Nepal has become the third country in India's immediate neighbourhood to see a violent uprising topple its government in recent years.
Prime Minister KP Sharma Oli resigned after more than 20 people died in clashes with police during anti-government demonstrations triggered by a social media ban.
A nationwide curfew is in place and the army is attempting to bring the situation under control after protesters stormed parliament and set fire to the homes of several politicians.
For many, the scenes in Kathmandu were reminiscent of the turmoil that gripped Bangladesh last year and Sri Lanka in 2022.
Though Bangladesh and Sri Lanka are also India's close neighbours in South Asia, Delhi's relationship with Kathmandu is special because of historic people-to-people, economic and strategic ties.
Nepal shares a largely open border of more than 1,750km (466 miles) with five Indian states; Uttarakhand, Uttar Pradesh, Sikkim, Bihar, and West Bengal.
Delhi is keenly watching developments across the border, with Indian Prime Minister Narendra Modi swiftly reacting to the unfolding events.
The violence in Nepal is heart-rending. I am anguished that many young people have lost their lives, Modi wrote in a post on X.
Stressing that stability, peace and prosperity of Nepal are of utmost importance, he appealed to all my brothers and sisters in Nepal to support peace.
Modi also chaired an emergency security meeting with his cabinet colleagues to discuss the situation. Much like it was caught off-guard by the uprising in Sri Lanka, analysts say India was taken by surprise by the developments in Nepal, with Oli resigning just a week ahead of a planned visit to Delhi.
Any instability in the country is a cause of concern for India because of Nepal's strategic location. The Western Theatre Command of China sits right across Nepal. The route to the Indo-Gangetic plains comes straight through Nepal, Maj Gen (Retd) Ashok Mehta, an expert on Nepal, told the BBC.
The unrest also has implications for the large Nepalese diaspora in India. An estimated 3.5 million Nepalis work or live in India, but experts say the actual number could be much higher.
Nepal is predominantly a Hindu-majority country and communities across the border have close family ties. People travel between the two countries without a visa or passport.
Nepal is also home to several important Hindu holy sites, which are visited by thousands of Indian pilgrims every year.
Meanwhile, Kathmandu depends heavily on Indian exports, especially oil and food, with India-Nepal annual bilateral trade estimated at $8.5bn (£6.28bn).
While a fragile sense of calm returned to Kathmandu on Wednesday, experts say India will have to walk a diplomatic tightrope, as there's widespread anger among Nepalese protesters at all three major political parties that have ruled the country.
It’s uncertain what kind of administration will replace Oli, one that is also acceptable to the protesters. Since the shape of the new government is uncertain, India will be cautious, Prof Thapliyal states.
Given the Himalayan nation's strategic location, both India and China are vying for influence in the country, leading to accusations that the two are meddling in Nepal's internal affairs.
With the South Asian Association for Regional Co-operation (SAARC) remaining dormant, India faces the challenge of addressing the political changes and instability in its neighborhood, especially as relations with Pakistan and Bangladesh are currently strained.
Experts stress that India should actively consider increasing opportunities for Nepalese students and job seekers to strengthen ties with the younger population amidst the unrest.
