"I am glad to inaugurate the Nepal-Bharat Maitri Pashupati Dharamshala in Kathmandu," Prime Minister Modi said as he handed over the rest house to the Pashupati Area Development Trust.
The Dharmashala has provision for family rooms, kitchen, dining hall, library and some multipurpose halls to meet the requirements of the travellers and families on pilgrimage to Pashupatinath Temple - located on the banks of the Bagmati River.
"This is not just a building...The Nepal-Bharat Maitri Pashupati Dharamshala will remind the visitors about the friendship of the two neighbours," Modi told a gathering, amid applause.
He also hailed the Nepal Government's decision to publish in Nepali language the poems of late prime minister Atal Bihari Vajpayee.
"I thank Prime Minister Oli and the Nepal Government for this touching gesture," Modi said.
He said the Buddhism teaches how to successfully confront the challenges of extremism and terrorism.
Modi also lauded the political stability in Nepal, saying the government in Kathmandu is working for the welfare of the Nepalese people.