KATHMANDU: Nepal and India have signed a Letter of Exchange (LoE) to the India-Nepal Rail Services Agreement (RSA) 2004 on Friday.

A virtual ceremony was held on 9 July 2021 to exchange Notes Verbales and signed copies of the LoE between the two governments. From the Indian side, the ceremony was led by Member (Operations and Business Development), Ministry of Railways Sanjay Kumar Mohanty, while the Nepali side was led by Secretary at the Ministry of Commerce, Industry and Supplies, Dinesh Bhattarai.

The ceremony was conducted in presence of Indian Ambassador to Nepal, Vinay Mohan Kwatra, Nepali Ambassador to India, Nilamber Acharya, Joint Secretary (North) at Ministry of External Affairs of India Anurag Srivastava and Joint Secretary (South Asia) at the Ministry of Foreign Affairs of Nepal Tirtha Raj Wagle. Also present were representatives from the two embassies and concerned ministries of both the governments.

With the entering into force of the LoE, all authorized cargo train operators which includes public and private container train operators, automobile freight train operators, special freight train operators or any other operators authorized by Indian Railways will be able to utilize the Indian railway network to carry Nepal's containers and other freight – both bilateral between India and Nepal or third country from the Indian ports to 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 Nepali traders, transporters and the consumer, according to a press statement issued by the Embassy of India in Kathmandu.

Further, after this LoE, all kinds of cargoes in all categories of wagons that can carry freight on the Indian Railways network within India can also carry freight to and from Nepal. The liberalization will 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,” said the statement.

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 “Neighborhood First” policy,” added the statement.