Gaurika, who has been living with her parents in London, clocked 2 minutes and 33.26 seconds to claim the silver. She also bettered her individual timing as her previous timing was 2 minutes and 33.6 seconds.
India's Shradha Sudhir claimed gold in the event with a timing of 2 minutes and 31.18 seconds that was just 2.08 seconds better than Gaurika.
Uthama Silva won the bronze medal clocking 2 minutes and 40.07 seconds.
Gaurika dedicated the medals to the people of Nepal. "It my promise that I will give even better results, if the country believes in me. The medals are dedicated to the people of Nepal," said Gaurika, who had won bronze in 200 m backstroke, 400 m backstroke and 400 m freestyle.
Gaurika is the first swimmer to win individual medals in the SAG for Nepal.
Earlier, Nepal had won gold medal in women's relay during the eighth SAG held in Nepal.
Gaurika, who landed in India directly from London with her father Paras, will be back on Thursday.
Nepali team coach Ongden Lama said that the day was historic for Nepali swimming. "Guarika has lifted swimming to new heights and we have to keep the momentum. Gaurika is talented and she could win medal in the Asian Games as well," said Lama.
Meanwhile, Nepali players set more than 15 national records along with winning four medals. Gaurika, Sirish Gurung, Sofia Shah bettered their individual records, while Nepal also bettered the timing of relay.
Sirish and Sofia are in foreign trainings for the Rio Olympics. The duo had been training in Thailand under the scholarship of International Olympic Committee.
Coach Lama further added that Nepali swimmers bettered their performance as they spent three weeks in Chandigarh, India.
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