New Delhi, Jan 14: External Affairs Minister Pranab Mukherjee met Nepalese Commerce Minister Rajendra Mahato here on Wednesday.

Rajendra Mahato is the Commerce Minister of the newly elected Maoist Government headed by Prime Minister Prachanda.

India is major economic as well as trade partner of landlocked Nepal, and supplies the bulk of essential goods to the Himalayan nation. It is also Nepal''s sole supplier of fuel.

The huge trade imbalance in favour of India riles Nepal, and the ruling Maoists want the scrapping of a 1950 bilateral treaty defining travel, business, social and economic ties, saying it shortchanged the Himalayan nation.

Bilateral trade now exceeds 2.3 billion dollars and is still growing. But Kathmandu is unhappy that the trade deficit rose to 1.1 billion dollars in the financial year up to mid-July 2007 from 977 million dollars in the same period the previous year. (ANI)