Nepal and India have signed a Letter of Exchange (LoE) for the 2004 India-Nepal Rail Services Agreement (RSA). The two governments held a virtual ceremony on Friday to exchange Notes Verbales and signed copies of the LoE.
The LoE also updated several other sections of the India-Nepal RSA to reflect the most recent operational and infrastructure status of the Indian and Nepalese railways.
Sanjay Kumar Mohanty, Member (Operations and Business Development), Ministry of Railways, India, and Dinesh Bhattarai, Secretary, Ministry of Commerce, Industry, and Supplies, Nepal, presided over the ceremony.
The virtual ceremony was attended by representatives from the two embassies and concerned Ministries of both governments, including Ambassador of India to Nepal Vinay Mohan Kwatra, Nepali Ambassador to India Nilamber Acharya, Joint Secretary (North) at the Ministry of External Affairs of India Anurag Srivastava, and Joint Secretary (South Asia) at the Ministry of Foreign Affairs of Nepal Tirtha Raj Wagle.
With the implementation of the LoE, all authorized cargo train operators, including public and private container train operators, automobile freight train operators, special freight train operators, and any other operator authorized by Indian Railways, will be able to use the Indian railway network to transport Nepal’s container and other freight – both bilaterally between India and Nepal and third-country shipments.
According to a statement issued by the Indian Embassy in Kathmandu, this liberalization will allow market forces to emerge in Nepal’s rail freight segment, which is likely to increase efficiency and cost-competitiveness, ultimately benefiting Nepalese traders, transporters, and consumers.
Furthermore, as a result of this LoE, all types of cargo in all categories of wagons that can carry freight on the Indian Railways network within India can now also carry freight to and from Nepal. The liberalization will primarily lower transportation costs for automobiles and other products transported in special wagons.
Nepal Railway Company wagons will also be authorized to carry Nepal-bound freight (inbound and outbound on the Kolkata/Haldia to Biratnagar/Birgunj routes) over the Indian Railways network in accordance with Indian Railways standards and procedures.
The exchange represents yet another milestone in India’s efforts to improve regional connectivity through its “Neighborhood First” policy.