India offers Nepal line of soft credit, essential commodities

Following up on foreign minister S M Krishna's visit to Nepal in January, India today offered visiting Nepal president Ram Baran Yadav a $250 million (Rs1,160 crore) line of soft credit as well as 80,000 tonnes of essential commodities, mainly foodgrains.

Among the food items, India has offered 20,000 tonnes of rice, 50,000 tonnes of wheat, and 10,000 tonnes of yellow peas to Nepal. It would also supply another 2000 tonnes of wheat if necessary.

Yadav had wide-ranging talks yesterday with Prime Minister Manmonan Singh which covered all aspects of the bilateral relationship, from economic cooperation to the political situation in Nepal.

According to officials, Prime Minister Singh expressed the hope that the peace process and the drafting of Nepal's constitution would be completed in time. He also offered India's assistance in whatever way possible and underlined the ''special'' and ''unique'' relationship between the two neighbours.

Yadav expressed ''deep gratitude'' at India's consistent support for Nepal's economic development, said officials.

After the discussions, India and Nepal signed four agreements, including a new updated air service agreement, a memorandum of understanding on the development of railway infrastructure at five points along the border, and development of a polytechnic and a new convention hall near the India-Nepal border.