Mapping trust: Nepal's currency gambit and the quiet path to Indo-Nepali renewal

Nepal recently unveiled new 100-rupee denomination banknotes featuring a revised map that includes the disputed Kalapani, Lipulekh and Limpiyadhura territories, claimed by Nepal and India. The new 100-rupee note is printed by the China Banknote Printing and Minting Corporation. This move has reignited border disputes with India.

Nepal and India share a 1,850-kilometer border, with Nepal adjoining India's Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.

Nepal's map issue is an opportunity to resolve the issue through dialogue and diplomacy. Through quiet diplomacy, India and Nepal can rebuild eroded trust, invigorate bilateral trade, and marginalize China's surging influence in the Himalayan nation.

This border dispute between Nepal and India dates to the 1816 Treaty of Sugauli. Nepal maintains that Lipulekh — including Kalapani and Limpiyadhura — belongs to it under the treaty with the British East India Company, which set the Kali River as Nepal's western boundary with India and declared land east of the river as Nepalese territory.

India claims that Kalapani, Lipulekh and Limpiyadhura belong to it. India claims that it has conducted trade with China via the Lipulekh Pass since 1954.

Nepal protested when India inaugurated its 80-kilometer Lipulekh road to Kailash Mansarovar in 2020, built through disputed territory at a strategic three-way junction with Tibet and China.

India and Nepal should pursue constructive dialogue on outstanding boundary issues, grounded in historical facts. Backchannel talks — where envoys revisit key documents, potentially with neutral historians —could clarify disputes over the Kali River's course.

The Nepalese government should intensify diplomatic efforts with India and China to resolve this issue. A joint boundary commission, revived with genuine intent, could treat Nepal as an equal partner.

New Delhi should invest in people-to-people diplomacy to build goodwill. It could assist Nepal with upcoming elections following the Gen Z protests, boost morale among Indian private investors in the Himalayan nation, and lead by example in international forums by advocating fair dispute resolution under international law.

India could invest in Nepal's tourism sector while Nepal prioritizes Indian firms for sustainable hydropower, reducing its reliance on Chinese influence.

Of course, nationalists in both capitals decry compromise as weakness, while China's economic allure remains potent for landlocked Nepal seeking alternatives to Indian ports.

Still, let this currency note spark dialogue rather than ignite conflict. Policymakers in Delhi and Kathmandu should engage through diplomacy, knowing that while borders can be fluid, rebuilt trust endures.

Brabim Karki is a businessman and writer based in Nepal.