Department of State Policy Statement



a. objectives

Our fundamental objectives with respect to Nepal are the maintenance in power of a non-Communist government, the continued orientation of such a government toward the western democracies as opposed to Soviet Russia and its satellites and the increasing participation of Nepal in world affairs. We desire the development of Nepal’s economy and political institutions along democratic lines.

b. policies

The United States Government extended recognition to the Government of Nepal in 1947, and an Agreement of Commerce and Friendship was signed at Kathmandu on April 25, 1947. The first Nepalese and American ministers presented their credentials in Washington and Kathmandu respectively in 1948.

Nepal is dependent upon outside assistance for defense against aggression and for the acceleration of its economic development. We wish to be helpful to the Nepalese Government and people in their problem of adjusting their politically and economically backward country to twentieth century conditions while preserving internal order and territorial integrity.

The Government of Nepal, one of the most autocractic in the world, contradicts in almost all respects our own traditional concepts of personal freedoms and representative government. It is not our purpose to support the Government of Nepal per se, but rather, by increasing contacts and demonstrations of friendship and fair dealing, to develop a firm basis for Nepalese reliance on the western democracies. While the Nepalese Government’s repressive policy effectively inhibits overt communist activity, it also stifles legitimate political movements, forces those who oppose the present regime underground, and encourages opposition elements of whatever political persuasion to [Page 1485] collaborate with each other in their adversity. We believe that a gradual democratization of its governmental institutions would, in the long run, contribute to the internal stability of Nepal. We favor any steps which the Nepalese Government might take to give the people a more significant role in the conduct of their affairs. At the same time we recognize that too rapid progress in this regard would provide conditions suitable for seditious activities by those who do not have Nepal’s welfare at heart, would most probably result in internal chaos, and might jeopardize the independence of the country. Hence, it is our policy, as occasion permits and while assuring that the Nepalese Government remains alert to all forms of communist activity, discreetly and informally to encourage the Nepalese Government to make genuine concessions to increasing demands by Nepalese for popular government by giving effect to the 1948 Constitution, which has been promulgated but not put into effect, and by similarly progressive measures.

The US seeks to encourage Nepal to abandon its policy of isolation and to support Nepal in its ventures into international affairs. We supported Nepal’s application for membership in the United Nations, an application which, like those of many other nations, was rejected by a Soviet veto. Nepal’s wish to become a member of the United Nations has become part of the general problem of the admission of new members. The United States will continue to work for Nepal’s admission along with that of other countries which we feel should be admitted but which have been opposed by the USSR. Pending the development of a formula by which Nepal may gain admission, we should promote Nepalese understanding of the motives on which our international acts are based. If Nepal becomes a member of the United Nations we would hope that the conduct of our relations has been such that we would find it adopting positions similar to our own in international problems. In the meantime, Nepal is gaining experience in international organizations; its application for associate membership in the Economic Commission for Asia and the Far East, supported by the United States, was successful, and Nepal has been represented at the recent meetings of the ECAFE.

Since the inauguration of diplomatic relations with Nepal, official contacts with the Nepalese Government have been intermittent. The extent and tempo of US-Nepalese political and economic relations have not, of themselves, justified the establishment of permanent legations in the respective capitals. Increased Russian and Chinese Communist interest in the Himalayan periphery of Nepal, and events in Tibet and Sinkiang Province1 and their impact on Nepal itself [Page 1486] may well dictate the establishment of a post. A permanent post at Nepal’s capital would also provide a channel of information regarding Tibet.

Consistent with our policy of promoting the opening of Nepal to western influences, the United States supports through diplomatic channels the applications of Americans to enter Nepal. While the Nepalese Government is becoming progressively more liberal as regards the travel of foreigners in the country, we should continue to urge it to grant Americans greater freedom to enter and travel throughout Nepal.

Nepal is the home of the world-famous fighting castes, the Gurkhas. By international agreement the Nepalese Government continues to export as mercenary troops its fighting men who now serve in the Indian army and in the British imperial forces. We should endeavor to assure that the military manpower of Nepal remains available to us or our allies.

The present Government of Nepal displays genuine interest in the improvement of economic conditions and the progressive industrialization of the country. It is planning a series of five-year programs to improve Nepal’s agricultural and industrial production, but is severely handicapped by the lack of technically qualified personnel in all fields. Plans to build a large dam on the Kosi River and an electrical power plant to serve western Nepal and parts of adjoining Bihar in India are under consideration jointly by the governments of Nepal and India.

Our policy is to aid Nepal in so far as possible in its plans for agricultural and industrial development. It is our belief that an important first step in the fulfilment of Nepal’s plans is a thorough survey of the industrial and agricultural potentialities of the country. To this end we have prompted the Nepalese to negotiate with American organizations which could conduct a comprehensive economic survey of Nepal, but Nepal’s inability to muster exchange sufficient to cover the dollar costs of such a project has so far forced postponement of the scheme. We continue to emphasize the importance of Nepal’s obtaining reliable information about its own resources, since such data as exist are fragmentary and wholly insufficient to arouse the interest of potential investors. Preliminary studies in connection with the Point Four Program have earmarked funds to supply the services of experts for general assistance to the Nepalese Government in reclamation, hydroelectric power, and flood control, and to conduct a geologic survey of the country. Despite the fact that Point Four funds allocated to the area are much smaller than previously anticipated, it is desirable that the planned geologic survey be made. Should [Page 1487] minerals of high importance be found, we would wish to obtain these minerals, observe the efforts of others to obtain them, and, if possible, deny them to unfriendly powers.

Lacking sufficient foreign exchange to finance large scale developmental programs, it is incumbent upon Nepal to take fullest advantage of opportunities for self-help. Also, for technical assistance and foreign investment it must rely heavily on India, a country which unfortunately also lacks dollars, indigenous investment capital, and technicians sufficient for its own requirements. The prospects, therefore, of substantial progress in the foreseeable future are remote. It is unlikely that US assistance to Nepal will be very great in the future. We should, therefore, not create any illusions as to the amount of aid, financial or otherwise, which we can furnish Nepal. At the same time we should exhibit a continued readiness to discuss frankly and informally such problems as the Nepalese wish to raise.

It would be a distinct service to Nepal and would accord with our objectives if we could assist the Nepalese in developing a reliable source of dollar exchange. While our efforts have so far not been productive, we should continue to explore means whereby we may help Nepal in this regard.

c. relations with other countries

Nepal’s most active foreign relations are those with India, the United Kingdom, and Tibet. Although Nepal has exchanged diplomatic missions with the Netherlands and France, relations with these countries are not significant. India and the United Kingdom are the only countries maintaining permanent missions at Kathmandu.

Upon their withdrawal from India, the British yielded to India their preeminent position in the foreign relations of Nepal. Geographic propinquity, and cultural, religious and economic ties between India and Nepal lead naturally to a predominant Indian position. The Government of India desires the democratization of Nepal’s government to forestall a revolution which might inflame the entire area should the ruling family refuse to yield to the pressure for reforms. India pursues its objective primarily by permitting, and even encouraging, agitation within India by Nepalese political movements which are banned in Nepal. It is doubtful that Nepalese-Indian relations can be wholeheartedly friendly and cooperative so long as the governmental policies and arrangements in Nepal are unchanged. It would not accord with our traditional interest in the development of representative governments and would probably be resented if we were to press the Indians to withold support of these political movements. However, since there is evidence that they are being infiltrated by communists, it would not be amiss discreetly and informally to mention to friendly Indian officials our concern at their frankly communist complexion.

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India’s support of Nepal’s application for membership in the United Nations can be regarded as an earnest of its intention to respect Nepalese independence. Aware that approaching communism in neighboring areas of Central Asia may be a threat to India, Prime Minister Nehru has publicly announced that an attack on Nepal would be regarded as an attack on India. Nepal’s economic dependence on India is a cause of continuing Nepalese dissatisfaction, and although some concessions were granted the Nepalese in a recently signed commercial treaty, the agreement in effect solidified India’s control of Nepal’s trade by continuing the arrangement whereby Nepal must apply to the Reserve Bank of India for its foreign exchange requirements.

The United Kingdom has occupied a special position in Nepal since the conquest of India. Although forces of the East India Company defeated Nepalese armies, the British gave Nepal special treatment partly because of the action of the ruler of Nepal in coming to the aid of the British during the Indian Mutiny in 1857. The British respected Nepal’s autonomy and by treaty in 1923 recognized its independence. Diplomatic representatives have been accredited to Kathmandu since that time. Alleging that they believe the United States is more objective and disinterested than Britain, officials of the Nepalese Government turn to the US for advice on occasion in preference to the British. We have consistently complied with these requests for assistance and advice, but at the same time we have not wished to undermine the British position. Long experience in Nepal and long acquaintance with Nepalese officials qualify British officials to offer friendly guidance, and we favor the continuation of close and friendly relations between Nepal and the United Kingdom.

Tibet has cultural and religious ties with Nepal which overshadow the unpleasant recollection of Nepal’s two invasions of Tibet. As a consequence of the second invasion in 1854, Tibet pays Nepal an annual tribute of Rs. 10,000, and a Resident Agent of the Government of Nepal resides in Lhasa. In theory a commercial agent rather than a political officer, it is assumed that he reports to his government periodically regarding the political situation in Tibet. Today a certain amount of trade flows between the two countries.

Nepal has never had diplomatic relations with Russia. The Soviet veto of Nepal’s application for membership in the United Nations caused genuine disappointment among Nepal’s leaders and served to confirm their natural antipathy for Russian domestic and foreign policies. It is highly unlikely, therefore, that the Government of Nepal as presently constituted will wish to enter into relations with the USSR for some time to come. The Government is firmly opposed to communism, and it is believed that communism has made little headway in Nepal itself. It is, however, impossible to gauge the extent [Page 1489] of covert subversive activities within the country. There is good evidence that there is considerable communist activity among Nepalese émigrés in India, and it is quite possible that Nepalese political organizations infiltrated by communists, and operating in India could constitute a serious threat to Nepal’s stability. Present plans of these communist-influenced movements are to infiltrate Nepal itself with trained agitators and workers to provoke revolt against the present government.

d. policy evaluation

Little progress has been made with respect to our desire to see the development of Nepal’s economy and political institutions along democratic lines. Increased attention should be given to action in implementation of our policies regarding economic assistance. It is believed that little political influence may be brought to bear upon the Nepalese Government until such time as a permanent mission is established in Kathmandu. It is believed that only by constant contact with the Government of Nepal can we hope to realize more fully the aims which we have set as regards Nepal. International developments having a direct impact on Nepal might compel closer relations with Nepal and broaden their scope. Under present conditions, however, the conduct of our relations with Nepal cannot be expected to produce immediately tangible results.

  1. For documentation on U.S. relations with Tibet, see vol. vi, pp. 256 ff.