This article examines the evolving bilateral relationship between India and Nepal against the backdrop of intensifying great-power competition in South Asia. Drawing on the 1950 Treaty of Peace and Friendship, the open-border regime, the 2015–16 economic blockade, the May 2020 Nepali map controversy over Kalapani–Lipulekh, and expanding Chinese infrastructure investments, the analysis highlights both enduring linkages and emerging frictions. Particular attention is paid to hydropower cooperation (Arun-III, Arun-IV and Pancheshwar), electricity exports to India and Bangladesh, labour-migration remittances, and Nepal‘s balancing strategy between its two giant neighbours. The study concludes that while structural asymmetries and territorial disputes continue to strain trust, pragmatic energy and connectivity initiatives offer pathways for a more mature partnership.