Welcoming the agreement between Nepalese government and Maoists, India on Wednesday termed it as a 'victory' for the people of Himalayan country and hoped it would place the nation on path of peace, stability and economic recovery.

External Affairs Minister Pranab Mukherjee said India stands ready to extend its full support to the efforts of the government and people of Nepal.

The 'decisions' taken by the leadership of the seven party alliance led by Prime Minister G P Koirala and the Communist Party of Nepal (Maoist) are a 'victory for the people of Nepal', Mukherjee said in a statement.

"We welcome this significant step in Nepal's democratic progress to a settled constitutional order in which people of Nepal can realise their aspirations for peace and prosperity," the External Affairs Minister said.

"India stands ready, as always, to extend its full support to the efforts of the government and people of Nepal," he added.

The Nepal government and Maoists signed a historic accord late Tuesday night under which both sides agreed to lock up their arms and confine their combatants under UN monitoring.

The agreement is aimed at ending decade-old bloody conflict.

"We expect these decisions to place Nepal on the path of reconciliation, peace, stability and economic recovery," Mukherjee said.

He said India looked forward to the signing of the Comprehensive Peace agreement between the government and the CPN(M) on November 16 as has been decided.

"The people of Nepal must have the right to freely choose and decide their own destiny and future without fear of the gun," Mukherjee said.