IANS

New Delhi, Aug 20: India and Nepal Wednesday discussed the finalisation of a revised trade treaty as Kathmandu promised to push the peace process at home and made a pitch for more Indian investment.

Prime Minister Manmohan Singh held talks with his Nepalese counterpart Madhav Kumar Nepal, who is in India on a five-day visit - his first to the country since assuming office nearly three months ago.

They discussed a host of bilateral issues, including the drifting peace process in the Himalayan state and the signing of a revised trade treaty that is expected to boost economic ties between the two countries.

They also discussed the revision of the 1950 Friendship Treaty and the need to expedite the finalisation of a revised extradition treaty that will check cross-border crimes, sources said.

Nepal assured Manmohan Singh about his government's commitment to pushing the peace process that suffered a blow after Maoist leader Prachanda resigned as prime minister of Nepal three months ago.

Earlier, addressing a gathering of top Indian and Nepali businessmen here, Nepal said: "My government is committed to pushing the peace process. The new constitution and the success of the peace process will begin a new era in Nepal."

With the new government in Kathmandu keen on economic revival in trying circumstances, the discussion between the two sides focused on economic issues and expanded cooperation in the hydropower sector.

Commerce and Industry Minister Anand Sharma met his Nepalese counterpart Rajendra Mahato here to take forward the proposed Treaty of Trade and Agreement of Cooperation.

"This would increase the mutually agreed points of trade and result in both investment and employment generation," Sharma said.

Nepal also made a strong pitch for a revised trade treaty and stressed that attracting Indian investment in key areas like road, infrastructure, energy, education and health topped priority of his government.

"We are promoting an investment-friendly environment and a liberal trade policy," said Nepal.

Responding to Indian business leaders' concerns about labour unrest, the culture of strikes and the continuing political instability, Nepal said his government has come out with "a comprehensive security plan to address these concerns".

He also spoke about setting up a high-level investment board to clear foreign investment proposals in the minimum possible time and a grievance redressal unit that will be managed by the prime minister's office.

Bilateral trade has jumped from $209.5 million in 1995-96 to over $2 billion this year.

India is a major investor in Nepal, with over 400 projects and accounting for about 44 percent of Nepal's foreign investment.

Nepal, however, expressed concern over widening trade deficit and underlined the need for more favourable balance of trade that will further expand economic engagement between the two neighbours.