India and Nepal on Saturday held comprehensive discussions to further strengthen their bilateral relationship, with a focus on development cooperation, connectivity, energy partnership, and cross-border trade, during the official visit of Nepal’s Foreign Minister Shisir Khanal.
The talks, held between External Affairs Minister S. Jaishankar and his Nepalese counterpart, marked the highest-level engagement from Nepal’s new government under Prime Minister Balendra ‘Balen’ Shah since it assumed office in March 2026 .
A ‘transformative’ partnership
The discussions were described by both sides as “productive, candid, and outcome-oriented” . Jaishankar reiterated India’s commitment to its ‘Neighbourhood First’ policy, emphasizing that there is an opportunity today to “decisively shift the trajectory of India-Nepal relations” .
Nepal Foreign Minister Khanal struck a conciliatory note, stating that Nepal does not carry any “old baggage” against India and is determined to build a genuinely transformative relationship with its “close neighbor and most important partner” .
“Nepal has placed the highest priority on its relationship with India. Under the new government, we are ready to engage substantively, purposefully, and at the highest possible levels,” Khanal said, thanking India for fuel and fertilizer supplies during the recent West Asia crisis .
Key outcomes of the talks
1. UPI-NPI cross-border payments launched
Both ministers jointly launched the Peer-to-Peer (P2P) linkage between India’s Unified Payments Interface (UPI) and Nepal’s National Payments Interface (NPI) . This will facilitate cross-border personal remittances, making financial transactions faster and cheaper for people on both sides.
2. Handover of 84 reconstruction projects
Jaishankar virtually handed over 72 health facilities and 12 cultural heritage projects to Nepal, completed under India’s post-2015 Earthquake Reconstruction Assistance .
3. Mutual Legal Assistance Treaty (MLAA)
Both sides welcomed the completion of internal processes for the entry into force of the India-Nepal Mutual Legal Assistance Agreement in Criminal Matters . This will provide an institutional framework to combat cross-border crimes, including human trafficking and economic offenses.
4. Voice-first language translation platform
An MoU was exchanged between Digital India Bhashini and Kathmandu University for co-creating a National Digital Infrastructure for a ‘Voice First’ Language Translation platform for Nepal .
5. Start-up and innovation collaboration
The second cohort of the India-Nepal Startup Partnership Network (IN-SPAN) is currently underway at IIT Madras, with 25 Nepali startups undergoing an 8-week fully-funded training programme .
Border issue remains on the agenda
While the official press releases focused on developmental cooperation, diplomatic sources confirmed that the two sides did discuss ongoing work on the boundary by joint field survey teams . They agreed to an early meeting of the existing mechanism on border management, committing to resolve issues “in the spirit of understanding and friendship.”
This discussion comes just days after Prime Minister Balendra Shah’s first parliament speech, in which he remarked that both India and Nepal had encroached upon each other’s territory . Nepal’s Foreign Ministry later clarified that Shah was referring to cross-border occupation due to missing boundary pillars rather than state-sponsored territorial claims.
What lies ahead
Khanal also met National Security Advisor Ajit Doval during his visit, discussing ways to advance cooperation in connectivity, energy, and tourism .
The visit sets the stage for forthcoming high-level exchanges, including a potential visit by Prime Minister Shah to India. Prime Minister Narendra Modi had earlier extended an invitation to Shah, and both sides are working diplomatically to schedule the visit .
Nepal remains a priority partner under India’s ‘Neighbourhood First’ policy, and with a new government in Kathmandu, both sides appear committed to elevating the special and multifaceted relationship to greater heights .
