Nepal's new government says the country will maintain equal ties with its giant neighbors India and China. Anjana Pasricha reports from New Delhi, a visit by Nepalese Prime Minister Prachanda to Beijing has sparked speculation that the Nepalese leader may not accord top priority to ties with India.

Nepal's Foreign Minister Upendra Yadav says Prime Minister Prachanda's recent visit to Beijing to attend the closing ceremony of the Olympics was not intended to keep India at a distance.

He also says that Nepal's new government will maintain "equidistance" or balanced relations with both India and China.

Nepal's new prime minister Prachanda (File)

The comments came after Prime Minister Prachanda broke with a tradition followed by previous Nepalese leaders of making New Delhi their first international stop after assuming office. Instead he met top Chinese leaders in Beijing, and both sides promised to be "good neighbors and good friends."

Some commentators saw the visit as a signal that Nepal's new leader, whose Communist Party of Nepal fought for a decade to overthrow the monarchy, wants to build closer ties with China.

However, the head of Kathmandu's Center for Contemporary Studies, Lok Raj Baral, says any overtures to China by Nepal's new government are unlikely to come at the expense of relations with India.

"No government will ignore or can ignore our relations with India. So far as practical realities are there, we have more extensive relations with India. Economically we are tied up, people-to-people relationship we are very close, because we have open borders, cultural links are there, security-wise we are tied up," said Lok Raj Baral.

Landlocked Nepal has traditionally shared a special relationship with India, defined by a security and trade accord signed in 1950. The treaty allows people on both sides to travel across the border and work in either country, and commits both sides to assisting one another on security issues. India is also Nepal's biggest trading partner.

But Prime Minister Prachanda says the security and trade pact is "unequal" and wants a review of all treaties between India and Nepal.

A former Indian foreign secretary, Lalit Mansingh, says there have been similar calls by other Nepalese leaders in the past, and suggests that both countries should discuss the issue without either side feeling "sensitive about it." He also suggests that New Delhi could make several concessions to help Nepal. 

"As a bigger neighbor we can do some things for Nepal without extracting reciprocity. Nepal is one of the poorest countries in the world, and therefore we don't have to have the same terms of trade as we would have with say an advanced country," said Lalit Mansingh. "Therefore we can afford to be more generous in giving access to Nepalese products to our market."

Commentators say a visit by Nepalese foreign minister Upendra Yadav to New Delhi later this week to attend a regional conference will provide an opportunity to assess the direction in which the bilateral relationship will head in the coming months.