View from the Himalayas | Why Nepal’s new currency note has reignited discourse over border disputes
The border dispute over Kalapani is rooted in competing interpretations of maps and ground evidence.
A raft of positive developments has recently bolstered bilateral ties between Nepal and India. However, despite much progress in bilateral relations, the Kalapani border dispute remains a thorny issue. This dispute was brought into the spotlight recently after the Nepal government announced last week that the new 100-rupee note would bear a map which includes the disputed border territory in its strategic northwest trijunction between the two countries and China. The currency note also shows the controversial territories of Lipulekh, Limpiyadhura and Kalapani, which Nepal has long claimed as its territories that were illegitimately occupied by India after the 1962 border war with China.

New Delhi, meanwhile, has taken exception to Nepal’s decision. Responding to the Pushpa Kamal Dahal government’s move last week, external affairs minister S Jaishankar reiterated the Indian position on the Kalapani border issue, saying, “...they unilaterally took some measures on their side. But by doing something on their side, they are not going to change the situation between us or the reality on the ground.”
The origins of the Kalapani dispute
The dispute over the Kalapani area, however, is not a recent one. It has a long and complicated history. The key disagreement between the two sides is the headwaters of the Kali River. The dominant political view in Nepal is that the river, which flows to the west of the disputed region, is the main Kali River, and because the Kali or Mahakali forms the demarcation line between the countries, the territory east of the river belongs to Nepal. New Delhi, meanwhile, holds that the Kali originates from a smaller rivulet, Pankhagad, on the southern part of the disputed region and that the ridge on the eastern part of the area is the border. According to this school of thought, this makes the disputed territory India’s.
The dispute originates in the eighteenth century, when the then Gorkha Kingdom expanded aggressively both to the east and the west, particularly under its King Prithvi Narayan Shah. At its height, the Gorkha empire (the current-day Nepal) extended up to the Teesta River in the east (which includes current-day Sikkim and Darjeeling) and in the west to Kumaon and Garhwal. However, after the war between the Kingdom of Nepal and the British forces of the East India Company, Nepal ceded vast swathes of its territory. The Gorkha War, or the Anglo-Nepalese War ended with the signing of the Sugauli Treaty in 1816. To the west, the Mahakali River was designated as the line of border demarcation with India and to the east, it was the Mechi River.
In May 2020, Nepal released its new political map for the first time since the Sugauli Treaty.
In an explainer by the Observer Research Foundation published in May last year, Sohini Nayak suggests that Kalapani was regarded as a “safe zone” for Indian troops to be stationed, as its high altitude of 20,276 feet was “effective defence against the Chinese” and China recognised Kalapani as India’s during the 1962 war between the two countries. Nepal, however, had conducted elections in the area in 1959 and collected land revenue from its residents, until 1961, the article adds. Hence, the contradictory readings of Kalapani.
Analysts in Kathmandu say that after India’s defeat in the border war with China in 1962, King Mahendra allowed India to establish a ‘check post’ in Kalapani. In an article for the People’s Review Shahi Malla argues, “Subsequent Nepalese governments failed to request India to vacate the check post, nor did they undertake any action to again take physical control of the area.” Thus, India came to consider Kalapani its own and continued its presence there. Its location had obvious geo-strategic implications because of its proximity to the sensitive Indo-Chinese border.
New currency note fuels political rumours in Nepal
The current development comes on the heels of the government reshuffle in Kathmandu, on the one hand, and, on the other, at a time of general elections in India where Prime Minister Modi seeks a third term. In early March, Maoist Prime Minister Dahal evicted the centrist Nepali Congress (NC), the largest party in Parliament, from his government, replacing it with a fellow communist party, the Communist Party of Nepal-Unified Marxist Leninist, or the CPN-UML, the second-largest party. CPN-UML last week won both seats up for grabs in by-elections — one in the federal parliament and the other in the Sudurpaschim state assembly.
To put things in context, the new political map has enjoyed broad support in Nepal. In June 2020, after the map was released showing the disputed territories, it was endorsed by an overwhelming majority in Parliament: the constitutional amendment bill redrawing the national boundary received 258 votes in the 275-member lower house. And no one voted against the bill.
From Jaishankar’s comments, it isn’t immediately clear whether the term “unilaterally” refers to the Nepali Parliament’s 2020 move, the latest one by the Dahal government, or both. The amendment bill in 2020 was tabled by the government of Khadga Prasad Oli, the current chairman of the CPN-UML, the Maoist party’s largest coalition partner.
The current turn of events has fuelled a new round of political rumours and speculations in Kathmandu that a new kind of ruling coalition is just around the corner: First, the NC is set to rejoin the Dahal government, replacing CPN-UML and restoring the status quo ante; second, the NC and CPN-UML, two largest parties, will join hands for long-term political stability until the next election in three and a half years, instead of allowing PM Dahal, with a much smaller Communist Party of Nepal (Maoist), to overplay his political card. Many also believe that “external players” are again very active in the powerplay, with the Chinese side rooting for the continuity of the Maoist-UML combine, while New Delhi is hard-pressed to see the Nepali Congress make a comeback in the government.
Nepal government’s release of the new political map in 2020 led analysts to observe that it marked the beginning of a “cartographic war” between the two sides. Unfortunately, their analysis has stood the test of time: Kalapani continues to stick out like a thorn in Nepal-India ties.
Akhilesh Upadhyay is former Editor-in-Chief of The Kathmandu Post and a Senior Fellow at IIDS, a Kathmandu-based think tank. Views expressed are personal.
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