India has offered Nepal an aid package following a meeting between the prime ministers of the two countries.
The visit to Delhi by Nepalese Prime Minister GP Koirala is his first abroad since he took office after protests led the king to end palace rule.
India's junior foreign minister, Anand Sharma, said details of the package would come before the end of the visit.
Analysts say the aid package, dubbed the "Himalayan Marshall Plan", will be worth millions of dollars.
'Special place'
India is one of Nepal's key military and economic donors.
But it suspended military assistance when King Gyanendra assumed direct control last year.
The BBC's Sanjeev Srivastava in Delhi says that by choosing India for his first visit after assuming power, Mr Koirala has sent a clear message that India continues to hold a special place in Nepal's list of priorities.
Our correspondent says that the visit extends beyond symbolism, because at a time of historic change in Nepal, Kathmandu is looking towards Delhi for all possible assistance.
He says that Delhi rolled out the red carpet for the visiting Nepalese delegation, and now appears more keen to look at issues from its neighbour's perspective.
Much of the aid money pledged by India will go towards infrastructure and development projects.
Mr Koirala and his Indian counterpart, Manmohan Singh, also discussed the issue of peace talks between the Nepalese democratic parties and Maoist rebels.
Maoist leaders in Nepal have asked Mr Koirala to demand the release of their activists detained in Indian prisons.
Our correspondent says that this is a sensitive issue, because Delhi is concerned about the growing influence of Maoists in Nepal, and their impact on those parts of India where armed left-wing groups are active.
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