Nepal Table of Contents
Nepal's relations with other South Asian nations were dominated by the search for alternate transit facilities and a reduction of India's influence. Nepal tried to stay clear of Indo-Pakistani rivalry, inasmuch as Nepal had a only minor role in the Kashmir dispute and had no involvement in several United States-sponsored security arrangements in the region in the early 1950s.
Nepal and Pakistan signed the protocol for establishing full diplomatic relations in 1962 and exchanged ambassadors in 1963. Two agreements between Kathmandu and Karachi (then Pakistan's capital) were signed in October 1962, calling for reciprocal most-favored- nation treatment. A January 1963 agreement provided Nepal with free trade and transit facilities through the port of Chittagong, East Pakistan (present-day Bangladesh). This arrangement somewhat reduced Nepal's dependence on India for import privileges, particularly after the establishment of an air link with East Pakistan later in the year. This endeavor to secure another transit route through East Pakistan had at best only limited potential because of the intervening Indian territory.
Nepal initially adopted a neutral posture during the IndoPakistan war of 1971 but immediately recognized the newly independent nation of Bangladesh on January 16, 1972. Two days after diplomatic relations were established with Dhaka, Islamabad broke off diplomatic relations with Kathmandu.
Nepal's focus shifted to Bangladesh as a permanent and much desired gateway to the sea. Bangladesh, friendly to India and close to Nepal's southern border, opened new potential for both trade and transit facilities.
Nepal's relations with Bangladesh improved when an anti-Indian faction seized power in Dhaka in August 1975. The turning point in Nepal-Bangladesh relations, however, occurred in April 1976 when the two countries signed four agreements relating to trade, transit, civil aviation, and technical cooperation. They also jointly issued a communiqué on maintaining close cooperation in the fields of power generation and the development of water resources. The transit agreement exempted all traffic-in-transit from transit duties or other charges. Six points of entry and exit for the movement of Nepalese traffic-in-transit through Bangladesh's ports and territory were designated. This transit agreement came at a crucial time--during Nepal's conclusion of a trade and transit agreement with a reluctant India. In 1986 Nepal was also gratified when Bangladesh wanted to involve Nepal in the issue of distribution and utilization of water from the Ganges River.
Data as of September 1991