Using Indian debit cards in Nepal

Yes!

I hold an HDFC Debit card which is an Indian bank as well and I was able to use it in Nepal a year ago. However, before using it internationally you may I had to activate the card for International Usage and set its limit for international usage.

You may use it freely for making payments as well as for withdrawing cash from ATMs in Nepal. The currency may be local what you will be withdrawing from there. There might be some charges that you may have to bear such as cross-currency mark-up charges on foreign currency transactions and charges for non-use at Non bank international ATMs.

Do check this out with your bank.