NEW DELHI: Nepal's Deputy Prime Minister and Foreign Minister K.P. Sharma Oli arrives here on Sunday on a week-long visit, during which he will hold talks with External Affairs Minister Pranab Mukherjee and call on Prime Minister Manmohan Singh.

Mr. Oli, who belongs to the Communist Party of Nepal (Unified Marxist-Leninist), will also visit Thiruvananthapuram and Kolkata, an External Affairs Ministry spokesman announced on Friday.

"This will be the first visit by the Foreign Minister of Nepal after the restoration of democracy in the country this year. In June, you will recall, Prime Minister [Girija Prasad] Koirala paid an official visit to India. So, this visit will provide an ideal opportunity for both sides to review bilateral relations and other issues of mutual interest, which will lead to the strengthening of India-Nepal relations," he said.

`Extend cooperation'

Mr. Oli was quoted as saying that a wide range of political issues, including the Maoist arms management, ongoing peace talks and bilateral cooperation, would be discussed with Indian leaders during his visit.

"Nepal expects that India take positively its peace process and extends necessary cooperation for its success ... [the] Nepal Government is determined to successfully conclude the peace process with the Maoists and bring the rebels into the mainstream," he stressed.

South Block sources told this correspondent on Saturday that the opportunity thrown up by Mr. Oli's visit would be used to review the state of relations with Nepal following the visit of Mr. Koirala in June.

The sources added that India had already extended a one-time grant of Rs. 100 crore to Nepal's budget, offered a soft credit line of $100 million to execute infrastructure development projects as prioritised by Kathmandu and waived all outstanding dues Nepal owed on account of defence purchases from India.

On its part, New Delhi is interested in enhancing cooperation with Nepal in the power sector, a point made by Ambassador to Nepal, Shiv Shankar Mukherjee, in a speech delivered in September this year.

"I speak of opportunities [in the power sector] not in the sense of mere potential, but from the point of view of real and immediate possibilities, based on synergies and complementarities; markets and financial resources; and entrepreneurial capabilities and regulatory environment in the two countries. Yet, nothing has seen more discussions and less achievement than cooperation in this sector," he said.

"This is particularly unfortunate in the context of our otherwise close and robust economic relationship. Nearly 70 per cent — I repeat — nearly 70 per cent of Nepal's manufactured exports go to India. A large part of these exports is based on Nepal's natural resources. Similarly, nearly two-thirds of Nepal's imports come from India. About 40 per cent of foreign investments in Nepal have originated in India," Mr. Mukherjee added.

Envoy meets Koirala

PTI reports from Kathmandu:

Mr. Shiv Shanker Mukherjee called on Mr. Koirala on Saturday and discussed the political situation there,including the peace talks with the Maoists.

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