This routine, said EFSAS, is not new. In fact, the infamous Pakistani spy agency is practicing it for decades. It started in the mid-90s.

"ISI’s use of Nepal as a veritable second front to target India through use of terrorist proxies began in the mid-to-late 1980s and has continued with varying intensity till today," EFSAS said.

"The early successes that the ISI achieved in using the country as a transit point for movement of Khalistani terrorists to and from India emboldened it to expand the scope of its anti-India operations to include trafficking of explosives, weapons, and fake currency in huge quantities by the mid-1990s.

"The near absence of resistance from the ill-equipped, ill-trained, and inexperienced security apparatus that Nepal possessed during this period also contributed to the ISI’s confidence," it said.

Though with the help of India, Nepal has managed to seize control, ISI still manages to run its operation.

Unlike its neighbour India, Pakistan has never had a great diplomatic relationship with Nepal, inking a bond with the latter on 29 March 1960, 13 years after its independence and 10 years after New Delhi signed a pact with Kathmandu.

Yet, for some inexplicable reasons, Islamabad has posted seven diplomatic officers in Nepal, and another 15 to 20 staff members to support them.

If reports are to believed, most of these members are ISI agents, working incognito.

...the Pakistani Embassy in Kathmandu has traditionally had a disproportionately large number of diplomatic officers and support staff. As many as 7 diplomatic officers are currently posted in the Embassy, and they have between 15 to 20 staff members supporting them. Reports indicate that a sizeable proportion of these officers and staff are actually representatives of the Inter-Services Intelligence (ISI), the infamous Pakistani spy agency that is the sponsor or benefactor of a significant number of the terrorist organizations active in South Asia. These ISI officials, since the late-1980s, have used Nepal as the staging point for infiltrating Khalistani, Kashmiri and Pakistani terrorists as well as Afghan and Arab mercenaries into India to carry out violent attacks there.

-EFSAS

According to the think tank, the Pakistani spy agency uses its national airline, Pakistan International Airlines (PIA), to carry out a number of illegal works, including the smuggling of explosives.

"Large amounts of RDX and other explosives as well as arms and ammunition were brought into Nepal by the ISI and then smuggled into India. The preferred method of bringing the explosives and weapons into Nepal from Pakistan was reportedly using flights of the Pakistan International Airlines (PIA) to Nepal. An inordinately high frequency of 4 commercially unviable weekly PIA flights operated on this sparsely used sector. The average occupancy of each of these flights was only 30 passengers," it said.

Apart from infiltrating India and supplying militants with explosives and ammunition, the ISI also smuggles fake Indian Rupees, using the Indo-Nepal border.

"Another specialization acquired by the ISI in Nepal was the trafficking of huge amounts of fake Indian currency produced at sophisticated ISI-created printing units. Reports, quoting the statements of arrested terrorists and fake currency couriers, suggested that the fake Indian currency was printed at the Pakistani security presses at the Malir cantonment in Karachi, and at Lahore, Quetta and Peshawar, and was transported to Nepal, Bangladesh, and even Thailand by PIA flights. The ISI utilized these counterfeit notes to finance its terrorist and other operations against India."

Despite its high work rate in Nepal, Pakistan's official stake in the Hindu regime is surprisingly low.

The think tank said that it is due to ISI's activity that it forced upon Nepal "...the ignominy of becoming the country in which the highest number of diplomatic and other Embassy officials have been apprehended while indulging in terrorism-linked activities, as against espionage."

ISI's disturbing activity in Nepal can be backtracked via a 1997 cable by Frank Wisner, the then US Ambassador to India.

"The cables unambiguously stressed that the ISI had created various terrorist fronts to carry out violent attacks in India, which included bomb blasts in commercial markets such as Connaught Place and Lajpat Nagar in New Delhi and other cities across the country. The cables disclosed that one such organisation created by the ISI in Pakistan was the Jammu and Kashmir Islamic Front (JKIF), which had a strong base in Kathmandu," EFSAS said.

To dispatch men and material and to execute explosions in India, Kathmandu was invariably made the nodal point and JKIF exploited the vulnerable Kathmandu-based Kashmiri businessmen for such activities since they had a readymade and clean past. JKIF kingpin Javed Krawah himself used to run a carpet business in Kathmandu.

-Frank Wisner, former US Ambassador to India.

He further informed that the JKIF was controlled from Pakistan by the ISI and Tiger Memon, the prime accused in the 1993 serial Mumbai blasts.

"Their contact in Pakistan-occupied Kashmir (PoK) was Bilal Beg, who was running an indoctrination camp near Muzaffarabad, funded extensively by the ISI to carry out terrorist acts in India. One Colonel Farooq of Pakistan ISI tasked Bilal Beg and Tiger Memon to utilize Kathmandu-based activists Lateef and Javed Krawah to set off blasts in Delhi before the Lok Sabha elections", the Ambassador revealed.

Another mention of ISI's activity can be found in a 2000 report by global intelligence company Stratfor.

The ISI is effectively exploiting Nepalese territory to mount major terrorist offensives against India by providing human, material, and logistic support to the various militant groups - Kashmiri, Sikh, and north-eastern. Today, Kathmandu has become a big meeting point for training and distributing arms to these anti-India militant groups. According to our sources in the region, Pakistan has also developed a strong smuggling/criminal infrastructure in Nepal.

-Stratfor report.

"The seizure of hundreds of kilograms of explosives (RDX) by the Nepalese and Indian border police, the large-scale circulation of fake Indian currency notes, and the hijacking of an Indian airliner while enroute from Kathmandu to Delhi last year clearly show how far the ISI has consolidated its presence in Nepal. Intelligence reports also say that the officials posted at the Pakistan embassy in Kathmandu are actively involved in motivating and financing agents in these activities.

"The ISI is also trying hard to exploit the rising nationalist sentiments in Nepal with the purpose of creating friction between Kathmandu and Delhi.

"Sources further reveal that since the advent of multiparty democracy in Nepal, Pakistan has cultivated a number of leaders by providing them with funds and various other forms of assistance. The increasing voices for a Greater Nepal (which demand the restoration of territories ceded by Nepal to India under the 1816 Treaty of Sugauli) can also be attributed to the proactive efforts of the ISI.

"In order to undermine Indian influence in Nepal, the ISI is also manipulating the Nepalese press which has taken an unusually anti-Indian bent in the recent past. Some reports suggest that several newspapers and other media outlets are receiving funds from the ISI," it said.

The spy agency has also been actively helping the Muslim community in Nepal build mosques and madrashas. In a span of five years, from 1991 to 1995, as many as 50 new mosques and madrashas were constructed in the four small Nepalese districts of Rupandehi, Kapilvastu, Bardiya and Banke.

The aim, it said, was to successfully propagate anti-India sentiments among Nepalese citizens.

"The ISI also organized visits of Tabligh Jamaats to Nepal from Pakistan on a regular basis. Involvement in such activities enabled the ISI to establish patron-like relations with important Muslims organizations in Nepal such as the Jamaat-e-Milli-e-Islamia (JMI), Nepal Islamic Yuva Sangh (NIYS) and Nepal Muslim Ittehad Sangh (NMIS) that were beholden for the financial support that they received from the ISI. JMI and NMIS were closely associated with the Islamist Jamaat-e-Islami (JeI) party of Pakistan.

"The ISI, during this period, also significantly expanded its outreach amongst influential Nepalese Muslims, some of whom became their trusted assets and played vital roles over the years in enabling the ISI to carry out its anti-India agenda," it said.

Reports also reveal that some of the madrassas that had sprouted along the India-Nepal border were used by the ISI to shelter Khalistani and Kashmiri terrorists waiting to be inducted into India, as well as for storing explosives and arms and ammunition meant for these terrorists. Azizuddin Sheikh alias Sattar, an ISI-trained gangster of the Mumbai underworld who was in June 1999 arrested near the India-Nepal border in Uttar Pradesh, revealed to the Indian security forces that at the behest of the ISI the Siraj-ul-Uloom madrassa in Kapilbastu district of Nepal was being used by Chhota Shakeel, the trusted lieutenant of Dawood Ibrahim, and his associates to store AK-47 rifles and other automatic weapons meant to be smuggled into India and used to assassinate influential Indian political figures.

According to a BBC report, the ISI has also tried its hand at wooing the Nepalese Maoist.

In a 2006 report, the British outlet quoted former Nepalese Prime Minister and prominent Maoist leader Pushpa Kamal Dahal aka Prachanda as saying: "Since we started our people's war, we had been hinted time and again by the ISI, sometimes directly and at times obliquely, that it was ready to lend its hand in terms of weapons supply and others, but we bluntly refused. Accepting such an offer would have been against the self-respect and sovereignty of the people of Nepal".

The report further said: "Critics say it runs 'a State within a State', subverts elected governments, supports the Taleban and is even involved in drug smuggling."

The think tank, citing security analysts, has said that one way to end the ISI's menace is by reviewing the open border between India and Nepal.

However, given the special relations India and Nepal enjoys, the former's government has resorted to bolstering its defence as opposed to changing its visa and border rules.