Kathmandu: India agreed on Saturday to construct a rail link to Nepal's capital, Kathmandu, and to open up inland waterways in the landlocked Himalayan nation that has also by courted by China with transport deals.
The agreement emerged at the end of talks in New Delhi between Indian Prime Minister Narendra Modi and his Nepali counterpart K.P. Sharma Oli, making his first foreign visit to India after returning to power earlier this year.
During his earlier tenure, Oli sealed deals with Beijing in 2016 to use Chinese roads and ports, seeking to reduce Nepal's dependence on India for trade and transit.
The planned railway line from the border town of Raxaul to Kathmandu would be the mountainous nation's most ambitious railway project. Nepal currently only has rail links on its southern plains.
"As a first step...India would carry out preparatory survey work within one year," a joint statement after the talks said, to finalise the details of the line. Nepali officials say they are already in talks with China over an extension of the Chinese railway network into Nepal from Tibet as part of China's Belt and Road Initiative that Nepal joined last year.
Analysts said the latest Indian move was spurred by China's expansive infrastructure projects in Nepal as both Asian giants jostle for influence.
The plan to develop inland waterways will give Nepali cargo additional access to sea and boost its trade, officials said.