India has decided to provide a grant of Rs 100 crore to the neighbouring country to meet its immediate needs and expressed willingness to resume military aid if sought.

India also expressed willingness to resume military aid, if sought, to Nepal.

During the hour-long talks, Singh noted that Nepal is at "a historical juncture and conveyed India's full support, within its means, to Nepal's economic recovery and reconstruction", External Affairs Ministry spokesman Navtej Sarna told reporters.

Koirala told Singh that his country was facing a "serious economic" situation.

Singh responded with the assurance that its "needs will be given utmost attention and immediate consideration", Sarna said.

The Indian side said it would help Nepal both in immediate terms and long-term. Details of assistance are expected to be finalised during Koirala's visit, he said.

India is expected to give an immediate grant of Rs 100 crore to Nepal as budgetary support to it, a unique move signifying the importance New Delhi accords to it.

Koirala arrived in New Delhi Tuesday on a four-day visit -- his first foreign trip since taking power in late April after King Gyanendra handed back power to parliament after 14 months of direct rule.

The Nepalese premier is accompanied by an 18-member delegation, which includes his finance minister Ram Sharan Mahat and Nepalese business leaders.

"Nepal is in dire need of economic support and we expect support from India," the minister told reporters in New Delhi ahead of the talks between the two premiers.

He said Nepal had identified specific projects in hydro power, road construction and rural development for funding by India.

Nepal is one of the world's 10 poorest countries with an annual per capita income of around 240 dollars per year.

More than half of its development budget comes from foreign donors and the finance minister had last month appealed for an increase in funding.

Ahead of the visit, Nepalese media reported that Koirala was seeking a one-billion-dollar aid package over the next five years for his cash-strapped nation.