Nepali cargo trains will transport goods from Kolkata to Biratnagar and Birgunj, according to a new railway agreement reached between Nepal and India in New Delhi.

As per the deal, the Nepal Railway Company will use its own trains to transport the cargo imported from third countries.
The agreement was reached during a two-day meeting held in the Indian capital to re-observe the Rail Service Agreement (RAS), which both the countries signed in 2004.
According to sources, the two sides have reached agreements on around half a dozen issues. All deals on RAS are being reconsidered according to the transit treaty between the two countries.
Nepal’s transit trade is directed by the RSA and Nepal-India Transit Treaty. So the agreements will be fully enforced only after amendments to the transit treaty are finalised. The two countries had agreed to identify and sort out issues concerning trade, commerce and all other bilateral matters during the visit of Indian Prime Minister Narendra Modi to Kathmandu last year.
Agreements have also been signed to extend the railway cargo service to Dhamra and Mundra ports in Odisha and Gujarat from where India has already agreed to allow Nepal to conduct third-country trade. These provisions, however, are yet to be agreed to in the transit treaty.
At present, railway cargo service to Nepal is only available from India’s Visakhapatnam and Kolkata ports.
Both sides have also reached an understanding to expand the railway cargo service not only to Biratnagar and Jayanagar but also to Bhairahawa, where a railway line is under construction as well.
Both sides have agreed to exchange letters for this matter. “The Indian side is positive about extending railway cargo service to other railway lines that will be developed in Nepal in future,” said a Nepali official.
India has also agreed to expand bulk cargo facility to other important transit points. The facility will now be extended to Biratnagar and Bhairahawa.
In the absence of bulk cargo facilities in other transit points, Nepal was compelled to bring all the commodities imported from third countries by transporting them via Kolkata to Visakhapatnam Port through Birgunj.
Container Corporation of India, India’s state-owned body, has a monopoly in import and export of every Nepali commodity. Nepali traders have always complained about the delay in transportation and compulsion to pay high costs because of this monopoly.
They claim that the transportation cost in transit trade will come down by one third if private companies are allowed to provide the service.
There has been an agreement, in principle, to permit the private sector in the transit trade of Nepal.
“Both parties have agreed to amend this issue via Letter of Exchange,” said the Nepali official who participated in the meeting.Nawaraj Dhakal, joint-secretary at the Ministry of Industries, Commerce and Supplies, led the Nepali side in the meeting.