Mukherjee, who arrived at the Tribhuvan International Airport, was received by President Bidya Devi Bhandari and later the two leaders had a meeting at the Rashtrapati Bhawan at Sheetal Niwas.
"The bilateral meeting was warm and cordial," Foreign Ministry officials here said.
"The Indian President also congratulated President Bhandari and the people of Nepal for the promulgation of the Constitution through the Constituent Assembly last year," Foreign Ministry spokesperson Bharat Raj Paudyal said.
Their blockade had caused strain in bilateral ties, with Kathmandu accusing New Delhi of imposing an "unofficial blockade" which India had categorically denied.
The two leaders, during the meeting, focused on matters relating to bilateral relations and they stressed on the need to strengthen friendly ties between the two countries, according to Paudyal.
Nepal's Minister for Foreign Affairs Prakash Sharan Mahat, Minister for Tourism and Culture Jeeban Bahadur Shahi and Foreign Secretary Shanker Das Bairagi were also present during talks.
Vice president Nanda Bahadur Pun, ministers, top leaders of various political parties, lawmakers, senior government officials, members of civil society and journalists were also present during the function.
President Mukherjee is here on a three-day visit -- the first by an Indian President in 18 years.
Before this, the then President K R Narayanan had paid a state visit in 1998.
President Mukherjee will visit Pashupatinath Temple tomorrow morning and also meet Prime Minister Pushpa Kamal Dahal "Prachanda". He will also visit Ram Janaki in Janakpur on November 4.
Defence Subhash Bhamre, Members of Parliament Bhubaneswar Kalita, L Ganesan, Jagdambika Pal and R K Singh. Foreign Secretary S Jaishankar is also accompanying the delegation.
On November 3, the President will offer prayers at Pashupatinath temple, a UNESCO heritage site. Later, he will be conferred with an honorary degree from Kathmandu University followed a civic reception in Kathmandu in his honour.
The President will also address a seminar of Niti Anusandhan Pratisthan Nepal and India Foundation.
On November 4, a civic reception has been scheduled in his honour at Janakpur, epicentre of protests by Madhesi community, where he will interact with local people. He will also meet leaders of Madhesi community.
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