India has pledged significant economic assistance to Nepalese Prime Minister Girija Prasad Koirala, who is in India on a four-day visit. As Anjana Pasricha reports from New Delhi, India has also welcomed efforts by Mr. Koirala's multi-party government to end a decade-long Maoist insurgency in the country. 

Girija Prasad Koirala, left, poses with Indian PM Manmohan Singh in New Delhi, June 6, 2006

On top of the agenda for the Nepalese Prime Minister Girija Prasad Koirala as he met his Indian counterpart Manmohan Singh was an aid package to revive his country's battered economy.

Mr. Koirala was not disappointed. Indian Foreign Ministry spokesman Navtej Sarna says New Delhi will provide assistance to help its tiny neighbor recover from months of political turmoil and a decade-long Maoist rebellion.

"Nepal's needs will be given utmost importance and immediate consideration of the government of India," he said.  "India would like to help both in the immediate terms as well as in the long-term requirements over the coming years."

The exact details of the aid package are being worked out, and are expected to be announced Friday when Mr. Koirala ends his visit to India. It will include money for badly needed infrastructure projects such as roads, irrigation and rail networks.

India has traditionally been one of Nepal's key donors, providing both economic help and the bulk of essential goods to the land-locked country.

Girija Prasad Koirala, left, with Indian home minister Shivraj Patil in New Delhi, June 7, 2006

However, Nepal has not asked India to resume military assistance, which New Delhi cut off after King Gyanendra seized power last year.

India also expressed support for the Nepalese government's efforts to integrate the country's Maoist rebels into the political mainstream. The rebels and the country's new multi-party government have agreed to several steps that are expected to lead to the preparation of a new constitution for the country. That could eventually pave the way for the Maoists to end their decade-long rebellion.

Indian junior foreign minister, Anand Sharma, says New Delhi backs the direct peace negotiations between the government and the rebels, but wants the Maoists to disarm.

"We feel it is important that the Maoists also deliver on their commitment to multiparty democracy and also on the demobilization. However, as we have said, we are all for strengthening the multi-party democracy in Nepal," he said. 

New Delhi fears that Maoist guerrillas in Nepal could encourage left-wing rebels in India to intensify insurgencies in several eastern states. Last year, India cautiously backed a peace accord between the rebels and Nepal's political parties that paved the way for King Gyanendra to end his direct rule.

Mr. Koirala is accompanied by a 40-member delegation that includes several ministers. His visit to New Delhi is his first overseas trip since he took office after King Gyanendra handed over power in April following weeks of pro-democracy protests.