This paper would focus on the fault-line of Indian Neighbourhood Policy particularly in the context of its handling of Nepal’s Constitutional Crisis Post-2015. In the light of the statement of former Indian Prime Minister Vajpayee, ‘friends can change but not neighbours who have to live together,’ it can be easily inferred from this statement that the neighbourhood policy is holding a very significant place in Indian foreign policy. Since independence, India has been pursuing ‘Neighbourhood Policy. The incumbent government has also conceived 'Neighbourhood First' policy under the visionary and dynamic leadership of PM Modi, but the irony is that notwithstanding this policy, India has recently lost its geopolitical space in Nepal despite such policy. On the contrary, China has made its geopolitical space in Nepal.