Nepal Australia Relations

Political Relations

Diplomatic relations between Nepal and Australia were established on February 15, 1960. Both countries celebrated 50 years of diplomatic relations in 2010. Australia opened its residential Embassy in Kathmandu at the level of chargé d’Affaires in 1984 which was upgraded to the Ambassadorial level in 1986. Nepal established its residential Embassy in Canberra in March 2007 which was formally inaugurated in September 2007. In addition, Nepal also has Honorary Consulates General/Consulates in Brisbane, Melbourne, Sydney, Perth and Adelaide.

Nepal’s relationship with Australia predates the establishment of diplomatic links in 1960. Over the years, the Australian Government and private sector have contributed to the economic and social development of Nepal through assistance in the fields of health, education, hydroelectricity, sustainable management of forest, agriculture, strengthening governance and service delivery, civil aviation, and livestock management.

Exchange of visits

The exchanges of visits at various levels have helped significantly in consolidating the relations between Nepal and Australia. The Minister for Foreign Affairs of Nepal visited Australia in November 2016 and held meetings with his counterpart and Minister for International Development and the Pacific as well as with Members of Australian Parliament in Canberra.  The Chief Justice of Nepal visited Australia to participate in ” 16th Conference of Chief Justice of Asia and Pacific ” organized by The Law Association for Asia and Pacific from 6 to 9 November 2015. There have also been visits to Nepal from Australia in different levels.

Bilateral Consultation Mechanism

Nepal and Australia signed an MoU on establishing a Bilateral Consultation Mechanism between the Ministry of Foreign Affairs of Nepal and the Department of Foreign Affairs and Trade of Australia on 14 July 2017 in Canberra, Australia. Foreign Secretary Mr. Shanker Das Bairagi and H.E. Mr. Gary Quinlan, Acting Secretary, Department of Foreign Affairs and Trade, Australia signed the MoU on behalf of their respective Governments. The establishment of the Consultation Mechanism has opened the avenue to regularly hold meetings and exchanges on bilateral, regional and international issues of mutual importance between Nepal and Australia.

Aid and its Mechanism

Earlier, the Australian Government’s aid used to be mobilized by Australian Agency for International Development (AusAID). With effect from 1 November 2013, AusAID, an independent statutory agency responsible for managing Australia’s overseas aid programme, has been formally abolished and has been made a part of the Department of Foreign Affairs and Trade (DFAT). The Prime Minister, Mr. Tony Abbott, MP, announced on 18 September 2013 that the AusAID would be integrated into the DFAT, enabling the aid and diplomatic arms of Australia’s international Policy agenda to be more closely aligned. With this change, the Australian Government has also decided to slightly decrease its aid in the coming year.  In 2017-2018 Australia would provide an estimated AUD 31.9 million in official development assistance.This will include an estimated AUD 15.6 million in bilateral funding managed by DFAT.

Economic and Technical Cooperation

Australia’s assistance to Nepal is delivered through the Government of Nepal and in partnership with other donors and multilateral organizations. Priority areas for Australia’s development assistance to Nepal are in line with Nepal’s poverty reduction strategy and include basic education, health, livelihoods, strengthening and improving governance, peace building and human resource development. Australia has also equally contributed to human resource development through the provision of scholarships, and helped to reduce the incidence of HIV through a Harm Reduction program for Injecting Drug Users (IDUs). Support has also been provided to peace building activities that address the root causes of conflict, such as issues of governance, poverty and discrimination.

Currently, Australia is assisting in enriching local governance, education and micro-enterprise development.

In the past Australia made significant contribution in the Community Forestry Programme in Nepal. Australia’s support in health, civil aviation, administration, community development, agriculture, heath, micro enterprise development, and peace building have remained important.

Economic Relations

Trade Relations

Nepal exports tea, coffee, essential oils, articles of leather, clothing, floor covering, carpet, cotton dress, paintings and pastels to Australia and imports refined petroleum, dairy products, beverages, spirits and vegetables. There is growing volume of trade with Australia which occurs in trade deficit to Nepal.

Value in million/ Dollars

Fiscal YearExportImportBalance
2013        5.5         24.9             -19.4
2014        6.2         25.9             -19.7
2015        5.8         35.4             -29.6
2016        5.8         47.13             -41.33


Source: www.tepc.gov.np

Least developed Countries including Nepal have benefited from Australia’s policy of preferential access to the LDC’s imports in Australian market.

Tourism

Nepal continues to be a country of attraction for Australian tourists. The arrival figure of Australian tourists in Nepal for the last three years is as follows: 

Year2013201420152016
Number20,46924,51618,61925,507

Source: Nepal Tourism Board, Nepal Tourism Statistics 2015

Foreign Direct Investment

Australia is the tenth largest investor in terms of number of industries. Australia has also invested in 48 different industries, service sectors and other fields amounting to Rs. 491.27 Million which generates 1362 job opportunities in the fiscal year 2013/14 in Nepal. Foreign Direct Investment by Australia in Nepal for the last four fiscal years stands as follows:

Rs. in Million

Fiscal YearNo of IndustriesInvestmentTotal no of Employment
up to 2067/68 (2010/11)34395.22974
up to 2068/69 (2011/12)36404.021018
up to 2069/70 (2012/13)44447.771242
up to 2070/71 (2013/14)48491.271362

Source: Department of Industries, GON, Industrial statistics 2070/71(2013/14)

Earthquake 2015 

Australia provided support to the victims of 2015 earthquakes and to the affected people of Nepal under humanitarian assistance and early recovery package.The support was mobilized through multilateral agencies like UNDP, WFP, UNFPA as well as through NGOs. The Government of Australia also made commitment to provide Nepal US$ 46,35,300 at International Conference on Nepal’s Reconstruction on 25 June 2015.

Bhutanese Refugee Third Country Resettlement Programme

Australia has been one of the destination countries for the Bhutanese Refugee Third Country Resettlement Programme. As of 31 July 2017, more than Six Thousand Six hundred (6,600) Bhutanese Refugees departed to Australia under resettlement programme.

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