In a statement Modi said the visit was part of his government's "neighbourhood first" policy and "reflects the high priority, India, and personally I, attach to our age-old, close and friendly ties with Nepal". PM Modi landed at the temple city of Janakpur, 225 kilometers from capital Kathmandu.
Ahead of his visit, Modi said India would remain a steadfast partner of the Himalayan nation in its quest for growth and development.
"People of India and Nepal are bound by mutual respect and admiration for each other", the prime minister said.
Modi, who arrived in Nepal on Friday (11 May), began his trip with a journey from the historic and religious city of Janakpur.
Narendra Modi also stressed the importance of trade relationship between the two countries, as Nepal is emerging as strong generator of electricity and that India provides 450MW electricity to the neighboring country, which ties in their important relations.
Earlier, Nepalese Prime Minister Oli welcomed Prime Minister Modi upon his arrival at the temple complex. The report, however, noted that Modi's official itinerary was yet to be released.
Thousands of people had gathered in the Janaki temple premises to welcome Modi. He will also be present at banquet hosted by PM Oli.
The prime minister will call on Vice President Nanda Bahadur Pun and President Bidya Devi Bhandari in the afternoon.
Modi will then proceed to the Hyatt Regency for lunch, following which Oli will receive the prime minister at The Dwarika's Hotel in Battisputali for a high-level meeting. Besides connectivity, Modi will also inaugurate the Arun-III hydro-electric project, expected to produce 900 MW of electricity. Both PMs will also be flagging off a bus service from Janakpur to Ayodhya during this visit.
Before Modi, former Indian Presidents Neelam Sanjiva Reddy, Giani Zail Singh, and Pranab Mukherjee have in the past performed these special prayers employing the "khodasopachar rituals", said Ram Tapeshwar Das Vaishnav, the priest at the Janaki Temple.
Later in the day, PM Modi will meet the leaders of various political parties before attending a civic reception to be hosted by the mayor of Kathmandu.
-Prime Minister Modi will depart for India after the civic reception on Saturday evening.
Kathmandu blamed New Delhi for imposing the blockade that caused a crippling shortage of fuel and essential goods just as the country was struggling to recover from a devastating natural disaster earlier that year.
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