Why Nepal’s new 100-rupee note has irked India

Nepal’s new Rs 100 currency note has left India irked.

Kathmandu on its new note has featured a new national map including territories that India has long maintained as its own. The development has yet again reignited the border dispute between the two countries.

India and Nepal share a border of around 1,850 kilometres. Five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand – border Nepal.

But what happened? What do we know about the areas and why they are important? How has India responded?

Let’s take a closer look.

What we know about Nepal’s new Rs 100 note

The new Rs 100 currency note depicts a map showing the areas of Kalapani, Lipulekh and Limpiyadhura territories as part of Nepal. The new note comes with the signature of previous Governor Maha Prasad Adhikari. The date of issuance of the banknote is 2081 BS, which stands for the previous year 2024.

This is the map that the previous KP Sharma Oli government had approved in May 2020 after the go-ahead from Nepal’s parliament. A spokesperson of the Nepal Rastra Bank said that the map was already depicted on the previous Rs 100 note. The spokesman added that this has been reworked after a decision from the Nepal government.

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Under the Nepal Rastra Bank Act, the NRB is responsible for designing the notes. However, any changes to the design or size of the notes need government approval. The new note features Mount Everest on the left side and a watermark of the Rhododendron — the national flower of Nepal — on the right.

The centre of the note includes illustrations of Nepal’s map and the Ashoka Pillar. The note depicts a faint green-coloured map of Nepal in the background in the middle. The Ashoka Pillar is placed near the map with the accompanying text, “Lumbini, the birthplace of Lord Buddha”. The back of the note also features a picture of a one-horned rhinoceros with its calf.

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It has a security thread as well as an embossed black dot to aid the blind in recognising it via touch. Of all Nepal’s currencies – Rs 10, Rs 50, Rs 100, Rs 500, and Rs 1,000 – the only one to feature the map is the 100-rupee note.

What we know about the areas, their importance

Kalapani, which comprises 35 square kilometres, is located in Uttarakhand’s Pithoragarh district. The river Mahakali flows through the area. However, Nepal has claimed that Kalapani is part of the Darchula district. The Indo-Tibetan Border Police has patrolled the area since 1962. The area is important because it sits at the junction between Nepal, China and India.

The 1816 Treaty of Sugauli, which British India and Nepal signed, defined the river as the western border of Nepal. India claims the river Mahakali, which has several tributaries all of which merge at Kalapani, begins there. But Nepal claims it originates from the Lipulekh Pass. “Nepal has laid claim to all areas east of the Lipu Gad — the rivulet that joins the river Kali on its border, a tri-junction with India and China,” a scholar wrote.

Lipulekh is a Himalayan pass linking Uttarakhand and Tibet. Traders and pilgrims, including those for Mount Kailash and Lake Mansarovar, have used this pass for hundreds of years. Though it is controlled by India, both countries lay claim to it. India in 2020 had constructed an 80-kilometre road from Uttarakhand to the pass. The then Government had claimed “strategic, religious and trade” reasons for doing so.

Nepal had objected to this at the time, and urged India not to carry out any construction work or trade in an area it claimed as its own. The ministry argued trade through Lipulekh began in 1954 and has been ongoing for decades. The ministry also slammed Nepal’s claims as ‘unjustified’ and not based on ‘historical facts or evidence’.

Limpiyadhura is a glacial ridge north-west of Kalapani. Nepal claims it is the source of Mahakali river, which India disputes. Taken together, these areas comprise around 370 square kilometres.

What the Ministry of External Affairs has said

India has slammed Nepal’s actions, calling the move an “artificial enlargement” of territory. External affairs minister S Jaishankar said it does not change the ground reality and that Kalapani, Lipulekh and Limpiyadhura are Indian territories. India, responding to the 2020 map that Nepal put out laying claim to all these territories, said it was a “cartographic assertion.” The External Affairs Ministry had previously slammed Nepal’s map as a unilateral act that ‘does not change ground reality’. The statement noted:

“This unilateral act is not based on historical facts and evidence. It is contrary to the bilateral understanding to resolve the outstanding boundary issues through diplomatic dialogue. Such artificial enlargement of territorial claims will not be accepted by India.”

India had previously warned Nepal against “artificial enlargement” of territorial claims. The ministry spokesperson said dialogues between Nepal and India regarding boundary, border areas, are ongoing within that framework. On territorial claims, our position remains that such claims are neither justified nor based on historical facts and evidence. Any unilateral artificial enlargement of territorial claims is untenable.

New Delhi has previously said it is open to “constructive interaction” with Kathmandu on resolving boundary issues through “dialogue and diplomacy.” India in August had rejected Nepal’s objection to the resumption of India–China border trade through the Lipulekh Pass. The ministry reiterated: trade through Lipulekh Pass had commenced in 1954 and has been going on for decades. As regards territorial claims, their position remains unchanged.

Why China is printing all of Nepal’s currency

This is nothing new. For decades India had been printing Kathmandu’s currency. However, Nepal switched to printing via China, a decade ago — reportedly because no Indian printer would be able to depict these disputed territories as part of Nepali currency under the law. China continues to print all of Nepal’s currency.

The NRB had commissioned the Chinese company to design, print, supply and deliver 300 million 100-rupee notes. The total printing cost is estimated at approximately US$ 8,996,592 — which, at current rates, works out to roughly Rs 63.4 lakh. So, making the cost of printing each 100-rupee note is around NPR 4.04, i.e. about US$ 0.028 and INR 0.0025.

With inputs from agencies