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Narendra Modi pledges US$1 billion in Indian aid to Nepal during visit

Prime Minister Narendra Modi makes pledge during a rare visit to Kathmandu, as part of bid to check China's growing influence in region

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India's Prime Minister Narendra Modi (left) shakes hands with Nepali Prime Minister Sushil Koirala after issuing postal stamps at Prime Minister's office in Kathmandu, Nepal. Photo: Xinhua

Indian Prime Minister Narendra Modi announced US$1 billion in aid to Nepal as he sought to speed up progress on power agreements while also aiming to counter rival giant China's influence in the region.

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Announcing the line of credit for various development projects, Modi told the Nepalese parliament that he wanted to help develop the landlocked country's infrastructure.

Admitting it was a mistake that no Indian prime minister had visited Nepal for 17 years, he promised that "this will not happen again".

Modi, a right-wing nationalist, has sought to shore up ties with India's neighbours since sweeping to power at national elections in May, in a bid to check China's sway in the region.

"I hope my visit will open a new chapter in India-Nepal relations, characterised by more frequent political engagement and closer cooperation," he said late on Saturday.

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