KATHMANDU, May 12 (Xinhua) -- Nepal and India agreed on Saturday to take bilateral relations to a new high by expanding partnership for the socio-economic development on the basis of the principles of equality, mutual trust, respect and mutual benefit, said a joint statement.

In the 16-point statement, Nepali Prime Minister K. P. Sharma Oli and his visiting Indian counterpart Narendra Modi shared the view that effective implementation of the bilateral initiatives in agriculture, railway linkages and inland waterways development as agreed upon by the two sides during recent exchange of high level visits would have transformational impact in these areas.

The two sides also agreed to expedite implementation of the economic and development cooperation projects.

"The two prime ministers directed their respective officials to address outstanding matters by September 2018, with the objective of advancing cooperation in all areas," the joint statement said.

The two prime ministers discussed about possible measures to reduce Nepal's trade deficit with the southern neighbor, according to the statement.

"The two prime ministers also considered amendments to the Treaty of Transit and related Agreements with a view to further facilitating Nepal's access to the Indian market, enhancing overall bilateral trade, and facilitating Nepal's transit trade," it said.

Nepal and India also agreed to take further steps to enhance the economic and physical connectivity by air, land, and water, the statement said.

"Recognizing the vibrant people to people contacts and friendly bilateral ties, the two prime ministers directed the respective officials to expand cooperation in civil aviation sector, including early technical discussion on additional air entry routes to Nepal by respective technical teams."

Nepal and India also agreed to enhance bilateral cooperation in power sector in line with the bilateral Power Trade Agreement signed in 2014, it said.

Modi arrived in Nepal on Friday for a two-day state visit.