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Rail Transportation between India & Nepal got a major boost today with coming into force of authorization to all cargo train operators to utilize the Indian railway network to carry all containers bound for Nepal whether  bilateral freight between Indian and Nepal or third country freight from Indian ports to Nepal.

Significance

• 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 the Nepalese consumer.
  
• The signing of this LoE marks annother milestone in India’s efforts to enhance regional connectivity under the “Neighbourhood First”  policy.

Details

• These cargo train Operators include public and private container trains Operators, automobile freight train operators, special freight train operators or any other operator authorized by Indian Railways .
• India and Nepal sign a Letter of Exchange (LoE) to the India-Nepal Rail Services Agreement (RSA) 2004.
  

Rail Services Agreement (RSA) – 2004 and LoE.

• The Rail Services Agreement was executed on 21.05.2004 between Ministry of Railways, Government of India and Ministry of Industry, Commerce & Supplies (now Ministry of Commerce), His Majesty’s Government of Nepal (now Govt. of Nepal) for introduction of freight train services between these two countries to and from Birgunj (Nepal) via Raxaul (India).  
  
• This is an agreement which guides movement between India and Nepal by rail. 
  
• The rationale for this Agreement is that there was no rail movement prior to this between the two countries and hence a framework was required for operational and commercial aspects and procedure for customs clearances for rail bound cargo. 
  
• Since then large various developments have taken place which require changes to the Rail Services Agreement.

Source: PIB