India-Nepal Rail Services Agreement: Letter of Exchange signed

Nepal and India have signed a Letter of Exchange (LoE) to the India-Nepal Rail Services Agreement (RSA) 2004 amidst a virtual ceremony on July 9.

With the entering into force of the LoE, all authorized cargo train operators which include public and private container trains operators, automobile freight train operators, special freight train operators or any other operator authorized by Indian Railways will be able to utilize the Indian railway network to carry Nepal's container and other freight – both bilateral between India and Nepal or third country from Indian ports to Nepal, said the Indian Embassy in Nepal.

“This liberalization will allow market forces to come up in the rail freight segment in Nepal and is likely to increase efficiency and cost-competitiveness, eventually benefiting Nepalese traders, transporters and the consumer. After the LoE, all kinds of cargoes in all categories of wagons that can carry freight on Indian Railways network within India can also carry freight to and from Nepal,” the Embassy stated in a press release, adding that the liberalization would particularly reduce transportation costs for automobiles and certain other products whose carriage takes place in special wagons.

Wagons owned by Nepal Railway Company will also be authorized to carry Nepal-bound freight (inbound and outbound on Kolkata/Haldia to Biratnagar/Birgunj routes) over the Indian Railways network as per IR standards and procedures, according to the Agreement.

The LoE also updates several other portions of the India-Nepal RSA and brings those in line with the latest operational and infrastructure status of Indian and Nepalese Railways. “It, therefore, marks another milestone in India’s efforts to enhance regional connectivity under the “Neighbourhood First” policy,” the press release mentioned.

The event was led by the Secretary at Ministry of Commerce, Industry and Supplies, Dinesh Bhattarai, from the Nepali side and Member (Operations and Business Development), Ministry of Railways, Sanjay Kumar Mohanty, from the Indian side.