China has started to build a rail link between Tibet and Nepal that could drastically reduce Kathmandu's trade reliance on its giant southern neighbour India, officials said Saturday.

Beijing is bringing the railway line from Lhasa -- the capital of troubled Chinese-controlled Tibet -- to Khasa, a town along the Nepal-China border, Aditya Baral, the Nepalese premier's foreign affairs adviser, told AFP.

"Prime Minister Girija Prasad Koirala was told by a visiting Chinese delegation during a meeting Friday the Chinese government has begun the railway extension project on its side to link with the Nepal-China border," Baral said.

The Chinese communist party delegation told Nepalese officials that the railway link would be ready in five years time, said Baral.

The Nepal border town of Khasa lies some 80 kilometres (50 miles) north of the ancient capital Kathmandu.

"The railway network will be important for increasing trade and tourism for both countries," Baral added.

Landlocked and impoverished Nepal is wedged between India and China.

Analysts said such a rail link could reduce Nepal's reliance on India for many of its goods from drugs to transport vehicles and spare parts, cotton textiles and cement.

Many Nepalese are uneasy with what they say is New Delhi's dominance of the Himalayan nation's economy.

India is Nepal's largest trading partner, accounting for more than 60 percent of its trade. The two countries recently renewed a bilateral trade treaty which allows duty-free imports into India.

"Once the railway service comes into operation it will lessen dependence on India within a decade or so," Madhavi Singh Shah, economics professor at Kathmandu's Tribhuvan University, told AFP.

"Better connectivity will also be an opportunity for Nepal to take benefit of China's rapidly growing economy," she said.

Although Nepal shares a 1,400-kilometres (875 miles) border with China, economic exchanges have been low due to the absence of easy transport links.

The Chinese visitors also discussed Nepal's political situation and strengthening bilateral ties between the two nations, Baral said.

Their visit came against the backdrop of elections earlier this month in which Nepal's former rebel Maoists scored a surprisingly strong showing, grabbing more than one-third of the seats in the new constituent assembly.

The Maoists snared 220 of the 601 seats in the constituent assembly which is set to declare the nation a republic and rewrite the constitution.

The results came as a shock to India, which had been expecting Nepalese voters to support centrist parties.

The Maoists have said they plan to lead the government that will be formed from the assembly but have appealed to their defeated rivals -- including the Nepali Congress, their nearest rivals, to join them in a coalition government.

The four-member delegation, led by Ai Ping, Director General of the Chinese Communist Party, met with leaders of various political parties before concluding their four-day visit on Friday, the Nepalese official said.

The polls were a central plank of a 2006 peace deal between the Maoists that ended a decade of civil war in which 13,000 people died.