State structure has always to deal with ethnic realities rooted in specific territories within a single State. Various public law studies have shown that, to face this problem, the preferable level of government is not a centralised but a decentralised one. Today federalism is considered one of the privileged solutions for the administration of power. However, especially in transitional democratic realities, federalism may cause conflict between national and local identities. In this regard, it is interesting to highlight the current experience of Nepal which, after becoming a Democratic Republic, has created a Constitution inspired by the Indian model, with the aim of rationalising governance and mitigating conflicts. The essay will analyse the state structure and power-sharing of a more stable and long-lasting democracy like India, and the influence it had on a new democracy (Nepal), to highlight the pragmatic possibility through which local and national identities can coexist.