Over the last century many Nepalis migrated to the south of Bhutan and now comprise so much of the population there that the term Lhotshampa (southern Bhutanese) is synonymous with Nepali-speaker. In the late 1980s, in an effort to protect what it saw as a threatened national identity, the Bhutanese government conducted a national census to identify illegal immigrants. Thousands of ethnic Nepalis lacked proper documentation to prove family residence before 1958. An air of fear and insecurity permeated the south and a series of violent acts there led to an exodus. To what extent the migration was voluntary or not is still a matter of fierce debate but by the end of 1992, some 80,000 Nepali-speakers, who said they were from Bhutan, were housed in camps organised by the UN High commissioner for Refugees (UNHCR).

Bhutan and Nepal agreed that they would settle the problem on a bilateral basis but not much progress has been made. If the deadlock is not broken, it is likely that those in the camps, mostly former farmers, will enter the larger diaspora of Nepali-speakers in South Asia.