The launch of RuPay in Nepal is a significant move to enhance financial linkages between the two countries, India's foreign Secretary Harsh Vardhan Shringla said on Saturday.
"It is expected to facilitate bilateral tourist flows, strengthen people to people linkage," he added.
He made the comments at a media briefing following wide-ranging talks between Prime Minister Narendra Modi and his visiting Nepalese counterpart Sher Bahadur Deuba.
Nepal's Prime Minister Sher Bahadur Deuba met his Indian counterpart Narendra Modi and inaugurated the Himalayan nation's only railway link with its southern neighbour on Saturday in a summit meant to deepen relations.
Deuba's first trip to India since becoming prime minister in July comes a week after a visit by Chinese Foreign Minister Wang Yi to Nepal.
Prime Minister Narendra Modi said the introduction of RuPay card in Nepal will add a new chapter to our financial connectivity. "Other projects like Nepal Police Academy, Integrated Check Post in Nepalganj, Ramayana Circuit etc. will also bring the two countries closer," PM Modi said.
There was a general understanding that the boundary issue between India and Nepal needed to be addressed in a responsible manner through dialogue and its politicisation should be avoided, Shringla said.
In his statement to the media, Deuba said the boundary issue was discussed and he urged Modi to resolve it through the establishment of a bilateral mechanism.
Shringla said the issue was briefly discussed.
"The issue was briefly discussed. There was a general understanding that both sides needed to address this in a responsible manner through discussion and dialogue in the spirit of our close and friendly relations and politicisation of such issues needs to be avoided," he said.
Shringla was replying to a question on the issue.
"I think there was a sense that we should address it through discussion and dialogue," he added.
Ties between India and Nepal came under severe strain after Nepal published a new political map in 2020 that showed the three Indian territories - Limpiyadhura, Kalapani and Lipulekh - as part of Nepal.
On its part, India reacted sharply, calling it a "unilateral act" and cautioning Kathmandu that such "artificial enlargement" of territorial claims will not be acceptable to it.
The row started after Defence Minister Rajnath Singh inaugurated an 80-km-long strategically crucial road connecting the Lipulekh pass with Dharchula in Uttarakhand in May 2020.
Nepal protested the inauguration of the road claiming that it passed through its territory and came out with the new map weeks later.
Shringla visited Nepal in November 2020 with an aim to reset the ties. Shringla's trip was followed by a visit to India by then Nepalese foreign minister Pradeep Kumar Gyawali.
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