Nepal and India restore rail links, reach an agreement on energy projects

New Delhi: Despite Kathmandu increasingly being courted by China, Indian and Nepali passenger rail services were restored on Saturday.

As China pours heavy investment into the landlocked Himalayan country, analysts say Kathmandu's influence over Delhi is eroding. In the past, Nepal has performed a balancing act between Delhi and Beijing, but analysts say the situation is changing.

Sher Bahadur Deuba, the prime minister of Nepal, has made India his first foreign destination since he came to power last year.

He met PM Narendra Modi on Saturday during a three-day visit, and they virtually announced the beginning of a passenger train connecting eastern Bihar with Nepal.

Rail services between the neighbours have been suspended since 2014 because of upgrades.

According to PM Modi, both leaders agreed to prioritize initiatives related to trade and global connectivity.

"Such schemes will make a wonderful contribution to smooth, hassle-free exchange of people between the two countries," he added.

A joint vision statement was also released on how the two countries will cooperate in the power sector.

Earlier this week, China's foreign minister Wang Yi visited Nepal and India. The PM Deuba visit is the first to the south in two years.