Seeking to address India's concerns with regard to fake currency being smuggled from here, Nepal on Friday promised not to allow its territory to be used for any anti-India activity as the two countries discussed ways to step up cooperation in security and other issues.

External Affairs Minister S.M. Krishna held delegation-level talks with Nepalese Deputy Prime Minister and Foreign Minister Sujata Koirala here on a wide range of subjects that also covered developmental assistance and projects to be undertaken by India.

The two sides discussed border security and crimes like smuggling of fake currency, arms, humans and drugs and ways to combat them through cooperation.

"We talked how to solve these problems," Ms. Koirala told reporters after the talks while asserting that Nepal would not allow its soil to be used for any anti-India activity.

Earlier this month, Nepal police, acting on CBI's request, had arrested four people, including two Pakistani nationals and the son of an influential politician here, in connections with a fake Indian currency and drugs racket having links to underworld don Dawood Ibrahim.

Police had also seized 3.7 kg brown sugar and fake Indian currency notes in denominations of 5,00 and 1,000 with a face value of over Rs 25.44 lakh from the Pakistani nationals.

India has been voicing concerns about ISI using Nepalese territory for carrying out anti-India activities.

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