Envoy says India is main source of tourists and foreign direct investment for Nepal. (Representational)

Nepal can reap huge benefits from the steady economic growth of India, which is poised to be a $5 trillion economy by 2025, Indian Ambassador to Nepal Manjeev Singh Puri has said.

Addressing a seminar in Kathmandu on "Nepal-India Relations: Development and Dynamics", he said India continues to be the main source of tourists and foreign direct investment (FDI) for Nepal.

"India offers a natural advantage for Nepal and the FDI from India has witnessed a sharp increase in Nepal in the current fiscal year," he was quoted as saying by the My Republica.

Mr Puri urged Nepal to reap the benefits of the steady economic growth that India has been achieving for the past several years.

Nepal's Foreign Minister Pradeep Gyawali said Nepal had an all-encompassing relations with India. He underscored the need for collaboration to tackle the adverse effects of climate change to reduce the risk of disaster.

Mr Gyawali also said that there was a need to resolve some of the outstanding issues like the boundary dispute, inundation problems on the border areas and some of the irritant factors in bilateral relations to further strengthen the relations between the two countries.

Former prime minister Madhav Nepal said India has played a vital role in Nepal's development and democratisation process.