New Delhi, November 13. In a significant step towards deepening economic ties, India and Nepal have expanded their transit and trade cooperation with the signing of a Letter of Exchange (LoE) amending the Protocol to the Treaty of Transit. The agreement was formalised during a bilateral meeting between Commerce and Industry Minister Piyush Goyal and Nepal’s Minister for Industry, Commerce and Supplies Anil Kumar Sinha in New Delhi on November 13.
The new arrangement will enable the movement of rail-based freight – including bulk cargo – between Jogbani in India and Biratnagar in Nepal under an expanded definition of trade routes. This liberalisation covers major transit corridors such as Kolkata-Jogbani, Kolkata-Nautanwa (Sunauli), and Visakhapatnam-Nautanwa (Sunauli), strengthening Nepal’s access to sea ports and facilitating its trade with third countries.
The LoE will operationalise direct rail connectivity along the Jogbani-Biratnagar link for both containerised and bulk cargo. The route connects the ports of Kolkata and Visakhapatnam to the Nepal Customs Yard in Morang District, near Biratnagar. The rail link – built with grant assistance from India – was jointly inaugurated by the Prime Ministers of the two countries on June 1, 2023.
Both ministers also reviewed ongoing bilateral efforts to boost cross-border trade and connectivity, including the development of integrated check posts (ICPs) and other supporting infrastructure.
India continues to be Nepal’s largest trade and investment partner, accounting for a substantial share of its external commerce.
Beyond its economic significance, the agreement comes at a politically pivotal moment for Nepal. The country is witnessing a generational shift in governance following what is being termed the Gen Z Revolution, which led to the ouster of the KP Sharma Oli-led government earlier this year. The new political leadership has signalled a commitment to transparency, economic revival, and regional cooperation.
For India, this development presents an opportunity to recalibrate and reinforce its partnership with Nepal’s emerging leadership, ensuring that the bilateral relationship remains anchored in shared growth and connectivity. Enhanced transit and trade infrastructure could provide the new government in Kathmandu with tangible tools to stabilise the economy, create employment, and meet the aspirations of an impatient young population seeking change.
