neighbours on the basis of trust and objectivity need to be properly calibrated, as other countries would not come to the rescue in a crisis. Moreover, it is superfluous to expand and extend when the country’s internal conditions worsen. It happened in the wake of a two-day Gen Z uprising when the entire machinery of the state had almost collapsed. No security agencies, including the much-touted role of the army, intervened until substantial damage had been done.

Nevertheless, the Nepali state survived because of the good sense that prevailed among all stakeholders in salvaging the country and the republic. Taking the Gen Z uprising as a lesson for future governance, the new leaders of Nepal should comprehend the new realities of both national and international politics.