Indian Ambassador to Nepal Sudhakar Dalela on Monday, 9 November 2026, called on Nepal's Minister for Industry, Commerce and Supplies Deepak Kumar Sah in Kathmandu, marking one of his first formal diplomatic engagements since assuming his new post last week. The meeting centred on strengthening and expanding the already substantial bilateral trade and economic relationship between the two neighbours.

Key Developments From the Meeting

Both sides exchanged views on deepening bilateral economic ties, according to a social media post by the Indian Embassy in Kathmandu. Minister Sah's secretariat confirmed the discussions, stating that the two leaders explored concrete ways to strengthen and expand trade and economic relations. Dalela, who succeeded Naveen Srivastava as India's envoy to Nepal, arrived in the country last week to assume his new role.

India's Dominant Role in Nepal's Trade

The diplomatic engagement reflects the scale of India's economic footprint in Nepal. India accounted for 57.7 per cent of Nepal's total imports in fiscal year 2025-26, which ended in mid-July, according to Nepal Rastra Bank (NRB) statistics. Meanwhile, India was the destination for 82 per cent of Nepal's total exports during the same period, underscoring its position as Nepal's largest trading partner by a wide margin.

India also remained Nepal's largest source of foreign direct investment, accounting for 32.8 per cent of the country's total FDI stock as of mid-July 2025, according to an NRB report released in September. China followed at 9.3 per cent, Ireland at 7.3 per cent, Australia at 6.5 per cent, and Singapore at 5.4 per cent.

Trade Treaty Amendments Under Discussion

India currently provides duty-free access to almost all Nepali goods under the Nepal-India Trade Treaty, which was automatically renewed for another seven years in 2023. However, the two countries are actively discussing amendments to the agreement at Nepal's request. During a meeting of the Nepal-India Inter-Governmental Sub-Committee (IGSC) on Trade, Transit and Cooperation to Control Unauthorised Trade in September, both sides formally agreed to pursue amendments.

What Nepal Wants Changed

Nepali officials have flagged two key areas of concern. First, Nepal is seeking duty-free preferences for primary agricultural products on a reciprocity basis, arguing that Nepali agricultural goods cannot compete with Indian products if Nepal is simultaneously required to grant Indian agriculture the same concessions. Second, Nepal wants to resolve barriers arising from the Bureau of Indian Standards (BIS) certification requirement, which Nepali exporters say impedes their products from accessing the Indian market.

This comes amid a broader diplomatic reset, with Dalela's appointment signalling continued high-level engagement between New Delhi and Kathmandu. How the trade treaty revision proceeds will be a key early test of the new ambassador's tenure.