NEPAL: New Deal Grants Wider Access to India’s Rail Freight Network

Under the terms of a revised rail services deal, Nepal and India have agreed that all of India’s freight services will be allowed to convey freight to, from and around Nepal. In more specific terms, all cargo train operators – whether public, private, special freight or automobile – have been given the go-ahead by Indian Railways (IR) to utilise the Indian railway network to transport Nepal’s container shipments and freight (either bilaterally between India and Nepal or to a third country via an Indian port facility). Conversely, wagons owned by the Nepal Railway Company will be permitted to transport Nepalese inbound and outbound freight via the IR’s Kolkata/Haldia to Biratnagar/Birgunj routes.

The new arrangement was confirmed in a Letter of Exchange (LoE) between the two parties, which revised key clauses of the 2004 India-Nepal Rail Services Agreement (RSA), the legislation regulating the rail freight arrangements between India and its landlocked neighbour. The move is also seen as a significant step by India as it looks to improve regional connectivity in line with its Neighbourhood First policy.