India vs. Nepal

The Indus Valley civilization, one of the world's oldest, flourished during the 3rd and 2nd millennia B.C. and extended into northwestern India. Aryan tribes from the northwest infiltrated the Indian subcontinent about 1500 B.C.; their merger with the earlier Dravidian inhabitants created the classical Indian culture. The Maurya Empire of the 4th and 3rd centuries B.C. - which reached its zenith under ASHOKA - united much of South Asia. The Golden Age ushered in by the Gupta dynasty (4th to 6th centuries A.D.) saw a flowering of Indian science, art, and culture. Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established the Delhi Sultanate. In the early 16th century, the Emperor BABUR established the Mughal Dynasty, which ruled India for more than three centuries. European explorers began establishing footholds in India during the 16th century.

By the 19th century, Great Britain had become the dominant political power on the subcontinent and India was seen as the "Jewel in the Crown" of the British Empire. The British Indian Army played a vital role in both World Wars. Years of nonviolent resistance to British rule, led by Mohandas GANDHI and Jawaharlal NEHRU, eventually resulted in Indian independence in 1947. Large-scale communal violence took place before and after the subcontinent partition into two separate states - India and Pakistan. The neighboring countries have fought three wars since independence, the last of which was in 1971 and resulted in East Pakistan becoming the separate nation of Bangladesh. India's nuclear weapons tests in 1998 emboldened Pakistan to conduct its own tests that same year. In November 2008, terrorists originating from Pakistan conducted a series of coordinated attacks in Mumbai, India's financial capital. India's economic growth following the launch of economic reforms in 1991, a massive youthful population, and a strategic geographic location have contributed to India's emergence as a regional and global power. However, India still faces pressing problems such as environmental degradation, extensive poverty, and widespread corruption, and its restrictive business climate is dampening economic growth expectations.

During the late 18th-early 19th centuries, the principality of Gorkha united many of the other principalities and states of the sub-Himalayan region into a Nepali Kingdom. Nepal retained its independence following the Anglo-Nepalese War of 1814-16 and the subsequent peace treaty laid the foundations for two centuries of amicable relations between Britain and Nepal. (The Brigade of Gurkhas continues to serve in the British Army to the present day.) In 1951, the Nepali monarch ended the century-old system of rule by hereditary premiers and instituted a cabinet system that brought political parties into the government. That arrangement lasted until 1960, when political parties were again banned, but was reinstated in 1990 with the establishment of a multiparty democracy within the framework of a constitutional monarchy.

An insurgency led by Maoists broke out in 1996. During the ensuing 10-year civil war between Maoist and government forces, the monarchy dissolved the cabinet and parliament and re-assumed absolute power in 2002, after the crown prince massacred the royal family in 2001. A peace accord in 2006 led to the promulgation of an interim constitution in 2007. Following a nationwide Constituent Assembly (CA) election in 2008, the newly formed CA declared Nepal a federal democratic republic, abolished the monarchy, and elected the country's first president. After the CA failed to draft a constitution by a 2012 deadline set by the Supreme Court, then-Prime Minister Baburam BHATTARAI dissolved the CA. Months of negotiations ensued until 2013 when the major political parties agreed to create an interim government headed by then-Chief Justice Khil Raj REGMI with a mandate to hold elections for a new CA. Elections were held in 2013, in which the Nepali Congress (NC) won the largest share of seats in the CA and in 2014 formed a coalition government with the second-place Communist Party of Nepal-Unified Marxist-Leninist (UML) with NC President Sushil KOIRALA serving as prime minister. Nepal's new constitution came into effect in 2015, at which point the CA became the Parliament. Khagda Prasad Sharma OLI served as the first post-constitution prime minister from 2015 to 2016. OLI resigned ahead of a no-confidence motion against him, and Parliament elected Communist Party of Nepal-Maoist (CPN-M) leader Pushpa Kamal DAHAL (aka "Prachanda") prime minister. The constitution provided for a transitional period during which three sets of elections - local, provincial, and national - needed to take place. The first local elections in 20 years occurred in three phases between May and September 2017, and state and federal elections proceeded in two phases in November and December 2017. The parties headed by OLI and DAHAL ran in coalition and swept the parliamentary elections, and OLI, who led the larger of the two parties, was sworn in as prime minister in February 2018. In May 2018, OLI and DAHAL announced the merger of their parties - the UML and CPN-M - to establish the Nepal Communist Party (NCP), which is now the ruling party in Parliament.

droughts; flash floods, as well as widespread and destructive flooding from monsoonal rains; severe thunderstorms; earthquakes

volcanism: Barren Island (354 m) in the Andaman Sea has been active in recent years

the Election Commission of Nepal granted ballot access under the proportional system to 88 political parties for the November-December 2017 House of Representatives election to the Federal Parliament; of these, the following 8 parties won seats:
Federal Socialist Forum, Nepal or FSFN [Upendra YADAV]
Naya Shakti Party, Nepal [Baburam BHATTARAI]
Nepal Communist Party or NCP [Khadga Prasad OLI, Pushpa Kamal DAHAL]
Nepali Congress or NC [Sher Bahadur DEUBA]
Nepal Mazdoor Kisan Party [Narayan Man BIJUKCHHE]
Rastriya Janamorcha [Chitra Bahadur K.C.]
Rastriya Janata Party or RJPN [Mahanta THAKUR]
Rastriya Prajatantra party or RPP [Kamal THAPA]

India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the workforce is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India's output but employing less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. Nevertheless, per capita income remains below the world average. India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged nearly 7% per year from 1997 to 2017.

India's economic growth slowed in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about slow world growth. Investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee. Growth rebounded in 2014 through 2016. Despite a high growth rate compared to the rest of the world, India's government-owned banks faced mounting bad debt, resulting in low credit growth. Rising macroeconomic imbalances in India and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee through 2016.

The economy slowed again in 2017, due to shocks of "demonetizaton" in 2016 and introduction of GST in 2017. Since the election, the government has passed an important goods and services tax bill and raised foreign direct investment caps in some sectors, but most economic reforms have focused on administrative and governance changes, largely because the ruling party remains a minority in India's upper house of Parliament, which must approve most bills.

India has a young population and corresponding low dependency ratio, healthy savings and investment rates, and is increasing integration into the global economy. However, long-term challenges remain significant, including: India's discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration.

Nepal is among the least developed countries in the world, with about one-quarter of its population living below the poverty line. Nepal is heavily dependent on remittances, which amount to as much as 30% of GDP. Agriculture is the mainstay of the economy, providing a livelihood for almost two-thirds of the population but accounting for less than a third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain.

Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of commercially feasible capacity. Nepal has signed trade and investment agreements with India, China, and other countries, but political uncertainty and a difficult business climate have hampered foreign investment. The United States and Nepal signed a $500 million Millennium Challenge Corporation Compact in September 2017 which will expand Nepal's electricity infrastructure and help maintain transportation infrastructure.

Massive earthquakes struck Nepal in early 2015, which damaged or destroyed infrastructure and homes and set back economic development. Although political gridlock and lack of capacity have hindered post-earthquake recovery, government-led reconstruction efforts have progressively picked up speed, although many hard hit areas still have seen little assistance. Additional challenges to Nepal's growth include its landlocked geographic location, inconsistent electricity supply, and underdeveloped transportation infrastructure.

poverty, inconsistent electricity, and mountainous topography stymie development of telecom infrastructure; mobile market is developed and has been extended to all districts covering 90% of Nepal; fixed broadband is low due to limited number of fixed-lines and preeminence of the mobile platform; increasing 3G and 4G subscribers; fiber-optic networks developing under private and public funding to meet demand for Internet; government supports digital society, whereby 90% of the population will have access to broadband and free Internet access for students; plans to launch a Nepalese satellite by 2022; importer of broadcasting equipment from China (2021)

since China and India launched a security and foreign policy dialogue in 2005, consolidated discussions related to the dispute over most of their rugged, militarized boundary, regional nuclear proliferation, Indian claims that China transferred missiles to Pakistan, and other matters continue; Kashmir remains the site of the world's largest and most militarized territorial dispute with portions under the de facto administration of China (Aksai Chin), India (Jammu and Kashmir), and Pakistan (Azad Kashmir and Northern Areas); India and Pakistan resumed bilateral dialogue in February 2011 after a two-year hiatus, have maintained the 2003 cease-fire in Kashmir, and continue to have disputes over water sharing of the Indus River and its tributaries; UN Military Observer Group in India and Pakistan has maintained a small group of peacekeepers since 1949; India does not recognize Pakistan's ceding historic Kashmir lands to China in 1964; to defuse tensions and prepare for discussions on a maritime boundary, India and Pakistan seek technical resolution of the disputed boundary in Sir Creek estuary at the mouth of the Rann of Kutch in the Arabian Sea; Pakistani maps continue to show its Junagadh claim in Indian Gujarat State; Prime Minister Singh's September 2011 visit to Bangladesh resulted in the signing of a Protocol to the 1974 Land Boundary Agreement between India and Bangladesh, which had called for the settlement of longstanding boundary disputes over undemarcated areas and the exchange of territorial enclaves, but which had never been implemented; Bangladesh referred its maritime boundary claims with Burma and India to the International Tribunal on the Law of the Sea; Joint Border Committee with Nepal continues to examine contested boundary sections, including the 400 sq km dispute over the source of the Kalapani River; India maintains a strict border regime to keep out Maoist insurgents and control illegal cross-border activities from Nepal

joint border commission continues to work on contested sections of boundary with India, including the 400 sq km dispute over the source of the Kalapani River; India has instituted a stricter border regime to restrict transit of illegal cross-border activities