Letter of Exchange (LoE) Signed to Expand India–Nepal Transit Routes
A bilateral meeting between Shri Piyush Goyal, Commerce and Industry Minister of India and Mr. Anil Kumar Sinha, Minister for Industry, Commerce and Supplies, Government of Nepal was held today in New Delhi.
Both countries interchanged Letter of Exchange (LoE) amending the Protocol to the Treaty of Transit between India and Nepal, took place. This signing will facilitate the movement of rail-based freight between Jogbani (India) and Biratnagar (Nepal) including bulk cargo under an expanded definition. Press Information Bureau (PIB)
The aforementioned Letter of Exchange (LoE) enables direct rail connectivity along the Jogbani–Biratnagar rail link for both containerized and bulk cargo, facilitating transport from the ports of Kolkata and Visakhapatnam to the Nepal Customs Yard cargo station located in Morang District, near Biratnagar in Nepal. This rail link, constructed with grant assistance from the Government of India, was jointly inaugurated by the Prime Ministers of India and Nepal on 1 June 2023. Press Information Bureau (PIB)
The meeting also welcomed ongoing bilateral initiatives to enhance cross-border connectivity and trade facilitation, including the development of Integrated Check Posts and other infrastructure. Press Information Bureau (PIB)
Rail cargo access reaches Biratnagar and Bhairahawa — Nepal has approved a letter of exchange amending the protocol of the Nepal-India Transit Treaty 2023, allowing the import of all types of goods—both container and bulk cargo—via rail to the Biratnagar Integrated Check Post (ICP) and Nautanawa, Sunauli near Bhairahawa. The Kathmandu Post
Until now, the existing transit treaty only permitted cargo rail access to the Birgunj ICP. The amendment now enables the import of goods—both in containers and bulk cargo—by rail. The Kathmandu Post
Currently, all cargo rail services are concentrated at Birgunj ICP. With the new amendment, rail cargo can also be routed through Biratnagar and Nautanwa, easing the pressure on Birgunj and reducing congestion. “Factories and firms around Biratnagar will benefit from lower trade costs and faster delivery times as goods can now arrive directly via rail.” The Kathmandu Post
“Direct transport of goods from Visakhapatnam, India, to Biratnagar ICP will reduce costs by around 15 to 20 percent,” Sainju said. The Kathmandu Post
Although a railway line is yet to be built up to Bhairahawa ICP, the proximity of Nautanawa, Sunauli—just 7 km from Bhairahawa—means western Nepal can also benefit from it. The Kathmandu Post
“The amendment was approved during Monday’s cabinet meeting, and Nepal sent the signed letter of exchange to India. The amended protocol allows all cargo trains to operate through Biratnagar ICP and Nautanwa. Previously, the treaty permitted only four types of goods—coal, clinker, cement, and fertiliser—from third countries to be transported by rail.” The Kathmandu Post
Infrastructure and trade-facilitation measures noted in the sources
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The LoE facilitates transport from the ports of Kolkata and Visakhapatnam to the Nepal Customs Yard cargo station near Biratnagar, strengthening multimodal trade connectivity. Press Information Bureau (PIB)
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Development of Integrated Check Posts and other infrastructure was welcomed as part of ongoing bilateral initiatives to enhance cross-border connectivity and trade facilitation. Press Information Bureau (PIB)
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Prior limitations were due to incomplete infrastructure at Biratnagar ICP; expansion to all goods follows infrastructure upgrades and Cabinet approval in Nepal. The Kathmandu Post
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Visakhapatnam and Kolkata/Haldia ports continue to serve as Nepal’s third-country transit gateways; corresponding rail and customs arrangements have precedents in earlier letters of exchange and railway service agreements. The Kathmandu Post
Press Information Bureau (PIB)
Share Your Thoughts
What impact could direct rail cargo on the Jogbani–Biratnagar link have for businesses in Biratnagar and the Sunsari–Morang industrial corridor?
Do you agree that routing containerised and bulk cargo via Kolkata and Visakhapatnam to Biratnagar will cut logistics costs as reported?
How should local authorities prioritise infrastructure upgrades at Biratnagar ICP and feeder links to Bhairahawa?
What role should private logistics firms and customs agencies play to make the new rail option commercially attractive?
What lessons should policymakers take from this LoE when expanding rail transit to other ICPs?