Nepal and Iceland established diplomatic relations on May 25, 1981. Iceland is the 79th country to form bilateral ties with Nepal.
The Embassy of Nepal in Copenhagen, Denmark, is concurrently accredited to Iceland, whereas the Embassy of Iceland in New Delhi, India, is concurrently accredited to Nepal.
The President of Nepal received the Letters of Credence from the non-resident Ambassador of Iceland to Nepal Guðmundur Árni Stefánsson, on February 14, 2020, bringing the countries closer.
Iceland extended humanitarian assistance in the aftermath of the 2015 earthquakes. Iceland donated 10 million Icelandic Kronas through the International Red Cross and Red Crescent Societies. Nepal and Iceland have worked together on issues of mutual interest, including climate change and sustainable development, in international forums.