External Affairs Minister Sushma Swaraj received Oli, accompanied by a 77-member delegation, at the airport, reflecting importance India attaches to the visit.
Oli and Prime Minister Narendra Modi will hold extensive talks on a range of issues tomorrow following which both sides are expected to sign a number of pacts to step up cooperation in several key sectors.
Ties between the two countries had soured in the wake of agitation by the Madhesi community opposing Nepal's Constitution, saying it failed to address their concerns over representation and homeland.
The agitators had blocked the trading points for almost four months crippling supply of petroleum products, medicines and other commodities by India to that country. The blockade was lifted this month.
It is the first bilateral visit by a Nepalese Prime Minister here after the trip by the then premier Baburam Bhattarai in October 2011. Oli's predecessor Sushil Koirala had attended Modi's swearing-in ceremony in May 2014.
Oli is accompanied by wife Radhika Shakya, Deputy Prime Minister and Foreign Minister Kamal Thapa, Finance Minister Bishnu Poudyal, Energy Minister Top Bahadur Rayamaji and Home Minister Shakti Basnet among others.
The Nepalese Prime Minister will stay at the Rashtrapati Bhavan.
Modi had paid a bilateral visit to Nepal in August 2014 which was the first such trip by an Indian Prime Minister to the neighbouring country in 17 years. Modi had gone to Nepal again in November 2014 for the SAARC Summit.
He will visit Dehradun on Sunday to inspect the Tehri hydel power project and will return here in the evening.
On Monday, he will address the Indian Council for World Affairs and attend a business meeting.
He will leave for Bhuj in Gujarat on Tuesday to have a first hand experience of the earthquake reconstruction work there. Nepal was struck by a devastating quake in April last year and is currently in the process of carring out reconstruction work.
