India on Friday welcomed Nepal government's decision to meet demands of the Madhesi population and hoped that such issues would continue to be resolved through dialogue and negotiations.

New Delhi said it stands ready, as always, to extend its full support to the efforts of the government and people of Nepal in the ongoing process of democratic transition in which "significant milestones" have already been achieved.

"We welcome Prime Minister G P Koirala's address to the Nepalese nation on Wednesday, addressing the demands of the Madhesi population of the country and the fact that the address reflects a consensus among the eight political parties," External Affairs Ministry spokesman Navtej Sarna said in New Delhi.

The reaction came after Koirala announced that all major political parties, including the Maoists, have unanimously agreed to declare the nation a federal state, meeting the key demand of the protesting Madhesis of Terai region.

In his address to the nation, Koirala said the government will immediately amend the Constitution to fulfill the genuine demands of the Terai people.

Terai has been witnessing widespread violent protests over the last few weeks over this demand.

"We are saddened by the loss of lives and violence in Terai in the last few weeks. It is our hope that the government and the friendly people of Nepal will continue to resolve such issues through dialogue and peaceful negotiations," Sarna said.