India and Nepal are enhancing their economic collaboration with growing cooperation in trade, tourism, infrastructure connectivity, and energy, as reported by Nepalese media.

Tourism plays a crucial role, as both countries boast a rich cultural heritage and beautiful landscapes, making them attractive travel destinations for each other and global tourists. Therefore, the governments are prioritizing the development of tourism on a large scale, including in less conventional areas, according to an article on the Nepal Aaja digital news portal.

In November 2025, both nations modified the Treaty of Transit, a bilateral agreement designed to improve cross-border connectivity and trade, facilitating the rail transport of freight between Jogbani in India and Biratnagar in Nepal, including bulk goods.

Additionally, this liberalisation will apply to essential transit routes, which will not only strengthen multimodal trade connectivity between the two countries but also enhance Nepal’s trade with other nations. Such initiatives represent an effort to further solidify the economic and commercial relationship between the two nations, the article noted.

Both countries are embarking on new chapters of energy cooperation focused on improving regional connectivity and sustainable power development. Advancing their commitment to clean energy, New Delhi and Kathmandu achieved a significant milestone with the Indian Oil Corporation Ltd. (IOCL) exporting Liquefied Natural Gas (LNG) to Nepal.

This development was made possible by the establishment of cryogenic storage and regasification facilities at Simara, Nepal. This initiative underscores the collaboration in promoting sustainability and efficiency through viable alternatives for industrial energy, as stated in the article.

The article also emphasizes the acclaimed Arun-3 Hydroelectric Project, which is being constructed by SJVN Limited, a public sector enterprise from India, tapping into Nepal’s vast water resources and hydropower potential to meet India’s growing energy demands.

This 900 MW run-of-the-river hydropower project symbolizes the strong India-Nepal partnership in the hydropower sector, offering multiple benefits such as providing free electricity to Nepal, satisfying India’s rising energy needs, and generating local economic opportunities.

Nepal is expected to gain energy royalties, alongside rural electrification and infrastructural improvement. Thus, in their economic interdependence, India serves as a “ready and dynamic market for Nepal’s extensive hydropower resources.”

On the financial development side, there have been progressive steps including the establishment of interoperability between UPI (Unified Payments Interface) and FonePay QR in Nepal. Even during the Covid-19 pandemic, when borders worldwide were closed, trade routes between India and Nepal remained open and robust, exemplifying their resilient economic relationship.

The mutually advantageous bilateral economic relations are evolving into a shared economic future for both nations, which share deep historical ties and a collective sense of heritage, the article concluded.