The bandhgala and the Nehru jacket are close relations and easy to mix up. Both have a stand collar, both are short, neither has lapels. What separates them is collar height and jacket length, and the difference in formality that follows from those two things. It matters, because the two garments send different messages and turning up in the wrong one is a small mistake that people notice without quite knowing why.
The collar tells you everything
Collar height is the real technical difference. A bandhgala collar rises 3.5 to 4.5 cm off the neck seam, a band with a definite formal presence. A Nehru jacket collar is lower, 2 to 3 cm, which gives a band that sits back and asks for less attention.
That centimetre and a half changes the whole register. The taller bandhgala collar closes the neck precisely and formally, doing much the same job as a shirt and tie. The lower Nehru collar leaves the neck more open and reads as easier, without ever tipping into casual. Look at the collar first and you'll never confuse the two again.
Which jacket belongs at which occasion
The bandhgala belongs at: formal meetings, occasions where Western business-formal would be the standard, receptions and dinners where a suit is expected, political and diplomatic functions, and on any professional who wears Indian dress to work as a matter of course.
The Nehru jacket belongs at: smart-casual work, relaxed festive occasions, over a shirt with Western trousers, at concerts, gallery openings and creative offices, and anywhere a bandhgala would be one notch too much. It's also the natural choice for Indo-Western dressing, worn over a Western shirt, where the bandhgala's formality would sit awkwardly.