Addressing the function, Modi said India was ready to become a "sherpa" for the development endeavours of Nepal and a detailed project study for rail links between the Indian border and Kathmandu had started.
Modi called Nepal "a top priority for India's 'Neighbourhood First policy'" while praising the Himalayan neighbour for its commitment towards democracy and conducting federal, provincial and local body elections.
Praising Nepal's capital, he said: "Kathmandu has an important place in the history of the world. It is a mixture of the ancient and the modern... as well as showcases the culture of Nepal."
He said both countries were also linked by cricket and mentioned Nepali player Sandeep Lamichanne, who plays for IPL team Delhi Daredevils.
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