Nepal to Raise Aid, Air Routes and Border Disputes During Balen Shah’s India Visit

IANS

Updated –

17 October 2026

5 minutes

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Nepal prepares a massive financial assistance pitch for India during PM Balen Shah's planned New Delhi visit, focusing on flood reconstruction.

Photo: IANS

Kathmandu: Nepal is seeking a large-scale assistance package from India during the planned visit of Prime Minister Balendra Shah to New Delhi, likely in late November, a senior official at Nepal’s Ministry of Foreign Affairs said.

Nepal and India have yet to officially announce the date of the visit, but officials at the Prime Minister’s Office and the Foreign Ministry said Shah is likely to travel to New Delhi on November 22 or 23.

“The Prime Minister is likely to visit India in the final days of November,” Dipa Dahal, the Prime Minister’s press advisor, told IANS. “How many days he will spend in India is yet to be confirmed.”

The Foreign Ministry has yet to propose a specific date to the Indian side for the visit.

After Shah was sworn in as Nepal’s Prime Minister on March 27, following the March 5 parliamentary elections, India invited him to visit New Delhi. Shah’s only trip abroad so far was to New York in September to attend the 81st session of the United Nations General Assembly.

His proposed visit to New Delhi comes at a time when Nepal is grappling with the crisis triggered by the devastating floods of August 26, which killed nearly 1,500 people, while more than 5,000 remain unaccounted for, according to the National Disaster Risk Reduction and Management Authority.

The floods in the Bhote Koshi and Trishuli rivers swept away communities, hydropower plants, roads and bridges, causing billions of dollars in physical damage and creating a massive need for reconstruction funding.

“Although the resources needed for reconstruction are enormous, we had been seeking a large-scale assistance package from India even before the floods struck the country,” the Foreign Ministry official said, without specifying the amount Nepal was seeking.

The official said the Nepali government wanted assistance with fewer conditions attached to ensure smooth implementation and visible results within a short period.

Besides the regular grants India provides to Nepal through its budgetary allocations, Nepal has been using substantial resources from India’s lines of credit, including for post-earthquake reconstruction following the 2015 earthquake, when India pledged US$1 billion.

Four lines of credit (LOCs), amounting to US$100 million, US$250 million, US$550 million and US$750 million, total US$1.65 billion and are currently being utilised in Nepal, according to the Indian Embassy’s website.

These LOCs are dedicated to infrastructure development projects prioritised by the Government of Nepal, it said.

Credit provided through the Export-Import Bank of India requires a certain percentage of the components to originate in India.

The Foreign Ministry official said Nepal would seek not only a substantial financial package but also progress on longstanding border disputes and tangible outcomes in energy, trade and transit, and air services.

The border dispute, particularly over the territories of Lipulekh, Kalapani and Limpiyadhura, remains a source of friction in bilateral relations. Nepal claims the territory, which is an integral part of India’s Uttarakhand.

Nepal is also seeking additional air-entry routes through Indian airspace, as around 90 per cent of international flights currently enter Nepal through a single, congested entry point over Simara in southern Nepal.

It has been about a decade since Nepal first sought additional air routes, which are considered crucial for the operation of its two newer international airports in Pokhara in western Nepal and Bhairahawa in the southwest.

India has been reluctant to grant direct, low-altitude entry routes through Nepal’s western and eastern corridors, citing security concerns arising from sensitive military installations, including the Gorakhpur air base, as well as complexities in air traffic management.

Nepal has proposed three new entry points through Janakpur, Bhairahawa and Nepalgunj.

According to the official, Nepal is also seeking an early review of the Nepal-India Trade Treaty, which was automatically renewed in 2023. Under the treaty, it is automatically renewed every seven years unless either side registers a reservation.

Specific articles, protocols or provisions can still be amended or modified at any time through mutual consent or letters of exchange.

Nepal also wants India to address non-tariff barriers arising from its requirement that Nepali exporters obtain certification from the Bureau of Indian Standards (BIS) to export certain goods to India.

Procedural delays resulting from this requirement have been a major concern for Nepali exporters of cement, steel, plywood, footwear, sanitary pads, diapers and electrical wires.

During the visit, the two sides are also expected to inaugurate several development projects built with Indian assistance, including the Nepal Police Academy in the Panauti area of central Kavrepalanchok district, a bridge in Darchula, the integrated check post in Bhairahawa and a motorable bridge over the Mahakali River, officials said.

Earlier, The Kathmandu Post reported that the two prime ministers are also expected to jointly mark the start of construction on the integrated check post in Dodhara Chandani, the Lower Arun hydropower project and a petroleum pipeline extending from Siliguri in India to Jhapa in Nepal.

According to the report, Nepal is also considering placing several major hydropower projects on the agenda, as most bilateral mechanisms have already completed their meetings. These include the 750-MW West Seti, the 480-MW Phukot Karnali and the 450-MW Seti River-6 projects.

India’s state-owned NHPC is involved in all three. Because of a Supreme Court verdict that required the Indian company to provide at least 21.9 per cent free energy to Nepal, the development of the 480-MW Phukot Karnali project has been uncertain, according to officials of Nepal’s Ministry of Energy, Water Resources and Irrigation.

Other issues expected to be discussed include a project on the Koshi River, the Ayodhya-Janakpur railway and Indian support for Nepal’s ambitions in artificial intelligence, the report said.

Nepal is also seeking Indian grants and concessional loans for reconstruction and recovery following the August 26 floods in the Bhote Koshi region. Nepal’s Finance Minister Swarnim Wagle has already visited India and discussed possible assistance for post-flood reconstruction.