$1 billion soft loan would be on agenda when Pushpa Kamal Dahal meets PM Modi tomorrow.
Nepal's Prime Minister Pushpa Kamal Dahal or Prachanda is in New Delhi on his first foreign visit after assuming office. The four-day state visit is being seen as an attempt at putting the bilateral relationship between Delhi and Kathmandu back on track. Prachanda will meet Prime Minister Narendra Modi on Friday.
After a dramatic downturn last year, when India argued that Nepal's new constitution does not take into account the aspirations of the Madhesis - the people of the Terai - the plains that form the border between India and Nepal, ties between the two neighbors had virtually frozen. Nepal had accused India of acting like the neighborhood bully.
Prachanda's predecessor KP Oli had used the differences to warm up towards China. In February this year he signed several agreements on trade and transit routes and fuel supplies for land locked Nepal with Beijing - directly aimed at reducing Nepal's dependence towards India.
Prachanda took over as PM in a power sharing agreement with the Nepali Congress after his communist party of Nepal (M-C) pulled support from Oli. After taking over, he has improved relations with the Nepali Congress, and also promised to accommodate concerns of the Madhesi groups - both of which have given India reason to be pleased, as they vindicate Delhi's argument for a more inclusive constitution in Nepal.
Agreements on increased assistance for earthquake relief, improving rail networks, hydropower and access to Indian ports are expected to be signed when PM Modi and Prachanda meet at Hyderabad House, all intended to reclaim lost ground for India in Nepal.