Upadhyay said he was happy that the standoff between Indian and Chinese troops at Doklam had been resolved.
No country would benefit without peaceful resolution of conflicts, he said.
On being asked how challenging it was for the Himalayan nation to manage ties with its two neighbouring giants, the envoy said Nepal's position was "neutral", but "India occupies a special place in terms of people-to-people contact".
"There is a family type and heart-to-heart relationship between the two countries. We have incomparable relation
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India, which has traditionally enjoyed great economic and political ties with Nepal, has faced increasing competition from China in the recent years.
On Nepal joining China's 'One Belt One Road' initiative which seeks to link Asia with Europe, Upadhyay said his country considers China "friendly" and is confident that no action of China will harm its citizens.
India has not joined the initiative, expressing reservations over the China-Pakistan Economic Corridor, a part of OBOR, as it is proposed to pass through Pakistan-occupied Kashmir (PoK).
Referring to the upcoming provincial and federal polls in Nepal, Upadhyay said during electioneering, politicians might indulge in rhetoric, but no one could afford to be seen as biased towards people residing in the plains, bordering India's Uttar Pradesh and Bihar.
Queried on possible resumption of SAARC process which came to a halt last year over Indo-Pak tensions, the ambassador said nothing could be done until there was a politically conducive atmosphere.
Nepal is the current chair of SAARC (South Asian Association for Regional Cooperation).
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