"The apprehension of historic relations between India and Nepal witnessing a down slide after the landmark victory of Communist Party of Nepal (Maoist) in Nepal has been allayed, as the government of India has now corrected its position on Nepal and sought to cooperate with Maoists," said Sitaram Yechuri, a member of the politburo of the Communist Party of India (Marxist), who is known to be close to Nepalese Maoist leader Prachanda.
Yechuri said Maoists in Nepal have set an example for their counterparts in India and stuck to the path of democracy to ride to power. India's own Maoists are battling the government in more than a half-dozen states, fighting to replace the state with a Maoist-style government.
"The Maoists in Nepal have given up arms and participated in the elections, which is a good sign not only for India but also for whole South Asian subcontinent," Yechuri said.
As results are still pouring in, the CPN (Maoists) is surging ahead in the elections held in Nepal to elect a Constituent Assembly, clearly indicating an end to the 240-year-old monarchy. The ruling seven-party alliance headed by the Nepalese Congress and its allies has virtually been routed. India, one of Nepal's two giant neighbors -- the other being China -- was expecting a coalition government with the Maoists with Nepalese Congress at the helm. Traditionally, India has backed the Congress.
India now fears its own Maoist insurgency could get a boost. The government has so far not opened a diplomatic channel to interact with the new regime, but has sought the help of its communist allies in government to build new relations with the CPN (Maoists).
India's Foreign Office said the government would like to work with the election results in Nepal.
"The results of the elections to the Constituent Assembly in Nepal are a positive development," said Pranab Mukherjee, India's foreign minister.
India's policy toward Nepal has seen many twists and turns including a brief period when the establishment supported King Gyanendra's policy of crushing Maoists with the help of the army.
India has few options. Any misstep with the Maoists in Nepal could push the country toward China.
Nepal's Maoist leader Pushp Kamal Dahal, alias Prachanda, told Indian journalists in Kathmandu Sunday that his party would treat India and China equally, remarks that have been greeted with relief in New Delhi.
Prachanda said Nepal had a historic relationship with India, with which it shares open borders.
"It is very important to have good relations with India. We will further develop our close ties with India," Prachanda said. "We will maintain equal distance from India and China in political terms. Our own reaction as articulated so far also suggests that India will be ready to continue its traditional policy of multifaceted cooperation with the government in Kathmandu."
India's Ambassador to Nepal Shiv Shankar Mukherjee has already met Prachanda to congratulate him on his and his party's performance. Relations between India's ruling establishment and Maoists reached a low when Prime Minister Manmohan Singh and Sonia Gandhi, the head of the ruling United Progressive Alliance, did not meet Prachanda during his visit to India last year.
Sharad Yadav, a senior lawmaker of India's opposition Janata Dal who had organized a reception for Prachanda during his visit to India, told United Press International that the election results in Nepal meant a new path for the country.
"The Maoist victory in Nepal is a landmark," he said. "It has dealt a deathblow to monarchy and family rule and all forces who support these aberrations.
"The family rule is negation of democracy. But unfortunately South Asia has been beset with this evil. This election results in Nepal reverses this trend."
All of South Asia's major nations have prominent dynasties that have run the country since they became independent.
European Union observers praised the conduct of the elections.
"This long-awaited election has demonstrated the enthusiasm of Nepalese people for multiparty democracy and constitutional reform," said Josep Borrell, head of the delegation of the EU mission.
India plans to send a team of officials to Kathmandu after the new regime is sworn in to build ties with the Maoists. Some political analysts see the Maoist victory as a double-edged weapon for India as it has the potential of both fueling the insurgency in India and the promise of hope at the grassroots level.