Economic Cooperation

From the beginning, the core philosophy of India’s development assistance programme in Nepal is based on India’s belief that the welfare of the people of these two countries is interlinked. Guided by this philosophy, soon after independence in 1947, India strongly supported Nepal’s desire for transformation into a modern and welfare state. India, itself a developing country and with its limited resources, started contributing significantly towards the development infrastructure and human resources in Nepal, with the programme of cooperation launched in 1951. Some of the first projects which opened Nepal to the rest of the world were executed with the Indian assistance. For the first two Five Year Plans of Nepal, India was the only foreign country involved in Nepal's development.

The objective of this programme had been and remains to supplement the efforts of the Government of Nepal in Nepal’s national development.

To give a concrete shape to this vision of development cooperation, Government of India set up the Indian Aid Mission in Kathmandu in 1954, which was later renamed as the Indian Cooperation Mission (ICM) in 1966 and remained functional till the 1980s. The change in the nomenclature was to reflect the fact that India’s association with the economic development of Nepal was more in nature of cooperation than merely financial assistance. The ICM, with its more than 80 staff, devoted exclusively to implementing Indian-assisted mega development projects in Nepal. Later, the ICM was recast as the Economic Cooperation Wing of the Embassy of India, which continues to carry forward the development assistance to Nepal with the same zeal as under the ICM.