Politics and Perceptions of Indian Aid to Nepal

Monalisa Adhikari is Visiting Fellow at the Institute for Defence Studies and Analyses (IDSA), New Delhi.
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  • May 2014

    India has significantly invested in Nepal’s development through economic assistance since 1952. Despite deploying aid to win the hearts and minds of the people of Nepal, India has not entirely succeeded in doing so. Paradoxically, an analysis of Indian aid and gaps in the planning, processes, modalities and perceptions of India’s motivation shows that it has possibly contributed to the fuelling of anti-India sentiments among the Nepalese population. Although Indian aid has not been refused, it has been resisted, and sceptical nationalist sentiments dominate perceptions of Indian aid in Nepal. Why is India not perceived as a major donor despite providing significant aid? Why do vested political and economic interests mar the public perception of Indian aid to Nepal? This article is an attempt to reconstruct the history of India’s developmental aid to Nepal, outline the trends, shifting priorities and modalities as well offering a critical analysis of the perceptions of Indian aid. The article is limited to development aid and excludes military aid and investments.