Nepal, India agree trade deal as PM wraps up visit

NEW DELHI, August 22, 2009 (AFP) – India and Nepal agreed to a new trade treaty Saturday as Prime Minister Madhav Kumar Nepal ended a five-day official visit to the regional giant that both countries hailed as successful. Nepal, on his first official visit to the country since his appointment in May, earlier met his Indian counterpart Manmohan Singh and praised the “enormous goodwill” between the neighbours. He called his visit “most successful”.

Both prime ministers “expressed their satisfaction at the state of bilateral relations between the two countries and resolved to work together to further strengthen and enhance cooperation”, an Indian foreign ministry statement said.

India has long been Nepal’s closest ally and main trading partner and regards its Himalayan neighbour as its diplomatic “backyard”.

But relations became strained when the Maoists, who fought a decade-long civil war with Nepal’s army before a 2006 peace agreement, formed a government following a surprise election win.

Their leader, Pushpa Kamal Dahal, broke with tradition by visiting China before India, and the ultra-leftists have since accused New Delhi of interfering in Nepal’s affairs and bringing about the fall of their go