The External Affairs Minister, who chose Bangladesh for her first official foreign visit, had also accompanied Prime Minister Narendra Modi on his first visit to Bhutan earlier this month.
Sushma's visit is a clear reflection of the new government's firm belief that for India's economic growth and development, a stable and peaceful neighbourhood with which it has strong ties was very important, officials said.
India's relation has not always been smooth with Nepal, which at times resents the country's 'big brother' image and has been seeking review of the 1950 treaty of peace and friendship dealing with various bilateral aspects.
During the minister's visit, ways to prevent cross-border terrorism and criminal activities and boosting trade ties will be among the issues that will be discussed.
Economic cooperation is one of the important pillars of bilateral ties due to integrated economic space with open borders that permit free, but legally permitted movement of people, goods and services.
Nepal imported goods worth Rs 334.83 billion in the six-month period, while exports stood at Rs 45.21 billion, according to the latest statistics of the Trade and Export Promotion Centre.
But significantly, China has overtaken India as the biggest foreign investor in Nepal in the first six months of this year, according to Nepal trade ministry data.
Sushma's visit comes nearly two months after the visit of Nepal Prime Minister Sushil Koirala, who along with other SAARC Heads of State and Government, was invited by Prime Minister Modi for his swearing-in on May 26.
Earlier this month, the External Affairs Minister had also chaired a meeting of India's top envoys from neighbouring countries to maintain the momentum to strengthen bilateral ties.