Exchanges of high-level visits helped to further enhance bilateral ties, promote cooperation and strengthen bond of friendship between the two neighbours.
Nepal experienced two major political developments in 2013 -- formation of a non-partisan government led by Chief Justice Khil Raj Regmi, who replaced then senior Maoist leader Baburam Bhattarai in mid-March and conducting of a free, fair and impartial election on November 19 to the Constituent Assembly.
The Nepali Congress led by Sushil Koirala emerged as the single largest party with 196 seats but could not secure an absolute majority in the 601-member assembly, prolonging the political crisis in the country.

Jhalanath Khanal-led CPN (UML) won 175 seats, followed by Prachanda's UCPN-Maoist, which was left with just 80 seats.

Efforts to form a new government have not made any headway though the Maoists, still sulking over humiliating poll defeat, agreed to join the assembly.
A total of 28 political parties that had won seats in the Constituent Assembly elections nominated their lawmakers on Monday just before the deadline. India had extended its support to elections in Nepal and offered logistic backing for the smooth conduct of polls.
External Affairs Minister Salman Khurshid, who visited Nepal in July, stressed on forging consensus and collaboration among political parties in Nepal and expressed India's strong commitment for the success of peace process and institutionalization of democracy in the country.

Khurshid also announced to provide 764 vehicles to Nepal's Election Commission and security agencies for elections.
In the beginning of the year, Nepal's new Army Chief General Gaurav Shumsher Rana paid a week-long visit to India at the invitation of General Bikram Singh, chief of Army Staff of India.

Five months later Indian Army chief also visited Nepal which helped in consolidating ties between the two militaries. Significantly, India also lifted ban on supplying military hardware to Nepal, which was restricted since 2005 when the then King Gyanendra took absolute power by dissolving a popularly elected government.
Foreign Secretary Sujatha Singh, who paid a visit to Nepal in mid-September reiterated India's support for Nepal's election and offered logistic assistance as per Nepal government's requirement.
During the Home Secretary level meeting between Nepalese and Indian officials in Kathmandu, both the sides agreed to continue security cooperation and exchange information to control cross -border criminal activities, combat terrorism and provide security to Indo-Nepal joint ventures.

During the talks the two sides also agreed to continue security cooperation in controlling human trafficking, small arms trade, drugs trafficking and misuse of mobile phone sim-cards in the border areas.
This month, India and Nepal agreed to address each other's concerns on commerce and transit, including reduction of tariff barriers and checking illegal trade along the porous border between the two countries during talks at the level of Commerce Secretaries.

They also agreed in principle to allow circulation of Rs 500 and Rs 1,000 denomination Indian bank notes within Nepalese territory, ending a ban in place for over a decade.     

India continued to be Nepal's largest trade partner, source of foreign investment and tourist arrivals.

According to Nepalese figures for the fiscal year ending July 2013, Nepal's bilateral trade with India stood at Rs 26126.9 crores, which is 66 percent of its total external trade.


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