A host of key issues were discussed on Tuesday by the foreign ministers ahead of the summit-level deliberations that start on Wednesday. India, which has been focusing on three Cs - culture, commerce and connectivity - had proposed amendments to agreements on greater connectivity through ease of vehicular movement, power and railway links.
India said it wanted "concrete outcomes at SAARC, but one country said its internal processes were not ready".
The India-Pakistan stand-off, which started in August with Pakistan envoy Abdul Basit's invitation to Kashmir's separatist leaders and led to the cancellation of the foreign secretary level talks, is still continuing.
The SAARC summit has triggered speculations about talks between Prime Minister Narendra Modi and his Pakistan counterpart Nawaz Sharif. No official bilateral meeting with Pakistan has been scheduled on Day One of the summit.
While India has remained non-committal on the matter, Mr Sharif said in an interview to Geo TV that it was up to India to re-start the negotiations.
In a statement hours before leaving for Kathmandu, PM Modi had said, "Development of close relations with our neighbours is a key priority for my government."
On Tuesday afternoon, at the meeting of foreign ministers, External Affairs Minister Sushma Swaraj's brief chat with the Pakistan's foreign policy adviser intensified speculation, but she described the interaction as "minimum courtesy".
"When you meet someone at an international forum, you greet someone," she said.
When pressed, she repeated what she had said on the subject earlier: "Thoda intezaar kijiye (Please wait a bit)."