Context:

Recently, India and Nepal exchanged a Letter of Exchange (LoE) amending the Protocol to the India–Nepal Treaty of Transit, thereby significantly enhancing bilateral trade connectivity via rail corridors.

About the Agreement:

The agreement allows direct rail-based freight movement—including both containerised and bulk cargo—between the Indian border point of Jogbani and Nepal’s Biratnagar, and extends access to major Indian ports (Kolkata, Visakhapatnam) for Nepali trade via key transit corridors.

Key Provisions of the Pact:

• • Enables containerised and bulk cargo movement along the Jogbani (India) – Biratnagar (Nepal) rail link. Expands transit corridors:
    • Kolkata → Jogbani → Biratnagar
    • Kolkata → Nautanwa (Sunauli)
    • Visakhapatnam → Nautanwa (Sunauli)
  • Liberalises definition of “bulk cargo” and allows more goods to be transported under the amended protocol.
  • Reinforces the role of Indian ports (Kolkata, Visakhapatnam) in Nepal’s access to global markets via Indian transit routes.

Significance & Implications:

• • Trade facilitation: The pact reduces logistical cost and time for Nepal to import/export goods via India and to access global markets.
  • Deepened integration: Reinforces India’s role as Nepal’s gateway for third-country trade, consolidating economic ties.
  • Neighbourhood first diplomacy: Demonstrates India’s “Neighbourhood First” approach and Nepal’s appetite for connectivity-driven growth.
  • Infrastructure push: Signals further movement on border connectivity (rail links, transit ports, logistics hubs) between the two countries.
  • Regional supply chain impact: As Nepal diversifies trade routes, India becomes even more important as the regional transit hub.

About India-Nepal Treaty of Transit:

The India-Nepal Treaty of Transit, revised in June 2023, is a crucial agreement that facilitates Nepal's international trade by providing it with access to Indian territory and ports for transit. The treaty is a key component of the broader India-Nepal relationship, alongside the 1950 Treaty of Peace and Friendship, and has been subject to revisions to facilitate trade and connectivity.

Conclusion:

The November 2025 pact between India and Nepal marks a meaningful step toward enhancing bilateral trade through improved connectivity and infrastructure. For Nepal, enhanced access to Indian ports and logistical routes promises lower cost and broader market reach. For India, it strengthens regional ties, trade-hub status, and economic engagement with a key neighbour.