[citation needed] Rana rule in Nepal however collapsed within three months of signing the 1950 Indo-Nepal Treaty of Peace and Friendship, to be replaced by the only pro-Indian party of the time – Nepali Congress.

[3] The Treaty of Trade and Commerce between the two countries was ratified in October 1950, wherein India acknowledged Nepal's right to import and export commodities through the Indian territories and ports.

India suspended its support to India-based Nepalese opposition forces, opposing the dissolution of democratic government by King Mahendra.

In exchange, through a secret accord concluded in 1965, similar to an arrangement that had been suspended in 1963, India won a monopoly on arms sales to Nepal.

[4][5] Tensions further increased in the mid-1970s, when Nepal pressed for substantial changes in the trade and transit treaty and openly denounced Sikkim's 1975 annexation by India.

Nepal continually promoted the proposal in international forums and by 1990 it had won the support of 112 countries including the US, the UK, and France.

Nepalese leaders asserted the position that as per the UN charter, transit privileges were "a fundamental and a permanent right of a land-locked country" and thus India's demand for a single treaty was unacceptable.

[7] After two extensions, the two treaties expired on 23 March 1989, resulting in a virtual Indian economic blockade of Nepal that lasted until late April 1990.

For example, preferential customs and transit duties on Nepalese goods entering or passing through India (whether imports or exports) were discontinued.

Thereafter India let agreements relating to oil processing and warehouse space in Calcutta for goods destined for Nepal expire.

[3] To withstand the renewed pressure from India, Nepal undertook a major diplomatic initiative and presented its case on trade and transit matters to the world community.

India retaliated by denying port facilities in Calcutta to Nepal, thereby preventing delivery of oil supplies from Singapore and other source countries.

Shortly after the imposition of sanctions, Nepal experienced serious deficiencies of important goods such as coal, fuel, oil, medicine and spare parts.

After failing to receive support from wider international community, Nepalese government backed down from its position to avoid the worsening economic conditions.

Indian government, with the help of Nepalese opposition parties operating from India, managed to bring a change in Nepal's political system, in which the king was forced to institute a parliamentary democracy.

[10] In the face of benign statements by his Indian hosts relating to the treaty, Adhikary sought greater economic independence for his landlocked nation while simultaneously striving to improve ties with China.

The two issued a 22-point statement highlighting the need to review, adjust and update the 1950 Treaty of Peace and Friendship, amongst other agreements.

[29] The decision of the Nepal Culture Ministry to change the theme, "Preservation and Development of Buddhist Heritage of Nepal" with the sub-theme "Lumbini – Birthplace of Buddha" under the name "Lumbini – Fountainhead of Buddhism" was met with criticism from India which subsequently boycotted the conference due to this and on the back of China's supposed monetary involvement in the conference.

Indian troops had previously prevented a group of Nepalese farmers living along the border from completing a culvert in the disputed area which ultimately led to protests.

[36][37] After years of dissatisfaction by the Nepalese government, India in 2014, agreed to revise and adjust the 1950 Indo-Nepal Treaty of Peace and Friendship to reflect the current realities.

In the same year the Indian Aid Mission in Nepal was also set up for developing projects in a number of areas including health, connectivity, education, power, and government departments.

In 2014, the Nepal Bharat Maitri Emergency & Trauma Centre in Kathmandu at a cost of Rs 100 crore, and a new college block of B.P.

[44] Nepal and India have long-standing military ties and since 1950 have a custom of awarding the honorary rank of General to each other's Army Chiefs.

Other facets of India's defence cooperation with Nepal include assistance during disasters, joint military exercises, adventure activities, and bilateral visits.

This discrepancy in locating the source of the river led to boundary disputes between India and Nepal, with each country producing maps supporting their own claims.

In 2015, the Nepalese parliament objected an agreement between India and China to trade through Lipulekh Pass, a mountainous pass in the disputed Kalapani area, stating that the agreement between India and China to trade through Kalapani violates Nepal's sovereign rights over the territory.

India, on the other hand, awaited Nepal's ratification while at the same time urging it to endorse the maps as a confidence building measure for solving the Kalapani and Susta disputes.

[51] In 2020, the relation between the two countries came under strain after the inauguration of a 80 km long road which connected the Lipulekh pass with Dharchula in Uttarakhand.

Nepal's export basket to India mainly comprises jute goods (9.2%), zinc sheet (8.9%), textiles (8.6%), threads (7.7%), polyester yarn (6%), juice (5.4%), catechue (4.4%), Cardamom (4.4%), wire (3.7%), tooth paste (2.2%) and M. S. Pipe (2.1%).

[77] The seriousness of trafficking of Nepalese girls to India was highlighted by CNN Freedom Project's documentary: Nepal's Stolen Children.