'This would increase the mutually agreed points of trade and result in both investment and employment generation,' Sharma said.

Nepal also made a strong pitch for a revised trade treaty and stressed that attracting Indian investment in key areas like road, infrastructure, energy, education and health topped priority of his government.

'We are promoting an investment-friendly environment and a liberal trade policy,' said Nepal.

Responding to Indian business leaders' concerns about labour unrest, the culture of strikes and the continuing political instability, Nepal said his government has come out with 'a comprehensive security plan to address these concerns'.

He also spoke about setting up a high-level investment board to clear foreign investment proposals in the minimum possible time and a grievance redressal unit that will be managed by the prime minister's office.

Bilateral trade has jumped from $209.5 million in 1995-96 to over $2 billion this year.

India is a major investor in Nepal, with over 400 projects and accounting for about 44 percent of Nepal's foreign investment.

Nepal, however, expressed concern over widening trade deficit and underlined the need for more favourable balance of trade that will further expand economic engagement between the two neighbours.