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Friendship treaties were signed with the Dominion of India in 1950 and the People's Republic of China in 1960.Nepal hosts the permanent secretariat of the South Asian Association for Regional Cooperation (SAARC), of which it is a founding member.Despite these challenges, Nepal is making steady progress, with the government declaring its commitment to elevate the nation from least developed country status by 2022.Nepal also has a vast potential to generate hydropower for export.The Shah dynasty established the Kingdom of Nepal and later formed an alliance with the British Empire, under its Rana dynasty of premiers.The country was never colonised but served as a buffer state between Imperial China and Colonial India.Local legends have it that a Hindu sage named "Ne" established himself in the valley of Kathmandu in prehistoric times, and that the word "Nepal" came into existence as the place was protected ("pala" in Pali) by the sage "Nemi".
Nepal is the learned Sanskrit form and Newar is the colloquial Prakrit form.Bordering China in the north and India in the south, east, and west, it is the largest sovereign Himalayan state.Nepal does not border Bangladesh, which is located within only 27 km (17 mi) of its southeastern tip.Kathmandu is the nation's capital and largest city.Nepal is a multiethnic nation with Nepali as the official language.
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The Kathmandu Valley in central Nepal became known as Nepal proper because of its complex urban civilisation.