Despite facing opposition from the hardcore elements in his party, the visiting Nepal Prime Minister Baburam Bhattarai pushed for clearance to the pact along with the Double Taxation Avoidance agreement.

The Nepalese Prime Minister described India as a 'significant economic partner' and said the bilateral agreements would help in reducing the cost of doing business by entrepreneurs of the two countries.

'The new DTAA ... embodies modern principles for creating better investment environment and reducing cost of doing business', the visiting Nepalese Prime Minister said at a function organised by industry chambers in New Delhi.

'We are in the process of setting a board of investments, which is body chaired by the Prime Minister. This outfit will be a helping hand for the potential investor smoothly executing investment', he said.

India, is the biggest source of foreign investment in Nepal as also its largest trading partner.

Bhattarai, however, said 'there is serious imbalance in our trade. Nepal trade deficit with India was staggering $ 3 billion.'

During 2010-11, India and Nepal bilateral trade stood at $ 4 billion.

Strengthening the bilateral cooperation in security and Defence apart from focusing on greater partnership to realize full potential of bilateral trade were part of the discussions. Also there was discussions on the ongoing peace process in Nepal

During his stay in the national capital Mr. Bhattari will call on the President and the Vice President and exchange views on issues of mutual interest with the Ministers of Finance, Home and Defence besides the Leader of the Opposition in the Lok Sabha.

The Prime Minister of Nepal arrived in New Delhi on Thursday afternoon on a four day visit to India.

Nepal is keen to strengthen bilateral cooperation with India. Katmandu seeks India's help to strengthen Power distribution network to meet its shortage in the Himalayan nation. New Delhi has pledged full support for building various ongoing Indian power projects in Nepal.