India offers $250 million loan, foodgrains to Nepal

Reaching out to Nepal, India today offered to it foodgrains and a soft loan of $250 million and the two countries signed four pacts, including one on opening up air traffic and another on building of railway infrastructure at five border points.

Prime minister Manmohan Singh also offered India's assistance in Nepal's peace process and Constitution-drafting which he hoped would be concluded within the stipulated time.

Singh, who held detailed discussions on the peace process in that country and the bilateral relations with visiting Nepalese President Ram Baran Yadav, underlined the "special" and "unique" relationship between the two neighbours. 

During the talks, India offered $50 million in soft loan through EXIM bank to Nepal. It also offered 50,000 tonnes of wheat, 20,000 tonnes of rice and 10,000 tonnes of yellow peas to Nepal to enable it meet food shortage, sources said.

India expressed readiness to give 2,000 tonnes of wheat more, if required. Yadav expressed gratitude to India for its consistent support, they said.

After the talks, the two countries signed a revised Air Services Agreement, that will open up air traffic between the two countries with a total 'open sky' arrangement in cargo operations and substantially higher number of passenger flights.