MAINS Current Affairs includes A New Phase in India-Nepal Relations & Mapping India’s Employment Landscape

INTERNATIONAL

1. A New Phase in India-Nepal Relations

Context: Recent high-level engagements between India and Nepal indicate renewed efforts to strengthen bilateral relations while addressing long-standing challenges such as border disputes and geopolitical concerns.

India–Nepal Border Disputes

India and Nepal share an approximately 1,751 km long open border, but certain territorial disagreements continue to affect relations.

Kalapani–Lipulekh–Limpiyadhura Dispute

• Nepal claims these areas based on the Sugauli Treaty of 1816, signed between the East India Company and Nepal.
• The treaty identified the Kali River as Nepal’s western boundary.
• Nepal argues that the river originates from Limpiyadhura, placing Kalapani and Lipulekh within Nepalese territory.
• India maintains that the river originates near Kalapani, making the strategically important Lipulekh Pass (India-Nepal-China tri-junction) part of Uttarakhand.
• Changes in the course of the Kali River over time have complicated border identification.

Susta Border Dispute

• Susta is another disputed region, administered by India as part of West Champaran district, Bihar.
• Nepal claims it as part of West Nawalparasi district, alleging encroachment of around 14,860 hectares of its territory.

Overview of India–Nepal Relations

• Geographical Linkages
  • Nepal shares borders with five Indian states — Sikkim, West Bengal, Bihar, Uttar Pradesh, and Uttarakhand.
  • Being landlocked, Nepal depends heavily on India for trade routes, transportation facilities, and access to the sea.

• Treaty of Peace and Friendship, 1950
  • The India–Nepal Treaty of Peace and Friendship (1950) forms the foundation of special bilateral relations.
  • It allows close cooperation and provides Nepalese citizens several facilities and opportunities similar to Indian citizens.

• Defence Cooperation
  • India supports the modernisation of the Nepal Army through training, equipment support, and capacity building.
  • Both countries conduct the joint military exercise SURYA KIRAN.
  • Since 1950, both nations have honoured each other’s Army Chiefs with the honorary rank of General.
  • The Indian Army’s Gorkha Regiments recruit soldiers from Nepal’s hill regions.

• Trade and Economic Relations
  • India is Nepal’s largest trade partner and major investor.
  • Indian companies contribute around 5% of Nepal’s total FDI stock.
  • Nepal became India’s 17th largest export destination, improving from the 28th position in 2014.
• Major Indian exports include:
  • petroleum products,
  • iron and steel,
  • automobiles,
  • machinery,

Connectivity and Development Partnership

• India is Nepal’s largest development partner, supporting projects in health, education, infrastructure, and connectivity.
• Major projects include:
  • development of Tribhuvan Airport (earlier Gauchar Airport),
  • East-West Highway,
  • cross-border railway links,
• Integrated Check Posts (ICPs).

Disaster Cooperation

• Operation Maitri (2015)
  • After the devastating Nepal earthquake, India became the first responder and launched Operation Maitri, its largest overseas disaster relief operation.
  • India also provided support for post-earthquake reconstruction.
• Cultural Relations
  • India and Nepal share deep historical and cultural connections often described as the “Roti-Beti relationship”, referring to social bonds, cross-border marriages, shared traditions, and people-to-people ties.

Other Areas of Concern

• Delayed Implementation of Projects
  • Slow progress in some connectivity and infrastructure projects has created concerns regarding timely delivery.
• Growing Chinese Influence
  • China’s increasing economic and strategic presence in Nepal has created new challenges for India’s neighbourhood policy.
• Perception of Asymmetry
  • Some sections in Nepal perceive India’s influence as excessive, often described as the “Big Brother” perception.
• Political Sensitivities
  • Domestic politics and nationalist narratives in both countries sometimes create diplomatic tensions.
• Water Resource Issues
  • Differences continue over shared rivers, hydropower development, and flood-control cooperation.

Way Forward

• Resolve Border Issues through Dialogue
  • Existing diplomatic mechanisms should be strengthened to peacefully address boundary disputes.
• Improve Connectivity and Trade
  • Faster implementation of road, rail, energy, and infrastructure projects can improve economic integration.
• Strengthen Energy Partnership
  • Both countries should expand cooperation in hydropower development, electricity trade, and transmission networks.
• Build Mutual Trust
  • Regular high-level engagements and respect for each other’s sovereignty can reduce misunderstandings.
• Promote People-to-People Relations
  • Educational exchanges, tourism, cultural cooperation, and youth engagement should strengthen the historic Roti-Beti relationship.

Conclusion

India–Nepal relations are built on strong foundations of geography, culture, economy, and historical connections.

Addressing differences through dialogue while expanding cooperation in connectivity, energy, trade, and people-to-people ties can create a more balanced and future-oriented partnership.

ECONOMY

2. Mapping India’s Employment Landscape

Context: Recent public discussions and youth-led protests have brought renewed attention to India’s employment situation, highlighting concerns related to job creation, skill gaps, and quality of employment.

Important Employment Indicators

• Unemployment Rate (UER)
  • Unemployment Rate measures the share of people in the labour force who are without work but actively searching for employment.
  • It is calculated as:
    • Unemployed persons ÷ Total labour force × 100
    • Labour Force Participation Rate (LFPR)
• LFPR represents the percentage of the working-age population that is either employed or actively looking for work.
• Employment Rate (ER)
  • Employment Rate shows the proportion of the working-age population that is currently employed.

Key Employment Trends in India (2016–17 to 2025–26)

• Decline in Employment Rate
  • India’s Employment Rate decreased from nearly 7% in 2016–17 to 38.7% in 2025–26.
  • Although total employment increased from around 406 million to 438 million, job creation did not match the rise in the working-age population.
• Gender-Based Trends
  • Male Employment Rate declined from about 5% to 64.8%.
  • Female Employment Rate reduced from nearly 8% to 9.4%.
• Age-Wise Trends
  • Employment declined across most age groups, except the 25–29 years and 55–59 years categories, which showed slight improvement.
• Education-Wise Trends
  • Employment rates declined across all education categories, with a sharper fall among less educated workers compared to graduates.

Reasons Behind India’s Employment Challenges

• Jobless Growth
  • Economic growth has been driven more by capital-intensive sectors, while labour-intensive manufacturing has not expanded enough to create large-scale employment.
• Slow Structural Transformation
  • A large workforce remains dependent on low-productivity agriculture, while movement towards manufacturing and modern services remains slow.
• Skill Mismatch
  • Education and training systems often do not match industry needs, making it difficult for many graduates to find suitable jobs.
• Changing Global Economic Conditions
  • Protectionism, trade restrictions, and global uncertainty have reduced export-led job opportunities.
  • Limited participation in some regional value chains has also affected manufacturing opportunities.
• Technological Disruption
  • Automation and Artificial Intelligence are replacing routine jobs and creating demand for new-age digital skills.
• Low Female Workforce Participation
  • Social barriers, safety concerns, lack of childcare support, and wage gaps restrict women’s participation in the labour market.

Why Employment Matters Beyond GDP Growth?

• Inclusive Growth
  • GDP growth increases economic output, but without sufficient employment generation, its benefits may not reach all sections.
• Poverty Reduction
  • Stable jobs improve incomes, reduce poverty, and promote upward social mobility.
• Stronger Domestic Demand
  • Higher employment increases purchasing power and strengthens consumption-led economic growth.
• Demographic Dividend
  • Employment creation is necessary to utilise India’s large young population as an economic advantage.

Government Initiatives for Employment Generation

• National Career Service (NCS)
  • A digital platform providing job information, career counselling, and vocational guidance to job seekers.
• Rural Self Employment and Training Institutes (RSETIs)
  • Provide skill training and entrepreneurship development to promote self-employment.
• Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM)
  • Supports urban poor through skill development, livelihood opportunities, and self-employment assistance.
• PM SVANidhi Scheme
  • Provides collateral-free working capital loans to street vendors and strengthens small livelihoods.
• PM Vishwakarma Scheme
  • Supports traditional artisans and craftsmen through skill development, credit support, and market access.
• Pradhan Mantri Mudra Yojana (PMMY)
  • Provides collateral-free loans to micro and small businesses to encourage entrepreneurship and employment creation.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
  • Provides industry-oriented skill training to youth for improving employability.

Way Forward

• Strengthen Manufacturing Sector
  • Expand labour-intensive manufacturing through Make in India, PLI schemes, and export-oriented industries.
• Improve Skill Development
  • Education and training systems should align with industry requirements, digital technologies, and future jobs.
• Integrate with Global Value Chains
  • Greater participation in international supply chains can boost manufacturing exports and generate employment.
• Promote Formal Employment
  • Social security coverage, labour protections, and incentives for formal hiring should be expanded.
• Manage AI and Automation Impact
  • Workers should be reskilled and supported to shift towards emerging employment opportunities.
• Increase Women’s Workforce Participation
  • Affordable childcare, safer workplaces, flexible work options, and equal opportunities can improve female employment.

Conclusion

India’s employment challenge is not only about creating more jobs but also about creating productive, secure, and quality employment.

A strategy focused on labour-intensive growth, skill development, women’s participation, and technology adaptation is essential to convert India’s demographic advantage into sustainable economic growth.

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