China, Nepal Plan Kathmandu-Tibet Rail Link

China and Nepal have agreed to build a railway connecting Tibet with Kathmandu, among a raft of deals signed during the Nepali prime minister's visit to Beijing, reports said on Friday.

The two countries signed more than 10 "cooperative documents" on Thursday during Prime Minister KP Sharma Oli's trip to China, according to the China Daily.

The new rail route will link Nepal's capital with the Gyirong trading port in the Tibetan city of Xigaze, according to the China Daily, citing a vice foreign minister.

Indian media said the two sides signed eight agreements worth US$2.4 billion on Wednesday, with Chinese investors ploughing money into developing hydroelectricity, water resources, cement factories, fruit cultivation and farming.

Premier Li Keqiang told Oli on Thursday he hoped that the two countries would begin negotiations on a free trade agreement "as early as possible", according to the official Xinhua news agency.

China is ready to work with Nepal to build an inter-connectivity network across the Himalayas through ports, railways, highways, aviation and communications, Li said.

For his part, Oli expressed Nepal's support for China's Belt and Road initiative, a global trade infrastructure project, according to Xinhua.

Beijing's growing presence in Nepal has raised hackles in its neighbour and traditional ally, India. (AFP)