I found it really hard to find any useful information on doing this. Everyone loves to say how hard it was, but noone explained the process. I finished the process on Oct 15 2012 and thought I'd lay it out.
The Indian Embassy is open 9.30am-12pm and is about 10 minutes walk from tourist centre Thamel. Just ask for directions or check out a map to get there. It's easy to find. You'll need your passport, a passport photo, a photocopy of your ID page in your passport, and a photocopy of your Nepalese visa within your passport. You'll also need some rupees, Rs4,150, as they don't accept USD. If you don't have the photo/photocopies, there is a booth next to the embassy that does it cheaply and quickly.
It's a 3 step process, across two days with a 5 day wait between the two days, with you having to go into the embassy each time. Each time is quite a long wait and overall it's pretty frustrating as its hard to extract information from the officials and they aren't really there to help, unless you're happy to fork out your precious rupees for the pleasure.
Day 1 is all about sending a Telex to your home country. You'll need to get there early, say 8am or earlier, to ensure you aren't too far down the queue. The doors will open at 8.30am and you'll head into a waiting area. There is a touch screen ticket issuing stand on the way in. Follow the instructions and get our ticket. You're now in the official queue. Grab an application form from the desk, complete it and take a seat. Youre in for a bit of a wait. The actual desk itself will open at 9.30am, now it's just a matter of waiting for your turn. The guy behind the first desk will check your passport and paperwork before giving you a few more forms, an application form and a receipt. You only need to complete the receipt now, but might as well do both. This first desk is the best time to stress the point if you're after a 6 month visa. A couple of people I talked to had gone for 6 months and been given 3 with no reason given.
The second desk doesn't require a ticket number, you just rock on up to the queue and pay your Rs300 to pay for the telex to be sent. Once you're done here, your first visit is over. You'll now need to wait 5 days before your second visit for the telex to be sent and returned. The date you can return on will be displayed on the whiteboard on the right of the counter. If you want to come back later than 5 days, it's no problem. You're free to go off trekking and do the second day when you're back.
The second day starts as a repeat of the first day. Get your number and wait for the first desk. He'll hand over a receipt for you to fill out and you head to the second desk. This time it'll cost Rs3,850 (Rs3,600 for the application an Rs250 processing fee). The guy at the second desk will take everything from you and give you your copy of the receipt.
The third and final step is to come back at 5pm that day. This is not an organised queue but just a free for all with everyone trying to get their passport and get the hell out of there. This bits pretty easy, just a bit more waiting really. Once your got your passport from the counter you're all done. The visa will start from the day of issue. Congratulations!
Note, most people will recommend you get the visa from your home country to make this easier. Having never done that I can't comment, but we needed to do this as we were travelling beforehand and had to have the date of issue just before we arrived in India.
Another note, you can make the waits much smaller for part 1 and 2 by bribing the guard. They'll be happy to help you jump way up the queue for the right price. I don't like this kinda stuff so didn't try it. I heard you can also bribe your way in through the front gate if you get there after it closes.
Any questions, ask away!
