India & Nepal signed a Letter of Exchange (LoE) to revise the 2004 India-Nepal Rail Services Agreement (RSA). The revised agreement will facilitate the import and export of goods through the Indian railway freight services and will come into force from 9th July, 2021.
- The revised agreement aims to increase the efficiency, and cost-competitiveness of the rail freight sector.
- It is seen as a step by India to enhance regional connectivity under the ‘Neighbourhood First’
- The exchange notes, verbales and signed copies of the LoE were exchanged during a virtual ceremony which was led by Sanjay Kumar Mohanty, Member (Operations and Business Development), Ministry of Railways from the Indian side, and Dinesh Bhattarai, Secretary, Ministry of Commerce, Industry and Supplies from the Nepalese side.
Revised RSA Agreement
i.The revised pact permits all types of cargo train operators (public, private, special freight, automobile) authorized by the Indian Railways (IR) to use the Indian Railway Network for carrying Nepal’s container and freight – both bilateral between India & Nepal or Third country from Indian ports to Nepal.
- Wagons owned by Nepal Railway Company will be authorised 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.
- It also updates several other portions of the India-Nepal RSA and brings them in line with the latest operational and infrastructure status of the Indian and Nepalese Railways.
ii.The Revised pact will benefit the Nepalese traders, transporters and consumers as it will reduce transportation costs for automobiles and certain other products whose carriage takes place in special wagons.
Background of RSA – 2004 & LoE
RSA was executed on 21.05.2004 between the Ministry of Railways, Government of India and Ministry of Industry, Commerce & Supplies (now Ministry of Commerce), Nepal for introduction of freight train services between the two countries to/from Birgun (Nepal) via Raxaul (India).
- RSA acts as a guide for the rail movement between India & Nepal. It contains a framework for operations, procedures for customs clearances for rail bound cargo.
- Article 1.4 of the RSA specifies that ‘the Agreement shall be reviewed every 5 years and may be modified by the Contracting Parties by mutual consent’.
- LoE are signed from both sides to effect amendments in the RSA agreement. To date, it has been amended three times (2004, 2008, 2016).
Recent Related News:
On February 18, 2021, India & Nepal signed an MoU for Reconstruction of 6 Secondary Schools in Nepal at a cost of Nepali Rupees 518 Million (NPR) (~ INR 32.63 crore).
About Indian Railways
Chairman & CEO of Railway Board– Suneet Sharma
Headquarters – New Delhi
Capital – Kathmandu
President – Bidhya Devi Bhandari
Currency – Nepalese Rupee (NPR)