Nepal Prime Minister Balendra Shah has reignited attention on the decades-old India-Nepal border dispute after remarks in Parliament appeared to suggest that Nepal had learnt of “encroachments” involving Indian territory.Shah said that, “The Nepal government has officially sent a diplomatic note to India, mentioning the issue of encroachment of territories by India, including Lipulekh, and we have already received their response.”“Both the countries have agreed to resolve the issue sitting together with the help of historians, surveyors and concerned experts through diplomatic means,” he said.The comments triggered a row and prompted Nepal’s foreign ministry to issue a clarification, saying Balendra Shah was referring to cross-border occupation and no-man’s land encroachments rather than any formal territorial claim.The episode has once again put the spotlight on the long-running dispute over Kalapani, Lipulekh Pass and Limpiyadhura, a strategically sensitive region claimed by both countries.Why is there a dispute?At the centre of the disagreement is a remote Himalayan region located near the India-Nepal-China tri-junction.The dispute traces its origins to the Treaty of Sugauli, signed in 1816 after the Anglo-Nepal War. The treaty designated the Kali (Mahakali) River as Nepal’s western boundary. However, it did not clearly identify the river’s source, a gap that continues to shape competing territorial claims.Nepal argues that the river originates at Limpiyadhura, which would place Kalapani, Lipulekh and adjoining areas within Nepal. India maintains that the river begins near Kalapani, placing the disputed territory on the Indian side of the border.Historical maps from the early 19th century have been cited by Nepal to support its claim. India, however, points to administrative control exercised over the area since the British era, when maps gradually began treating the Kalapani spring as the river’s source. Following Independence in 1947, India inherited control of the territory.How did the issue become more prominent?The dispute gained strategic significance after China’s takeover of Tibet and the Sino-Indian war. Given the region’s proximity to Tibet and the importance of Lipulekh Pass, India strengthened its security presence in the area.For decades, the issue remained largely dormant. Nepal began raising it more formally in the 1990s and stepped up its objections in recent years.Kathmandu objected to the India-China understanding on Lipulekh Pass in 2015, protested India’s 2019 political map and opposed the inauguration of the Dharchula-Lipulekh road in 2020. In response, Nepal unveiled a new political map incorporating Kalapani, Lipulekh and Limpiyadhura within its territory.Since then, the dispute has remained a recurring point of friction, although both sides have repeatedly stated that it should be resolved through dialogue.Why is the region important for India?The disputed area sits at a strategically important junction connecting India, Nepal and China. Its high-altitude terrain offers commanding views of surrounding approaches, making it valuable from a surveillance and border management perspective.Control of the Kalapani sector allows Indian forces to monitor activity around Lipulekh Pass and adjoining areas near the Tibetan plateau. In mountain warfare, such vantage points are considered critical for observation, logistics and early warning.Lipulekh Pass itself is strategically significant because it can facilitate movement of personnel and supplies in a border contingency. India has invested in infrastructure projects in the region, including the Dharchula-Lipulekh road, to improve connectivity and access to forward areas.The pass also has religious importance. It serves as one of the key routes for the Kailash Mansarovar Yatra, undertaken annually by Indian pilgrims travelling to Tibet.As a result, India views the issue through the lens of border security, military preparedness, infrastructure connectivity and religious access, while Nepal continues to maintain that historical evidence supports its territorial claim.