Synopsis Destinies of no other two countries in the world are so closely intertwined as that of India and Nepal. Geography more than any other factor is the most important determinant in their relations. Lying on the southern slopes of the Himalayan ranges, Nepal cannot escape from being part of the Indian subcontinent. It is no wonder that the leaders of the two countries are never tired of swearing by age-old ties of history, geography, brings into sharp focus a mismatch in this relationship. Created misunderstanding between them. This resulted in confidence deficit in their relations. If despite a liberalized trade and transit regime that New Delhi afforded to Nepal and a generous economic cooperation programme, Kathmandu was niggardly in sharing the security concerns of India and measly in extending cooperation in harnessing the water resources of the Himalayan rivers that would not only bring prosperity to Nepal but bring to an end India’s search for energy security, then there must be something amiss in their understanding of each other’s perceptions. The documents gathered here bring out the misperceptions of one about the other over the past five decades. Both need to engage in a serious exercise for confidence building to create a fund of trust. Trust cannot be bargained. It comes only by trust. Let the past not be the enemy of the future but the beckoning light. China-Nepal relations on the other hand present a picture in contrast. Nepal conveniently ignores the fact that China even though a contiguous neighbour is a distant neighbour as demonstrated by the events of last half-a-century. No country can run away from the dictates of history and geography. It is time that Nepal makes peace with these facts and recognizes that its relations with India must be different if not special, vis-?-vis China.