"We are open to it," External Affairs Minister S M Krishna told reporters as he wound up his three-day visit here.
Justifying the need for revising the 1950 treaty, he said 60 years have past since it was signed. The world has changed since then and the Cold War has ended, he added.
"We are entirely willing to re-visit this treaty but the initiative has to come from Nepal. There has to be enough clarity (from Nepal)," Krishna said. "There has to be enough thought of what they want."
This issue was flagged by all Nepalese leaders who met Krishna during his visit here. The Maoists are particularly being pressing for scrapping the treaty, saying it was unequal.
Asked about the delay in signing of the extradition treaty between the two countries, Krishna said that India would certainly like to move fast on it but is willing to wait till the Nepalese side is ready.
India has been keen on this treaty, but lack of consensus among political parties in Nepal is delaying its signing.
"There are some time delays ... India has enormous patience," Krishna said.
Summing up his visit, Krishna said, "there was a lot of goodwill among the political leadership of Nepal and the majority wants good relations with India, which is justified considering the historical, civilisational and geographical links between the two countries."
To a question on the formation of high-level committee to discuss the future course of action on the peace process and drafting of constitution, Krishna said, "India supports any move which brings about consensus among Nepal's political parties. We welcome any positive development in the area."
A joint statement issued at the conclusion of the visit, said that, "India reiterated its commitment to assist Nepal for strengthening peace, stability and democratic institutions and economic development of the country."
Rejecting allegations by Maoist chief Prachanda about India's interference in Nepal's internal affairs, Krishna said, he conveyed the former prime minister "unhappiness over his virulent anti-India statements in recent days."
Krishna told Prachanda that India was not interfering in the internal affairs of Nepal. "We want bilateral relations at even keel."
He said his visit here was mainly aimed at "developing understanding about each others views and sensitivities."
The External Affairs Minister who met Prachanda here on Saturday, expressed confidence that he had "understood the role I had come to play in Nepal. And if he (Prachanda) had any other views he would have given-up."
Underlining that India wanted a stable Nepal, Krishna made it clear that India would not not like to dabble in Nepal's internal process."
He pointed out that Nepal needed to move ahead in the peace process and frame a constitution. Nepal has set May 28, 2010 as deadline for accomplishing the task of drafting the Constitution.
"India stands ready to assist in all these issues but how to go about it is for political parties of Nepal to decide."