President Ram Baran Yadav appointed Upadhyay on the recommendations of the cabinet, along with Arjun Kumar Karki as ambassador to the US, according to a notice issued by the president's secretariat.
Upadhyay is a former minister and senior leader of the ruling Nepali Congress.
The post of Nepal's Ambassador to India had remained vacant for over three years after the then Maoist-led government had recalled ambassador Rukma Shamsher Rana, who was also appointed by Nepali Congress government.
Upadhyay who hails from Kapilavastu district does not have experience in foreign affairs or any prior diplomatic assignment.
He is a working committee member of the Nepali Congress prior to his appointment to the post. He also has served as an assistant finance minister in the Nepali Congress-led government.

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