Most bilateral relations in the region, including those between Kathmandu and Islamabad, are dominated by concerns about India's massive influence in the region. Both countries have a long history of diplomatic and political ties, and India has played an important role in both countries' considerations.
After India's independence in 1947, Nepal maintained diplomatic relations with India, but not with Pakistan. Nepal and India signed a Treaty of Peace and Friendship in 1950, establishing a broad economic, strategic, and defense partnership. As a result, Nepal stayed apart from Pakistan, which was at odds with India. Nepal's criticism of what it saw as excessive Indian influence encouraged the government to pursue ties with the People's Republic of China and Pakistan. Nepal and Pakistan established diplomatic ties on March 20, 1960. Following the establishing of diplomatic relations, the friendship and cordiality between these two countries has grown stronger, spurred by understanding and cooperation. The current status of bilateral ties is one of friendliness and mutual benefit.
The establishment of diplomatic relations between Pakistan and Nepal took place on March 20, 1962, following a lengthy period of indifference from Pakistan towards Nepal. Various factors increased Nepal's strategic importance in Pakistan's calculations. In 1960, as Indo-US ties grew stronger, Pakistan began engaging more with South Asia's smaller neighbors. During this time, both Nepal and Sri Lanka saw growing involvement with Pakistan. Another key aspect was geography; East Pakistan was surrounded on three sides by Indian territory and shared a tiny portion of its border with Nepal, thus good relations with Nepal were critical for Pakistan.
Former Pakistani Prime Minister Z.A. Bhutto put it this way: "Nepal is to Pakistan what Afghanistan is to India; Nepal's proximity to East Pakistan and the crucial states of Sikkim and Bhutan, as well as the province of Assam with its Naga and Mizo freedom fighters, places Nepal high on Pakistan's foreign policy calculations."
Pakistan was concerned about its internal and domestic difficulties after independence. Furthermore, because to Nepal's King Tribhuvan's devotion to India, Pakistan's previous attempts to engage with Nepal were unsuccessful. King Mahendra, Nepal's successor to King Tribhuvan, was likewise determined to establish ties with neighboring neighbors in order to minimize Nepal's reliance on India.
As a result, under his leadership, Pakistan-Nepal diplomatic ties improved significantly. Although Nepal remained neutral throughout the Indo-Pak war of 1971, it soon recognized the newly independent Bangladesh, prompting Pakistan to break diplomatic ties with Kathmandu, which were later re-established.
Political talks between the two countries are largely held at SAARC summits; bilateral trips are uncommon. The most recent visit was on March 5, 2018, when Pakistani Prime Minister Shahid Khaquan Abbasi paid a bilateral visit to Nepal after a two-decade hiatus. During this visit, Pakistan's Prime Minister spoke extensively about China's BRI and CPEC projects, as well as Nepal and Pakistan's relations. The most recent Foreign Secretary-level Nepal-Pakistan bilateral political consultation took place in Islamabad on February 25, 2020. The conference was originally set for 2019, but Nepal cancelled it due to escalating India-Pakistan tensions.
Along with plans for collaboration in numerous industries, the nations also exchanged opinions on how to commemorate 60 years of diplomatic relations with various programs. As tensions between India and Nepal grow over a variety of issues, Pakistan and China are using the opportunity to strengthen their connections with Nepal. India must tread carefully in engaging Nepal, whose growing ties with China and Pakistan do not auger well for India's interests in the region. Anti-Indian sentiment has long been used by Nepal to boost its domestic position.
It was utilized to strengthen Nepal's identity under King Birendra's reign, and a similar connection may be drawn under the current system, when India's influence on smaller neighboring countries is seen with distrust and concern, drawing on the Gujral Doctrine. K.P Oli, Nepal's current Prime Minister, is noted for his pro-China stance. As the China-Pakistan connection grows, India must earn the trust and cooperation of its smaller neighbors in order to dissuade China in its traditional region of influence.
In 1962, the countries struck a trade deal. In 1983, the Nepal-Pakistan Joint Economic Commission was formed to improve commercial and economic cooperation between the two nations. There is a lot of room to improve trade and commerce partnerships. Pakistan has made significant investments in Nepal's textile, hotel, and banking industries through joint ventures. In 1996, the Federation of Nepalese Chambers of Commerce and Industry and the Federation of Pakistan Chambers of Commerce and Industry formed a joint business council. In 2009, a tourism cooperation agreement was struck. In both countries, information is shared and tourism is pushed. Inter-university collaboration is also being used to improve cultural linkages between the two countries. After the MFN trade protocol was signed in 1962, both nations inked Trade Agreements in 1982. Both countries support SAFTA and the South Asian Economic Union.
The two countries' total trade volume is estimated to be around US$ 4.8 million. Pakistan exports $1.631 million worth of commodities to Nepal, whereas Nepal exports $3.166 million worth of goods to Pakistan.
Pakistan and Nepal can work together to revive SAARC as SAARC is now inactive due to India’s dubious role. This is an open secret that the detrimental effects of the Indo-Pak conflicts have threatened the effectiveness of SAARC.
Pakistan also provides financial aid to Nepalese students seeking higher study at Pakistani institutions. Both countries' economic collaboration is extensive, including a wide range of industries.
Both countries have begun to deepen military ties in recent years, with Nepal acquiring guns from Pakistan. Between 2004 and 2006, the Nepalese monarchy was condemned and isolated by India, the United Kingdom, and the United States for repressing democracy. In order to stay in power and fight the Maoist insurgency, the monarchy developed military cooperation with China and Pakistan, which provided extensive military support, arms, and military equipment to Nepal. Nepal has received medium-tech weapons from both Pakistan and China. However, Cementing Pakistan-Nepal’s ties has immense potential for both parties.