New Delhi: India and close neighbour Nepal sought to re-script their ties and dispel the unease of the past few months, as new Nepalese Prime Minister Pushpa Kamal Dahal 'Prachanda' held talks with Prime Minister Narendra Modi who described the bilateral relationship as "time-tested and unique".
Both sides inked three agreements, including one on a credit line of $750 million from India to Nepal, and decided to speed up infrastructure and hydropower projects in the Himalayan nation.
"Our friendship is time-tested and unique. As immediate neighbours and close friendly nations, peace, stability and economic prosperity of Nepal is our shared objective," Modi said, in his media statement after holding talks with Prachanda.
The Nepalese prime minister, who arrived here on Thursday on a four-day visit, has chosen India for his first overseas tour -- lending significance to the ties. During his last stint as prime minister (2008 to 2009), the Maoist leader had chosen to visit northern neighbour China, which has been trying hard to stamp its presence in Kathmandu.
Modi, while commending Prachanda's role in "strengthening democratic institutions in Nepal", remarked on the strategic nature of the relations, saying the security interests of both countries are inter-linked.
"India stands ready and prepared to strengthen development partnership with Nepal. We will do so as per the priorities of the people and government of Nepal," he said.
Modi said that continued cooperation between their defence and security agencies is important to guard the open borders.
Prachanda, who took over last month after the China-friendly KP Oli government lost support, said Nepal is determined to forge an enduring partnership with India for its own development and prosperity.
He said he had exchanged views with Modi on taking concrete steps to elevate ties with India to new heights in all spheres.
"We exchanged views on our respective 'neighbourhood first' policies and agreed that this common orientation in our policies should lead to a greater and mutually beneficial partnership for 21st century based on trust and open dialogue," Prachanda said.
While stressing Nepal's friendly ties with India, Prachanda said he expressed the view that trust and confidence were the pre-requisites of strong and sustainable friendly relations.
And to ensure this, "we should respect each other's sensitivities and concerns in a spirit of good neighbourliness".
Among the agreements inked was one on an Indian credit line of $750 million to Nepal for post-earthquake reconstruction. This is over and above the $1 billion aid that India announced following the devastating earthquake in the Himalayan nation in April last year that claimed over 8,000 lives.
The two sides also signed a memorandum of agreement (MoU) for project management consultancy services for upgrade and improvement of road infrastructure in Terai area of Nepal.
Another agreement was signed on the first amendatory dollar credit line for post-earthquake reconstruction projects in Nepal.
Foreign Secretary S Jaishankar described Prachanda's visit as "very productive" and "warm".
He said that talks focused on hydropower projects, including the Pancheswar project on rive Mahakali in Nepal.
Air connectivity, goods and power trade figured in the talks.
Tourism came up for discussion and the two sides explored the possibility of joint promotion of the Buddhist circuit.
Prachanda briefed the Indian side about the new Nepalese Constitution and the political processes in Nepal.
"He conveyed that the government is in the process of bringing all sections of Nepal on board for the constitution," Jaishankar said
Ties between both sides had soured last year after the promulgation of the new Constitution in September, which Madhesi and Janjati people living in the Terai region, bordering India, said ignored their rights. A five-month-long border blockade by the Madhesis, which Kathmandu blamed on India, starved Nepal of essential fuel and other supplies from India and saw bilateral ties nosedive sharply.
The Maoist-led government of Prachanda assumed power last month after the ouster of KP Sharma Oli as Prime Minister.
India is hoping to bring back the shine in ties with Prachanda at the helm.
Earlier on Friday, Prachanda was accorded a ceremonial welcome at the Rashtrapati Bhavan.
Following this, External Affairs Minister Sushma Swaraj called on him at the Rashtrapati Bhavan.
In the afternoon, Finance Minister Arun Jaitley and Minister of State for Power Piyush Goyal also called on the Nepal Prime Minister before he made a call on President Pranab Mukherjee
China's President Xi Jinping is expected to visit Kathmandu in October, while Indian President Mukherjee is visiting in early November.