India and Nepal have reinforced their economic partnership by signing a Letter of Exchange (LoE) to amend the Protocol to the Treaty of Transit, a move set to significantly boost multimodal trade and expand key transit corridors between the two nations. The agreement, inked on Thursday in New Delhi, follows a bilateral meeting between India's Minister of Commerce and Industry, Piyush Goyal, and Nepal's Minister for Industry, Commerce and Supplies, Anil Kumar Sinha.

The amended Protocol aims to streamline rail-based freight movement between Jogbani (India) and Biratnagar (Nepal), encompassing both containerized and bulk cargo. This development expands the scope of the existing transit framework and promises to bolster cross-border connectivity.

The LoE also extends liberalization to vital trade routes, specifically Kolkata–Jogbani, Kolkata–Nautanwa (Sunauli), and Visakhapatnam–Nautanwa (Sunauli). By strengthening multimodal connectivity along these corridors, the agreement is expected to significantly enhance Nepal's trade with third countries.

A key component of this enhanced connectivity is the Jogbani-Biratnagar rail link, a project completed with grant assistance from the Indian government and inaugurated on June 1, 2023, by the Prime Ministers of both countries. The new agreement will enable direct rail transport of goods from the Indian ports of Kolkata and Visakhapatnam to the Nepal Customs Yard cargo station in Morang District, near Biratnagar. This direct access is poised to reduce transit times and costs, making trade more competitive for Nepali businesses.

Both Ministers lauded the ongoing bilateral efforts to improve cross-border infrastructure, including the development of Integrated Check Posts (ICPs) and other measures designed to facilitate trade. These ICPs are expected to streamline customs procedures and reduce congestion at border crossings, further enhancing the efficiency of trade between the two countries.

India is Nepal's largest trade and investment partner, accounting for the majority of its external trade. The Ministry of Commerce & Industry anticipates that these new measures will further strengthen the economic and commercial ties between the two nations and enhance regional connectivity. The enhanced rail connectivity is not only expected to boost bilateral trade but also to facilitate Nepal's access to global markets, promoting economic growth and development in the region.