India's HICDP in Nepal: Explainer and Province-Wise Breakdown

High Impact Community Development Projects (HICDPs) are small-scale community infrastructure projects in Nepal financed by grant assistance from the Government of India and implemented through Nepali agencies at the local level. The scheme was originally called Small Development Projects (SDP) and was launched on 7 November 2003 (Kartik 2060 BS) through a bilateral agreement between the Government of Nepal and the Government of India, during the premiership of Surya Bahadur Thapa.

HICDPs are outright grants, not loans. Typical projects are school buildings, campus blocks, health posts and hospital wings, drinking water and sanitation systems, small roads and bridges, rural electrification, irrigation, embankment and river-training works, and cultural or social-welfare facilities. They are deliberately small and quick to build, which distinguishes them from India's big-ticket assistance in Nepal such as the Jayanagar–Bardibas railway, integrated check posts, the Motihari–Amlekhgunj petroleum pipeline and post-earthquake reconstruction; the Embassy of India's development dashboard tracks those separately as 158 completed large and intermediate grant projects.

The programme's visibility explains why it is searched so often district by district. Marking the scheme's 20th anniversary in November 2023 (Mangsir 2080 BS), the Embassy of India noted that Nepal had seen over 27 new projects a year on average since 2003 — effectively more than one new India-funded project starting every fortnight somewhere in the country.

For its first phase, the SDP scheme worked as a tripartite arrangement between the Indian Embassy in Kathmandu, the District Development Committees (DDCs) and local user committees. The 2003 memorandum of understanding was renewed several times — in 2006, 2008, 2011 and 2014 — before lapsing in August 2017 (2074 BS). The lapse coincided with Nepal's transition to federalism: DDCs were being replaced by District Coordination Committees, and the 2015 Constitution bars provincial and local governments from directly seeking foreign assistance.

The framework was subsequently revived under revised guidelines prepared during the K P Sharma Oli government in 2019 (2076 BS), which routed all project requests through Nepal's federal government rather than allowing the embassy to deal directly with local bodies. Around this revival the scheme was rebranded as High Impact Community Development Projects. A fresh umbrella agreement signed on 4 January 2024 (Poush 2080 BS) put the renamed scheme on a new five-year footing.

The current agreement was signed in Kathmandu on 4 January 2024 by Nepal's Finance Secretary Krishna Hari Pushkar and Indian Ambassador Naveen Srivastava, in the presence of Foreign Minister N P Saud and India's External Affairs Minister S. Jaishankar, during the 7th Nepal–India Joint Commission meeting. Its headline change was the per-project funding ceiling: raised fourfold from NPR 50 million (5 crore) to NPR 200 million (20 crore). Nepali media reported that India had initially proposed NPR 240 million, and Nepal settled on NPR 200 million after consultations among the prime minister, foreign minister and finance minister. The agreement is valid for five years.

The renewed terms keep the post-2019 modality: local governments cannot approach the embassy directly. Requests travel through the Ministry of Federal Affairs and General Administration (MoFAGA) and the Ministry of Finance, and each implementing local unit must establish a counterpart fund of its own money — then prime minister Pushpa Kamal Dahal described the model as joint investment and joint decision-making. Reported counterpart shares have varied: earlier guidelines cited about 10 percent for municipalities and 5 percent for rural municipalities, while the Kathmandu Post has reported a 20 percent counterpart requirement under the renewed terms.

India's Ministry of External Affairs bilateral brief of June 2024 recorded over 551 projects undertaken since 2003 at a total cost of about NPR 1,249 crore — a useful dated snapshot against which later growth can be measured.

Because new memoranda of understanding are signed in batches every few months, HICDP totals move constantly and different official documents give slightly different figures. As of mid-2026, the Embassy of India's development partnership brief states that 598 projects costing approximately NPR 1,583 crore (about NPR 15.83 billion) have been taken up across Nepal since 2003, and its live dashboard lists 507 projects as completed, with the remainder under construction or in preparatory stages.

Intermediate milestones show the pace. At the 20th anniversary in November 2023 the embassy counted nearly 550 projects taken up and 480 completed; by September 2024 the Kathmandu Post reported 563 taken up and 490 completed; by February 2026 completions had crossed 500. Batches keep arriving — for example, twelve MoUs worth NPR 474 million for school buildings, health centres and a water supply system were signed on 27 September 2024, an average of roughly NPR 40 million per project.

Alongside HICDPs, India runs a linked gifting programme: according to the June 2024 MEA brief, 1,009 ambulances and 300 school buses had been distributed across Nepal since 1994, and these handovers are often announced together with HICDP inaugurations.

Education is by far the largest HICDP sector. Of the 598 projects taken up as of mid-2026, the Embassy of India counts 308 in the education sector — just over half the portfolio — of which 221 are school buildings. This is why 'India funded school' is the most common way ordinary Nepalis encounter the scheme: a new block for a secondary school or a campus building, inaugurated jointly by embassy officials and local representatives.

The embassy does not publish a full numeric split for the remaining sectors, but it lists them as health (health posts, hospital buildings and equipment), drinking water and sanitation, roads and bridges, embankment and river training, rural electrification and small hydropower, irrigation, culture and social welfare. Health and drinking water are the next most visible categories in inauguration announcements, followed by connectivity works in the Tarai and river-training projects along flood-prone rivers.

The Embassy of India's development cooperation dashboard, as accessed in mid-2026 (2083 BS), breaks down the 507 completed HICDPs by province. Bagmati Province leads with 128 completed projects, followed by Koshi with 89 and Madhesh with 77. Karnali, Nepal's least populous province, has the fewest at 25. Recent reporting puts overall HICDP coverage at 74 of Nepal's 77 districts across all seven provinces.

Counting conventions have changed over time, so older embassy figures look different: the November 2023 anniversary release counted projects undertaken (not completed) and listed 107 projects as spanning more than one province, alongside 105 in Bagmati and just 14 in Karnali. The dashboard's current method assigns every completed project to a single province, which is the cleaner series to cite. Karnali's low count partly reflects its later integration into the scheme; its number has grown fastest in relative terms, from 14 undertaken in late 2023 to 25 completed by mid-2026.

Since the 2019 guideline revision, the route runs entirely through Nepal's federal government. A municipality, rural municipality or other eligible Nepali entity prepares a proposal — typically for a school, health facility or water scheme — and submits it through the Ministry of Federal Affairs and General Administration. After screening and Finance Ministry concurrence, a memorandum of understanding for the selected project is signed with the Embassy of India, and the local unit implements the work with monitoring involving the District Coordination Committee.

Selection is competitive. The Kathmandu Post reported in February 2026 that of around 400 proposals forwarded in a recent round, only about 40 projects were approved — roughly one in ten. Proposals within the NPR 200 million ceiling that fall in Nepal's stated priority sectors, come with a committed counterpart fund and have land and community backing in place stand the best chance.

HICDP has always carried political controversy in Kathmandu. When the ceiling was quadrupled in January 2024, former prime minister Jhalanath Khanal argued that taking funds from foreign embassies for local projects harms the national interest, UML leader Pradeep Gyawali warned it could foster a rent-seeking mentality among local units, and former foreign minister Kamal Thapa said allowing a foreign mission to fund projects of up to NPR 200 million was akin to permitting a parallel government. Foreign Minister N P Saud defended the renewal, noting it followed the same guidelines and modality adopted in 2019 and that all funds flow with the Nepal government's approval.

The debate resurfaced in February 2026, when Nepali ministries split over whether HICDP money should be extendable beyond local governments: the finance and federal affairs ministries favoured channelling such aid through the national budget to federal and provincial projects, while the foreign ministry opposed widening the window. For requesting communities, however, the calculus is simpler — HICDPs remain one of the fastest routes to a funded school building or health post, which keeps demand far ahead of supply.