Political Relations
Diplomatic relations between Nepal and the Federal Republic of Germany were established in 1958. Since then the relations between Nepal and Germany have been growing on the foothold of friendship, mutual understanding and cooperation.
Both the countries have established residential Embassies in each other’s capital cities. Nepal established is Embassy on 05 July 1965. The Federal Republic of Germany has been maintaining an Embassy in Kathmandu since 1963.
Visits
Exchange of visits at various levels has contributed to strengthening the close and cordial relations between the two countries. Since the restoration of democracy in 2006, high-level visits have become more frequent.
From the Nepali side
In connection with the Nepal Investment Year 2012, Minister for commerce and Supplies Hon. Lekh Raj Bhatta visited Berlin, Germany on 28th February 2012 leading a high-level delegation comprising the members from the Government, Investment Board, Nepal German Chamber of Commerce (NGCCI) and the Business community.
The then Foreign Minister Mr. Upendra Yadav visited Germany in March 2009 leading a delegation.
In October 1986, late King Birendra and late Queen Aishwarya paid State Visit to Germany.
The then Prime Ministers Girija Prasad Koirala (in Feb 1995, September 2000), Man Mohan Adhikari (in April 1995) and Mr Madhav Kumar Nepal (when he was Deputy Prime Minister and Minister for Defence and Foreign Affairs (in Feb 1995), various Foreign Ministers and other high dignitaries of Nepal visited Germany.
From the German side
On the German side, a German delegation headed by Ms Gudrun Kopp, the State Secretary to the German Federal Minister for Economic Cooperation and Development visited Nepal from March 5 to 10, 2012. The visit culminated upon an agreement between Ministry of Finance and KfW in which Germany pledged 10 million Euro for the health sector of Nepal.
Cooperation in the aftermath of Earthquake 2015
Following the earthquakes in 2015, the Federal Foreign Office of Germany provided immediate relief equivalent to EUR3.5 Million (plus EUR 1 million also from BMZ) through various channels, especially the INGOs.
The German Government pledged the support of EUR 30 million for reconstruction works to be spent under the declared priority sectors, mainly in the health sector. It is estimated that around EUR 120 million was mobilized by the NGO and private sector to support the earthquake affected people.
Development cooperation
The Federal Republic of Germany is one of the major donors for Nepal’s development efforts. Germany began its development cooperation to Nepal in 1961 with the technical assistance for the establishment of a Technical Training Institute at Thapathali. In 1964, it provided soft loans to Nepal Industrial Development Cooperation (NIDC).
In the years to follow, Germany supported Nepal in the fields of power generation, agriculture, town development, preservation of monuments and temples, tourism, education and culture, solid waste management, promotion of small business projects, etc.
Taking cognizance of the developments and peace process since 2006, the German Government has significantly increased its funding for development cooperation with Nepal. Germany has been supporting in the peace process through advisory activities and participation in the Nepal Peace Trust Fund, a funding instrument to finance the agreements reached under the 2006 Comprehensive Peace Accord. Germany also provides assistance in the form of concrete vocational training and further-education measures for former Maoist rebels, thus making an important contribution to their reintegration into society.
The principal implementing agencies of government development cooperation are the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the KfW Development Bank. There are also more than 120 private initiatives and associations from Germany supporting projects and programmes in Nepal, in some cases with public funding.
Effective from January 1, 2011 and pursuant to the merger agreement sided on 16 December 2010, German international technical cooperation (GIZ) now operates as a merged entity of former DED, InWEnt and GTZ..
Beyond its bilateral commitment, Germany also makes a substantial contribution through international organizations – in particular the EU and the World Bank.
The most notable financial assistance from Germany for a single project has been that of DM 250 million for Middle Marsyangdi Hydroelectric Project. It is a daily poundage run-of-river scheme with an installed capacity of 70 MW and an average annual energy generation of 398 GWh. This Project was funded by KfW (Germany), Government of Nepal and the Nepal Electricity Authority. The estimated cost of the Project is about 13.65 billion rupees.
The latest round of Nepal-German Negotiation on Development Cooperation was held at the Ministry of Finance in June 2012.
Trade
Germany is Nepal’s third largest trading partner after India and the US, and the biggest export market for Nepali products in Europe. Germany is an important market for Nepal, particularly for carpets and textile products. Nepal’s main imports from Germany are machinery and industrial products. In recent years, the bilateral balance of trade has regularly shown a surplus in Nepal’s favour. The annual volume of bilateral trade has remained fairly constant over the last few years, at around EUR 50 million.
An investment protection agreement has been in place since October 1986. Founded in 1990, the Nepal-German Chamber of Commerce and Industry (NGCCI) in Kathmandu promotes bilateral trade relations.
Besides carpet, export to Germany from Nepal include handicraft, silver jewellery, garments, leather, wooden and bamboo goods, lentils, tea, essential oils from herb and aromatic plants.
Nepal imports mainly industrial raw materials, chemicals, machinery equipment and parts, electric and electronic goods, vehicles etc. from Germany.
Nepal’s Trade with Germany:
(Value in Nepalese Rupees)
| Year | Export | Import | Balance |
| 2012 | 2,633,269 | 3003107886 | -369838229 |
| 2013 | 3,192,617 | 1536568785 | -183560658 |
| 2014 | 3,259,289 | 5,513,004 | -2,253,715 |
| 2015 | 3,069,458 | 9,159,969 | -6,090,511 |
| 2016 | 1,520,609 | 2,393,323 | -872,714 |
At present, there are 15 Nepal-German joint venture projects.
Scientific and Academic Cooperation
Nepal is also a priority country for the German Research Foundation (DFG) with more than 40 research projects operated in Nepal so far, including a major project by the University of Hamburg to catalogue some 160,000 Nepalese (Tibetan and Newari) manuscripts, which were able to be microfilmed with German support between 1970 and 2002.
Heidelberg University’s South Asia Institute has its own local office in the country.
Besides GIZ and KfW, some other organizations also have substantial engagement in Nepal. In addition to the program run by GIZ,/InWEnt, the Deutscher Akademischer Austausch Dienst (German Academic Exchange Service, DAAD) offers scholarships and long-term training programs not only for German but also for Nepali students, particularly in postgraduate programmes of special relevance to developing countries. Students returning home from Germany have since established a number of alumni organisations and networks of former scholarship holders.
Cultural preservation and exchange
Germany’s Federal Foreign Office has funded projects to restore sites of cultural or religious significance in Nepal, including in the cities of Patan and Bhaktapur in the Kathmandu Valley. German archaeologists have also done important research work through their excavations. A cultural agreement between Nepal and Germany was signed in 1992.
As part of the network of globally operating Goethe Institutes, the Kathmandu Goethe Centre teaches German as a foreign language. The courses it offers are very popular with young Nepalese, who are also increasingly interested in studying in Germany. In addition, German has been taught for many years at Tribhuvan University in Kathmandu and, since 2010, also as second foreign language at two schools in Kathmandu under the Schools: Partners for the Future initiative (PASCH).
Tourism
Germany has been organizing ITB Berlin every year which stands to be the world’s largest tourism fair. This year, it was held on March 12, 2017. And this marked the thirtieth year of Nepal’s participation in the fair. A wide array of 24 Nepali tourism related companies under the coordination of Nepal Tourism Board, private businessmen/women and 6/7 private companies had showed up in the fair. As such, Germany remains important for the promotion of Nepal’s tourism industry.
A list below depicts the recent trends of tourist arrivals from Germany:
| Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Tourists | 16,397 | 22,583 | 25,154 | 24,575 | 22,263 | 18,028 | 12,728 |
Source: Ministry of Foreign Affairs