Looking at further expanding bilateral ties, external affairs minister Sushma Swaraj on Saturday held talks with her Nepalese counterpart Mahendra Bahadur Pandey in Kathmandu on a range of issues and resolved to push for more cooperation in areas such as trade, investment and security.
At the outset, Pandey warmly greeted Swaraj and hoped that her visit will help in further cementing ties between the two countries.
In the meeting, both the leaders noted that there is lot of scope for expansion of cooperation between the two nations and agreed to work on in this direction.
Foreign secretary Sujatha Singh and a number of top officials from the ministry of external affairs were also present in the meeting.
The detailed discussion on specific issues will be taken up at the Joint Commission Meeting (JCM) which is taking place after a gap of 23 years.
WATCH: Nepal is high on priority for the new government: Sushma Swaraj
The JCM, to be co-chaired by both Swaraj and Pandey, will have five clusters - political, security and border issues; economic co-operation and infrastructure; trade and transit; power and water resources; and culture, education and media.
Soon after her arrival in Kathmandu on Friday, Swaraj had said Nepal stands high on the priority list of the new Indian government and the testimony to it is her visit here within two months of assuming office of external affairs minister.
"The meeting for which I have come, you will be surprised to know, is taking place after 23 years. It reflects that for the new government, Nepal stands high on priority list.
"I have come here with lot of hopes and expectations and I think through the visit, India-Nepal relations will be further strengthened," she said on Friday.
Swaraj's visit is also expected to prepare the ground for a two-day visit by Prime Minister Narendra Modi next month.
Modi will arrive here on August 3 on an official trip, the first bilateral visit by an Indian premier in over 17 years. In 1997, then prime minister IK Gujral had visited Nepal.
Swaraj will also call on top leadership including Prime Minister Sushil Koirala and hold meetings with leaders across the political spectrum, including Maoist leader Prachanda.
Even though the meeting of JCM is taking place after a long period, India has 25 bilateral mechanisms with Nepal where both are interacting on a regular basis.
At present, the annual bilateral trade is approximately $4.7 billion and India accounts for 47% of foreign direct investment in Nepal.
As close neighbours, India and Nepal share a unique relationship of friendship and cooperation characterized by open borders and deep-rooted people-to-people contacts. There are six million Nepalese workers in India. Annually three thousand Nepalese are provided scholarships by India.
There has been a long tradition of free movement of people across the borders. Nepal shares a border of over 1850kms to the south with five Indian States - Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.
External affairs minister in the UPA government SM Krishna had visited Nepal in January 2010 and again in April 2011. Then finance minister Pranab Mukherjee had visited Nepal in November 2011.
The India-Nepal Treaty of Peace and Friendship of 1950 is the bedrock of the special relations that exist between the two neighbours.
Under the provisions of the treaty, Nepalese citizen have enjoyed unparalleled advantages in India, availing the facilities and opportunities on par with Indian citizens.
The Treaty enabled Nepal to overcome the disadvantages of being a land-locked country. Overtime, many regimes in Nepal have raised the issue of revision of the treaty. India has maintained that it is willing to examine all bilateral arrangements with a view to further strengthening the ties.
India contributes to the development efforts of Government of Nepal by undertaking various projects in the areas of infrastructure, health, rural and community development and education.
India continues to be Nepal's largest trade partner, source of foreign investment and tourist arrivals. Bilateral trade between India and Nepal has increased substantially since the signing of the Trade Treaty in 1996 and received further impetus after the signing of the revised Trade treaty in 2009 which has provisions that allow Nepal greater access to the Indian market.
There is vast potential for cooperation between India and Nepal in the field of water resources. Nepal has 83,000 MWs hydropower potential. Both countries have recognised that they enhance cooperation to exploit the hydropower potential.