India to give Nepal $218m in aid

India played a major role in reinstating Nepal's parliament

India has said it will give Nepal 10 billion rupees ($218m, £118m) in aid, most of it to be spent on development.

The funds will be used to help build or upgrade roads, railways, an oil pipeline and an airport, a joint Indo-Nepalese statement said.

Nepalese Prime Minister GP Koirala has just ended a four-day visit to India.

India welcomed the reinstatement of parliament that ended mass protests against Nepal's king in April and led to Mr Koirala's appointment as PM.

King Gyanendra assumed direct powers in February 2005, saying political parties had failed to deal with a Maoist rebel uprising.

Mr Koirala's trip to India was his first since coming to power in April.

An Indian government spokesman said the aid package for Nepal included a one-time immediate grant of one billion rupees ($21.8m).

"The idea is to provide assistance to Nepal as early as possible," an Indian foreign ministry spokesman said.

A statement released by the two countries said India would also forgive debts owed by Nepal for defence purchases and increase its annual spending on aid for Nepal.

India had suspended military assistance when King Gyanendra assumed direct control last year.