The Embassy of India in Kathmandu and the Government of Nepal signed Memorandums of Understanding on August 11 for undertaking eight High Impact Community Development Projects across the Himalayan nation. The projects, spanning education, health, and agriculture, will receive grant assistance of NPR 803 million from the Government of India. With this signing, the total number of HICDPs taken up since 2003 has reached 605, reinforcing India’s position as Nepal’s largest development partner at the grassroots level.
What Are High Impact Community Development Projects?
The High Impact Community Development Projects programme, originally called Small Development Projects (SDP), was launched on 7 November 2003 through a bilateral agreement between the Government of Nepal and the Government of India. The scheme was initiated during the premiership of Surya Bahadur Thapa in Nepal and is implemented through local authorities such as municipalities and rural municipalities.
HICDPs are outright grants, not loans. They are designed to be small, quick-to-build community infrastructure projects that directly enhance the quality of life at the grassroots level. The programme covers a wide range of sectors, including health, education, drinking water, sanitation and drainage, rural electrification, hydropower, embankment and river training, and cultural heritage preservation.
What distinguishes HICDPs from India’s larger infrastructure assistance in Nepal, such as cross-border railways and Integrated Check Posts, is their community-driven nature. Projects are identified and proposed primarily by Nepal’s local governments, ensuring they address local priorities and community needs rather than top-down mandates.
Key Milestones in the Programme’s Evolution
The programme has undergone several important changes over the years:
| Year | Development |
|---|---|
| 2003 | Programme launched as Small Development Projects through bilateral agreement |
| 2006, 2008, 2011, 2014 | Memorandum of Understanding renewed multiple times |
| 2017 | Agreement lapsed temporarily amid Nepal’s federal restructuring |
| 2019 | Revised guidelines routed all requests through Nepal’s federal government; scheme rebranded as HICDP |
| November 2023 | Programme marked its 20th anniversary with roughly 550 projects taken up and 480 completed |
| January 2024 | New agreement signed during the visit of India’s External Affairs Minister to Nepal, raising the per-project ceiling from NPR 5 crore to NPR 20 crore |
| August 2026 | Total HICDPs taken up reached 605 with the latest batch of eight projects |
As of August 2026, of the 605 projects taken up, 512 have been completed across health, education, agriculture, drinking water, connectivity, sanitation, and public utilities. The remaining projects are at various stages of implementation. The total outlay of the programme stands at approximately NPR 1,583 crore (about NPR 15.83 billion).
The Eight New Projects
The eight projects signed on August 11 are spread across four of Nepal’s seven provinces and cover three priority sectors: education, health, and agriculture. The agreements were signed between the Embassy of India in Kathmandu, Nepal’s Ministry of Land Management, Cooperatives, Federal Affairs and General Administration, and the respective project implementing agencies of the Nepali government.
Province-Wise Breakdown
| Province | Project | Location |
|---|---|---|
| Koshi | Digitalization of B.P. Koirala Institute of Health Sciences (BPKIHS) | Dharan, Sunsari |
| Koshi | Construction of Krishi Utpadan Sankalan Tatha Bikri Kendra (agricultural produce collection and sales centre) | Temkemaiyung Rural Municipality-9, Bhojpur |
| Koshi | Construction of Belbari Multiple Campus building | Belbari Municipality-3, Morang |
| Koshi | Construction of 15-bed hospital building | Barju Rural Municipality, Sunsari |
| Bagmati | Construction of Municipal Agricultural and Livestock Center building | Jwalamukhi Rural Municipality-6, Dhading |
| Karnali | Construction of 10-bed hospital | Dungeshwor Rural Municipality-5, Dailekh |
| Karnali | Construction of Agriculture Promotion Centre | Sarkegad Rural Municipality-4, Humla |
| Gandaki | Construction of cold storage facility | Kaligandaki Rural Municipality-4, Syangja |
Koshi Province received the largest share with four projects, reflecting the region’s diverse needs in health, education, and agricultural infrastructure. Karnali Province, one of the most remote regions of Nepal, secured two projects including a hospital in Dailekh and an agriculture promotion centre in Humla, one of the country’s most underserved districts. The cold storage facility in Syangja under Gandaki Province is expected to help local farmers reduce post-harvest losses and improve the marketability of agricultural produce.
How HICDPs Work: The Implementation Model
Unlike large infrastructure projects that are designed and managed by central agencies, HICDPs follow a grassroots-first model. A municipality, rural municipality, or other eligible Nepali entity prepares a proposal, typically for a school building, health facility, or water scheme, and submits it through the Ministry of Federal Affairs and General Administration (MoFAGA). The proposal is then vetted by Nepal’s Ministry of Finance before being forwarded to the Embassy of India in Kathmandu for approval.
Once approved, the implementing local government must establish a counterpart fund from its own resources. Under the current guidelines, municipalities are expected to contribute approximately 10 percent of the project cost as counterpart funding, while rural municipalities contribute around 5 percent. This joint investment model ensures local ownership and accountability.
All eight projects signed in August 2026 will be executed through local authorities, including municipalities, rural municipalities, and designated institutions. The implementation route, revised in 2019, channels all requests through Nepal’s federal government rather than allowing the Embassy to deal directly with local bodies. This restructuring aligned the programme with Nepal’s new federal governance structure adopted in 2017.
Programme Coverage Across Nepal
HICDPs have delivered benefits to communities across all seven provinces of Nepal, with projects spread across 74 districts:
| Province | Completed Projects (approx.) |
|---|---|
| Bagmati | 128 |
| Koshi | 89 |
| Madhesh | 77 |
| Gandaki | 70 |
| Lumbini | 68 |
| Sudurpaschim | 50 |
| Karnali | 25 |
Education is by far the largest sector, accounting for 308 of the 605 projects taken up, of which 221 are school buildings. This makes school construction the most common way ordinary Nepalis encounter the programme.
India-Nepal Development Cooperation: A 70-Year Partnership
The HICDP programme is one facet of a much broader development partnership between India and Nepal that stretches back more than seven decades. India-Nepal cooperation for modern infrastructure development began in 1951 with the construction of Gauchar Airport in Kathmandu, completed in 1954. The Indian Aid Mission in Nepal was also set up in 1954 to coordinate various developmental projects in areas of connectivity, health, education, and power.
Over the decades, this cooperation has expanded to cover a wide range of sectors. Some of the landmark projects include the construction of the Tribhuvan Rajmarg and the East-West Highway (Mahendra Rajmarg), the development of Tribhuvan University, the Kathmandu Water Supply Project, and airports at Janakpur, Bhairahawa, and Biratnagar. More recently, the partnership has delivered the Jaynagar-Kurtha-Bijalpura railway link and the Jogbani-Biratnagar rail link, three operational Integrated Check Posts (ICPs) at Birgunj, Biratnagar, and Nepalgunj, and the Motihari-Amlekhgunj Petroleum Pipeline, South Asia’s first cross-border petroleum product pipeline commissioned in 2019.
In the health sector, India supported the establishment of the B.P. Koirala Institute of Health Sciences (BPKIHS) at Dharan, a 50-seat medical college with a 350-bed hospital. India also built the Nepal Bharat Maitri Emergency and Trauma Centre in Kathmandu, the capital’s first specialized trauma facility. During the COVID-19 pandemic, India extended significant support including ICU beds, ventilators, RT-PCR kits, PPE, and vaccines.
Following the devastating earthquake of 2015, India committed USD 1 billion comprising USD 250 million in grants and USD 750 million as a Line of Credit for post-earthquake reconstruction. The grant component supported the construction of 50,000 houses in Gorkha and Nuwakot, 70 schools, 133 health facilities, and 30 cultural heritage projects across eight districts.
Beyond Infrastructure: Ambulances and School Buses
In addition to HICDPs and large infrastructure projects, India has supported Nepal’s health and education institutions through the gifting of 1,049 ambulances and 381 school buses. The ambulances cover all 77 districts of Nepal, while the school buses support educational institutions in 65 districts, including remote and underserved areas. This gifting programme, running since 1994, complements the HICDP initiative by addressing mobility needs in health and education delivery.
The Way Forward
The August 2026 signing comes at a time when the HICDP programme is operating under a renewed five-year framework signed in January 2024. The revised agreement, signed during External Affairs Minister S. Jaishankar’s visit to Nepal, significantly raised the financial ceiling for individual projects, allowing larger and more impactful interventions than before.
As close neighbours sharing an open border and deep civilisational ties, India and Nepal have maintained multi-sectoral cooperation across seven decades. The HICDP programme, with its grassroots-driven implementation model and geographic spread across all seven provinces, remains one of the most visible manifestations of this partnership. The Embassy of India in Kathmandu has described these projects as reflecting “the continued support of the Government of India in strengthening the efforts of the Government of Nepal in promoting growth and development, apart from augmenting infrastructure in priority sectors.”
With 605 projects taken up and 512 completed, the programme has built a substantial track record. The eight new projects signed in August, particularly the digitalization of B.P. Koirala Institute of Health Sciences and the agricultural infrastructure in remote districts like Humla and Dailekh, signal a shift towards addressing both modernization needs and basic infrastructure gaps simultaneously.
Key Takeaways
- The High Impact Community Development Projects (HICDPs) programme was launched on 7 November 2003 as Small Development Projects and was rebranded HICDP in 2019 under revised guidelines.
- A total of 605 HICDPs have been taken up since 2003, with 512 completed across all seven provinces of Nepal, at an aggregate outlay of approximately NPR 1,583 crore.
- The per-project ceiling was raised from NPR 5 crore to NPR 20 crore under a new five-year agreement signed in January 2024 during External Affairs Minister S. Jaishankar’s visit to Nepal.
- The January 2024 agreement routed all project requests through Nepal’s federal government, aligning the programme with Nepal’s 2017 federal restructuring.
- Education is the largest HICDP sector with 308 projects, of which 221 are school buildings, making school construction the programme’s most visible output.
- India has gifted 1,049 ambulances covering all 77 districts and 381 school buses covering 65 districts in Nepal since 1994.
- The HICDP programme is distinct from India’s large infrastructure projects in Nepal, such as the Jaynagar-Bardibas railway link, Integrated Check Posts, and the Motihari-Amlekhgunj Petroleum Pipeline.
