India and Nepal Sign Pact to Expand Rail-Based Trade Connectivity

India and Nepal have taken a major step toward deeper economic cooperation by signing a Letter of Exchange (LoE) that expands rail-based freight corridors between the two nations. The agreement, signed in New Delhi on 13 November 2025, amends the Protocol to the Treaty of Transit, enabling rail movement of both containerised and bulk cargo on the Jogbani–Biratnagar route.

Context: Strengthening Bilateral Trade Mechanisms

The LoE was exchanged during a bilateral meeting between Piyush Goyal, India’s Minister for Commerce & Industry, and Anil Kumar Sinha, Nepal’s Minister for Industry, Commerce and Supplies.

According to the Press Information Bureau, the amendment broadens the definition of cargo and permitted routes, opening up direct rail connectivity from Indian ports to Nepal’s Morang district via the Jogbani–Biratnagar link. The move enhances access to key multimodal trade corridors including:

• Kolkata–Jogbani
• Kolkata–Nautanwa (Sunauli)
• Visakhapatnam–Nautanwa (Sunauli)

This significantly strengthens Nepal’s transit options for international trade.

Technical Details of the Agreement

The updated protocol allows:

• Direct movement of containerised and bulk cargo along the Jogbani–Biratnagar rail line
• Seamless connectivity from Kolkata and Visakhapatnam ports to Nepal’s customs yard at Biratnagar, Morang district
• Enhanced multimodal transit for Nepal’s third-country trade

The Jogbani–Biratnagar rail connection was jointly inaugurated on 1 June 2023 by the prime ministers of both countries and was built through Indian grant assistance.

India remains Nepal’s largest trade and investment partner, and this expanded rail facility is expected to further strengthen economic integration and Nepal’s access to global markets.

Quotes from the Official Release

The press note stated:

“Both countries exchanged a Letter of Exchange (LoE) amending the Protocol to the Treaty of Transit between India and Nepal… This signing will facilitate the movement of rail-based freight between Jogbani (India) and Biratnagar (Nepal), including bulk cargo under an expanded definition.”

While ministerial quotes were not provided, the focus remained on rail-based freight expansion and improved trade corridor efficiency.

Programme Significance: ‘Neighbourhood First’ and Regional Integration

The rail transit enhancement aligns with India’s Neighbourhood First policy and Nepal’s broader regional connectivity goals. Projects such as Jogbani–Biratnagar and Jayanagar–Bardibas reflect deepening trade infrastructure cooperation between the two nations.

The revised treaty framework acknowledges evolving trade patterns, with Nepal seeking diversified port access and India strengthening its strategic and logistical footprint in the region.

About the Organisations Involved

Government of India – Ministry of Commerce & Industry
Responsible for negotiating trade and transit treaties and facilitating customs and logistics frameworks with neighbouring countries.

Government of Nepal – Ministry for Industry, Commerce and Supplies
Handles industrial and trade policy, cross-border logistics, and infrastructure projects, and works jointly with India to implement transit treaty amendments and rail-connectivity initiatives.

Perspective: Impact, Challenges, and Strategic Value

1. Trade and Logistics Impact

• Direct rail freight via Jogbani–Biratnagar will reduce logistics time and cost for Nepal’s imports and exports.
• India gains from increased utilisation of its ports—Kolkata and Visakhapatnam—for Nepal’s third-country trade.

2. Policy Significance

• Marks Nepal’s evolution from road-dominated transit to integrated rail-based trade.
• Represents a concrete outcome of sustained bilateral diplomacy and infrastructure collaboration.

3. Implementation Challenges

• Need for enhanced customs infrastructure at Biratnagar.
• Seamless alignment of rail operations across the border.
• Managing bulk cargo facilities efficiently.
• Coordination on third-country transit protocols and regulatory harmonisation.

4. Regional and Strategic Dimension

• Diversified transit corridors increase Nepal’s resilience and expand its global trade outreach.
• For India, strengthened connectivity with Nepal reinforces ties in the Himalayan region and supports broader regional trade corridor ambitions.