In a bid to repair the strained bilateral relationship, President Pranab Mukherjee held talks with his Nepalese counterpart Bidhya Devi Bhandari here on Wednesday.
The Indo-Nepal relations had been strained over the issue of promulgation of the new Constitution for the better part of last year and this year as well.
The visit by Mukherjee is the first by an Indian President in 18 years.
Mukherjee, who arrived at the Tribhuvan International Airport here, was received by President Bhandari and later they had a meeting at the Sheetal Niwas or Rashtrapati Bhawan.
"The bilateral meeting was warm and cordial," Foreign Ministry officials here said.
"The Indian President also congratulated President Bhandari and the people of Nepal for the promulgation of the Constitution through the Constituent Assembly last year," Nepal's Foreign Ministry spokesperson Bharat Raj Paudyal said.
The promulgation of the Constitution last year had led to a strain in ties with Madhesis, who are largely of Indian-origin, leading a nearly six-month-long protest over better representation in the Parliament and the federal structure of the new Constitution.
Their blockade had caused strain in bilateral ties, with Kathmandu accusing New Delhi of imposing an "unofficial blockade" which India had categorically denied.
The two leaders, during the meeting, focused on matters relating to bilateral relations and they stressed on the need to strengthen friendly ties between the two countries, according to Paudyal.
Indian Foreign Secretary S Jaishankar, who is accompanying the President, said that Bhandari has been invited by Mukherjee to visit New Delhi at the time of her convenience which she accepted.
"From the Nepalese side the term that was used was it is a historical visit and not just in terms of a visit there was visible appreciation of the personal standing of the President that he was seen as a senior statesman in the region," he said.
Nepal's Minister for Foreign Affairs Prakash Sharan Mahat, Minister for Tourism and Culture Jeeban Bahadur Shahi and Foreign Secretary Shanker Das Bairagi were also present during talks.
Nepalese Vice President Nanda Bahadur Pun also called on President Pranab Mukherjee, who he in the Himalyan nation for three days.
During the meeting, the Vice President expressed Nepal's keenness to develop water connectivity with India through Kosi and Ganga rivers which will connect the Himalayan nation with ports in West Bengal.
"All aspects of connectivity were discussed but one interesting thing that came up during this time and this was raised by the Vice President and that was connectivity by water. He was talking about connectivity from Kolkata through Hubli, the Ganga and the Kosi and this can come about if Kosi project develops," Indian Ambassador to Nepal Ranjit Rae said.
India has an open border of 1,850 kilometers with Nepal spreading across five states -- Uttarakhand, Uttar Pradesh, Bihar, West Bengal and Sikkim.
The connectivity project now being brought up by Nepal's Vice President can see the light of the day only when dams are built on the river and Kosi Development Project is started, the sources said.
Kosi development project has been pending for over 60 years because of land issues and displacement of people from building dams on the river.
Later in the evening, President Bhandari hosted a state banquet in honour of the Indian President.
In his speech at the state banquet, Mukherjee said the common challenges that the two nations face in the 21st century will necessitate an environment of peace and security in the region and beyond.
He said terrorism poses the most serious threat to the world's peace and security and asked the international community to work together to eradicate the menace.
"Terrorism today poses the most serious threat to our peace and security. The International community will need to work together. We will need to foster tolerance and understanding in all societies and eradicate the scourge of terrorism," said Mukherjee.
The President also attended a reception hosted by India's Ambassador Rae at the Indian Embassy premises.
Nepal's Vice president, ministers, top leaders of various political parties, lawmakers, senior government officials, members of civil society and journalists were also present during the function.
President Mukherjee is here on a three-day visit -- the first by an Indian President in 18 years. Before this, the then President K R Narayanan had paid a state visit in 1998.
The Nepal government declared a national holiday today to welcome Mukherjee and stepped up security around the capital.
The President is accompanied by Minister of State for Defence Subhash Bhamre, Members of Parliament Bhubaneswar Kalita, L Ganesan, Jagdambika Pal and R K Singh. Foreign Secretary S Jaishankar is also accompanying the delegation.
On November 3, the President will offer prayers at Pashupatinath temple, a UNESCO heritage site. Later, he will be conferred with an honorary degree from Kathmandu University followed a civic reception in Kathmandu in his honour.
The President will also address a seminar of Niti Anusandhan Pratisthan Nepal and India Foundation.
On November 4, a civic reception has been scheduled in his honour at Janakpur, epicentre of protests by Madhesi community, where he will interact with local people. He will also meet leaders of Madhesi community.
The President, who is the supreme commander of the armed forces, will also visit Pokhra on the same day where he will interact with ex-servicemen of Indian Army from Gurkha community.
(With PTI inputs)
