India, Nepal sign pact to expand rail trade corridors

In a move set to reshape regional trade routes and ease freight movement across the eastern corridor, India and Nepal on Thursday signed a Letter of Exchange (LoE) to expand rail-based transit routes, marking a new phase in their economic partnership.

The agreement, signed after a bilateral meeting between Commerce and Industry Minister Piyush Goyal and Nepal’s Minister for Industry, Commerce and Supplies Anil Kumar Sinha here, amends the existing protocol to the Treaty of Transit between the two nations.

Under the revised framework, rail connectivity will now extend to the Jogbani-Biratnagar corridor, allowing both containerised and bulk cargo movement directly from Indian ports, including Kolkata and Visakhapatnam, to Nepal’s Customs Yard in Morang district. The move aims to streamline logistics, cut transport time and cost and enable smoother trade for Nepal with third countries through Indian gateways.

“This new arrangement will strengthen multimodal trade connectivity and further consolidate our economic linkages,” said Union Minister Piyush Goyal, announcing the development on X.

The Jogbani-Biratnagar rail link, constructed with Indian grant assistance and inaugurated jointly by the Prime Ministers of India and Nepal in June 2023, now gains full operational flexibility under this deal. The liberalised regime will cover key corridors such as Kolkata-Jogbani, Kolkata-Nautanwa (Sunauli) and Visakhapatnam-Nautanwa, giving Nepal greater logistical reach through India’s established freight network.

Officials said the expansion would significantly reduce dependency on road transport and ease congestion at existing entry points. It is also expected to enhance the resilience of supply chains between the two nations, especially for essential and bulk commodities.

The two ministers also reviewed progress on other connectivity projects, including Integrated Check Posts (ICPs) and cross-border infrastructure aimed at improving trade facilitation.