Virtually questioning the credibility of the municipal polls held in Nepal, India on Thursday said active involvement and participation by all mainstream parties was essential for any credible electoral exercise.

The external affairs ministry said the grave challenges facing Nepal demand the initiation of a 'genuine process of national reconciliation, dialogue and participation that can facilitate a peaceful political settlement'.

"The fact is that the elections have been held against the backdrop of a boycott by the major recognised political parties, sharp curtailment of their legitimate activities and continued arrest and detention in various forms of many of their leaders," External Affairs Ministry Spokesman Navtej Sarna said.

"Any credible electoral exercise should have the active involvement and participation of all the mainstream parties. Only then will such elections be able to contribute to the restoration of democracy and political stability," he said.

Sarna said India, as a close and friendly neighbour of Nepal, wishes to see an early return to peace, stability and development in the Himalayan Kingdom.

He also pointed out that Maoists had engaged in several violent attacks in the run up to the elections.

Political parties and Maoist violence marred Wednesday's civic polls, touted by King Gyanendra as the first step towards restoration of full-fledged democracy in Nepal.