Upadhyay, who had recently resigned to rejoin politics, also said that Nepal would like to have transport links through China and utilise Chinese funds for development projects.
However, he said India's role remains crucial since the two countries were bound by geography and history.
Upadhyay resigned earlier this month but his resignation will come into effect only when it is accepted by Nepal's Council of Ministers.
The Nepalese envoy, speaking at an event here, also said that it would be very difficult for any political party to get a majority in the upcoming polls and that Nepal will have to continue with the "coalition culture".
However, he said, "The relationship is very unique."
Nepal's Election Commission is preparing to hold provincial election on November 26 and federal election on December 5.
Upadhyay, a prominent face of the Nepali Congress party, took charge as the country's envoy to India in April 2015, but was recalled by the then KP Oli-led government in May last year over charges of indulging in 'anti-government' activities.
On Nepal's ties with Beijing, he said being a landlocked country, Nepal has a right to have access through China but at the same time added that he was not very sure about implementation of connectivity projects, including through Tatopani.
The envoy said India will continue to play a key role in ensuring peace, stability and economic growth in Nepal.
"For economic growth of Nepal, relationship with Indian government is a priority," he said.
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