Modi will be in Nepal for two days during which the two countries are expected to sign agreements in sectors like power. India may also announce economic aid for that country.
This will be the first bilateral visit by an Indian Prime Minister to Nepal in 17 years, after I K Gujral had travelled there in June 1997, and underlines Modi's focus on priority to India's neighbourhood.
The Prime Minister will hold talks with his Nepalese counterpart Sushil Koirala and have the honour of addressing that country's Constituent Assembly, only the second foreign leader after former German Chancellor Helmut Kohl who had done it in early 1990s.
During the trip, India is expected to announce economic assistance and the two sides are likely to sign pacts in sectors like power and culture.
Modi's visit comes just a week after External Affairs Minister Sushma Swaraj had travelled there.
Modi, who has made it clear that neighbourhood will be the priority of his foreign policy, is making Nepal his second foreign destination in bilateral terms after Bhutan.
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