Nepal FM Khanal Calls India Ties 'Excellent', Flags Two-Thirds Trade Dependence

Nepal's Foreign Minister Shisir Khanal has characterised his country's relationship with India as "excellent" and "multidimensional", pointing to deep trade, connectivity and cultural links between the two neighbours.

Speaking at an Asia Society event in New York, Khanal said roughly two-thirds of Nepal's trade is conducted with India, and that access to ports and other external routes largely runs through Indian territory. He added that cultural and social bonds between the two countries remain strong.

The minister acknowledged that political ties between the two sides can see periods of "ebb and flow", but said the relationship is currently in one of its better phases.

Trade and transit at the core

India is Nepal's largest trading partner and its principal gateway to international markets, a critical arrangement for the landlocked country. Indian figures indicate that trade with India accounts for about two-thirds of Nepal's total merchandise trade, and that India absorbed 81.1 per cent of Nepal's exports in the 2024-25 financial year.

Indian firms rank among the leading investors in Nepal, while Nepali-made goods enter the Indian market duty-free under the existing bilateral trade framework, subject to certain conditions. The Raxaul-Birgunj corridor remains one of the main routes handling Nepal's bilateral and third-country trade.

Beyond commerce

Leaders on both sides often invoke the phrase "Roti-Beti ka Rishta" to describe the family and marriage ties that span communities across the border. External Affairs Minister S Jaishankar, after meeting Khanal in June 2026, said the relationship rests on vibrant people-to-people links, cross-border connectivity and shared cultural and religious traditions.

The shared heritage includes Lumbini, the birthplace of Siddhartha Gautama, and sites associated with his life across India, including Gaya, Sarnath and Kushinagar. Pilgrims travel in large numbers between the Pashupatinath Temple in Kathmandu, the Janaki Temple in Janakpur and holy sites in India, while languages such as Nepali, Maithili, Bhojpuri and Hindi are spoken on both sides.

The 1950 Treaty of Peace and Friendship permits citizens to cross the 1,751-km open border with five Indian states without passports or visas. Longstanding military links include the tradition of Nepali Gorkha soldiers serving in the Indian Army and the reciprocal award of honorary General ranks to the two countries' army chiefs.

Renewed engagement

Khanal's remarks come amid fresh high-level exchanges between Kathmandu and New Delhi following the installation of Balendra "Balen" Shah as Nepal's Prime Minister. Rastriya Swatantra Party chairman Rabi Lamichhane travelled to India in June at the invitation of BJP national president Nitin Nabin and met Prime Minister Narendra Modi during the visit.

Shah has accepted an invitation from Modi to visit India, with Nepali media reports suggesting the trip could take place around November 2026. If it goes ahead, it would be Shah's first official bilateral foreign visit.