Official sources said that during Modi's two-day visit, India will seek to consolidate relationship with the new Nepalese Government of Prime Minister K P Sharma Oli who has returned to power riding on a spectacular electoral victory and now leads a stable dispensation after years of political instability.
This will be the third visit of Prime Minister Modi to Nepal and the first high-level visit from India since the formation of the new Government in Nepal.
Modi will arrive in Janakpur on May 11, where he is likely to announce special assistance to the city, which features prominently in the Indian government's plan to promote the Ramayana circuit.
PM Modi and Mr Oli will remotely lay the foundation of the 900-megawatt Arun III hydro-electric project, the licence for which was awarded by Mr Oli during his visit to India. In what will also symbolise the shared Indo-Nepalese cultural heritage, PM Modi is also expected to visit temples at both Janakpur and Muktinath in Nepal during his visit.
Ahead of the visit, foreign minister Pradeep Gyawali along with India's ambassador Manjeev Singh Puri visited the city to take stock of the arrangements.
The entire temple premise is decorated with fresh flowers and posters welcoming PM Modi are hung outside the temple.
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The Prime Minister will also meet leaders of two Madhesi parties in Kathmandu.
The source cited above said that the two sides are also looking to amend the bilateral trade and transit agreement to include inland waterways, which is not included in the existing pact.
The Arun III power project is a hydroelectric project on river Arun, with an estimated cost of Rs 5,800 crore.
Sources said the Prime Minister will also meet leaders of Madhes-based parties, Sanghiya Samajbadi Forum Nepal (SSFN) and Rastriya Janata Party Nepal (RJPN).
India never officially acknowledged the blockade, coming in the wake of Nepal's new constitution, which India feared could spur violence that might spill across borders.
Chief Minister Lal Babu Raut of province number 2 said it was a matter of pride to welcome the Indian Prime Minister to Janakpur and hence they were working on a war footing to make the visit a grand success. "This visit reflects the high priority India attaches to friendly relation with Nepal", Modi wrote in a tweet. In a gesture of New Delhi's desire to counter Chinese influence in its neighbour, Modi will inaugurate an Indian-financed hydropower project.