New Delhi - Nepal's Maoist Prime Minister Pushpa Kamal Dahal on Monday held talks with Indian leaders on enhancing trade and economic ties as well as joint flood-control measures.

The visit by Dahal, popularly known as Prachanda, was planned to redefine relations between the neighbouring countries.

Bilateral ties are strained over the flooding of the Kosi river that flows from the Himalayan country into India's Bihar state.

Prachanda met with President Pratibha Patil and External Affairs Minister Pranab Mukherjee at the start of a five-day visit to India.

"Bilateral issues including enhancing economic cooperation were the focus of the discussions," an Indian foreign ministry official said.

"The talks with the external affairs minister laid the groundwork for the main meeting between Prime Minister Manmohan Singh and the Nepalese leader later on Monday," he added.

Singh and Prachanda were to hold wide-ranging talks and review a 1950 bilateral Trade and Transit Treaty which the Nepalese leader wants to replace with a new one that would be more favourable to Kathmandu.

However, Prachanda insisted he would not sign any agreement during the visit.

Flood control is also expected to be high on the agenda, after a breach in an embankment of the Kosi in Nepal caused devastating floods in Bihar earlier this month.

India and Nepal blamed each other for the disaster that inundated over 2,000 Bihar villages, claimed 122 lives and left thousands homeless.

Nepalese officials said the visit was also expected to calm Indian resentment over Dahal's decision to travel to China in August on his first trip abroad as prime minister.

Earlier on Monday, the Maoist leader who led a decade-long armed revolt against the monarchy, visited Rajghat, a memorial to India's much revered leader Mahatma Gandhi.

Prachanda is leading a 92-member delegation of businessmen who are scheduled to attend a joint business summit in Delhi.

He is due to visit the southern city of Bangalore, India's information-technology hub, on September 17. (dpa)