A peace pact that put ties under strain

Nepal is taking its first steps towards a republican democracy. In doing so, it is breaking with the past and seeking a new policy architecture for reforming its economy, internal governance, relations with neighbours and restructuring its armed forces. Business Standard takes a look at the march of a new Nepal.

Of the ten Articles in the 1950 Treaty of Peace and Friendship between India and Nepal, the five that are functional relate to political, security, economic and people-to-people relations.

Citizens of Nepal have the privilege of living, working, trading and owning property in India. This facility is not available to Indians on a reciprocal basis.

However, the treaty is amplified by a letter finalised in 1965 when India had just lost a war to China.

This requires consultation between the two countries if they are faced with a foreign aggressor. So that Nepal would never become India's adversary, it was supposed to import arms and warlike material with the "assistance" and "agreement" of India. Shortfalls, if any, were to be met by the UK and the US.

The 1950 treaty and letters have always been a subject of controversy in Nepal. But in 1988-89, King Birendra, having mooted that the Indian Ocean should be a "Zone of Peace" (1975), proceeded to buy arms from China without informing New Delhi.

Till today, Nepalese diplomats say there were no arms on the trucks that rolled down from the northern Kodari highway bordering China into Nepal in the dead of night.

What is more, no Indian territory was involved in the purchase, even assuming such a thing happened. Therefore, there was no breach of the letter, they say. All that the letter did