The airline will operate daily flights between Delhi and Kathmandu from February 11, the bookings for which open Tuesday, it said.
India's Konkan Railway Corporation Ltd will conduct a preliminary engineering and traffic survey for the rail line, India's embassy in Nepal said in a statement.
The new railway line will connect the Gyirong trading port in the city of Xigaze in Tibet with the Nepali capital Kathmandu, Vice-Foreign Minister Kong Xuanyou was quoted as saying by the China Daily, after the two meetings.
The announcement was made today after delegation-level talks between Indian and Nepalese officials chaired by Prime Minister Narendra Modi and his Nepalese counterpart K P Sharma Oli, who is on a three-day visit.
According to reports, the aircraft crashed while descending at the airport in the Nepali capital.
"Export of power to Nepal is expected to increase by around 145 MW shortly through two 132 kV transmission lines," Indian Embassy said in a statement.
A number of Indian and Chinese companies will participate in an international summit in Nepal next week that aims to position the landlocked country as an attractive investment hub.
Noting that infrastructure was a prerequisite for attaining higher economic growth, Prabhu called the Nepal government and private sector to ramp up investment in construction of physical infrastructure.
The visit comes at a time the two governments are engaged in a diplomatic tussle over the Pathankot airbase terror attack and Pakistan raking up the clashes in Jammu and Kashmir.
The Twin Otter aircraft, operated by private Tara Air, was on a flight from Pokhara, 125 km (80 miles) west of the capital, Kathmandu, to Jomsom when it lost contact with the control tower.
Oil Minister Dharmendra Pradhan is visiting Kathmandu this week for signing of an agreement to lay an oil pipeline from Raxaul in Bihar to Amlekhgunj in Nepal to supply petrol, diesel and ATF to the land-locked Himalayan Kingdom.
Nepal on Friday called upon Indian businesses to set up units in the Himalayan nation and produce goods to be sold in China, which offers a huge market.
Following the nod, Road Transport and Highways Minister Nitin Gadkari will visit Bhutan where the pact is scheduled to be signed by transport ministers of the participating nations.
A 7.3 magnitude earthquake killed at least 68 people and spread panic in Nepal on Tuesday, bringing down buildings already weakened by a devastating tremor less than three weeks ago and unleashing landslides in Himalayan valleys near Mount Everest.
Shockwaves were felt across northern India and as far away as the capital New Delhi, where buildings swayed for more than a minute and people scurried into the streets.
This has been done for the benefit of the Indians who have been stranded in Nepal following earthquakes since Saturday.
The addition of new services would take the total number of flights operated by the airline on the sector to five flights per week.
Yesterday, Modi had delivered his maiden address at the SAARC Summit and announced a number of measures, including issuance of 3-5 years business visa and immediate medical visa for patients coming to India for treatment.
Leaders from eight South Asian countries will attend the two-day event which will begin on Wednesday.
Though Nepal is nestled between India and China, it shares few of the drivers that propel two of the most thriving and talked-about economies of the world.
At least 36 pilgrims, mostly Indians, were killed on Sunday when an overcrowded bus skidded off the road and plunged into the Gandak Canal in southern Nepal.
Rescuers dug through mud and debris on Monday searching for bodies after a flashflood swept through west Nepal killing at least 20 people and leaving dozens missing.
Nepal's Maoist former rebels put thousands of their ex-fighters under government control on Saturday, in a move expected to boost a peace process that ended 10 years of civil war.