India-Nepal Rail Services Agreement (RSA)


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    Recently, India and Nepal signed a letter of exchange(LoE) to revise the India-Nepal Rail Services Agreement (RSA), 2004. 


    • 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 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.

    India-Nepal Rail Services Agreement (RSA) 2004

    • It was executed on 21st May 2004 between the Ministry of Railways, Government of India and the Ministry of Industry, Commerce & Supplies (now Ministry of Commerce), Government of Nepal.
    • It was launched for the introduction of freight train services between these two countries to and from Birgunj (Nepal) via Raxaul (India).
    • It guides movement between India and Nepal by rail.
    • Its rationale was to create a framework for operational and commercial aspects and procedures for customs clearances for rail-bound cargo.
    • It shall be reviewed every five years and may be modified by the Contracting Parties by mutual consent.


    • 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’ policy.
    • It will reduce transportation costs for automobiles and certain other products whose carriage takes place in special wagons.

    India-Nepal Relations

    • India and Nepal share a unique relationship of friendship and cooperation characterized by open borders and deep-rooted people-to-people contacts of kinship and culture.
    • Economic Cooperation: India has been a key development partner of Nepal. Following the massive earthquakes in Nepal in April and May 2015, India promptly offered to help hands.
      • About 150 Indian ventures operating in Nepal in manufacturing, services (banking, insurance, dry port, education and telecom), power sector and tourism industries.
      • Integrated check-posts have been proposed at four points on the Indo-Nepal border namely (i) Raxaul-Birganj, (completed and operationalised from April 2018) (ii) Sunauli-Bhairahawa, (iii) Jogbani-Biratnagar and (iv) Nepalganj Road-Nepalgunj. 
    • Trade and Transit: The partnership with India in the areas of trade and transit is a matter of utmost importance to Nepal. India is Nepal’s largest trading partner. India has provided a transit facility to Nepal for the third country trade. Both the public and private sectors of India have invested in Nepal.
    • Defence Cooperation:  India has assisted the Nepalese Army (NA) in its modernization through the provision of equipment and training and cooperation in areas of disaster management.
    • Multilateral and Regional Fora: Both Nepal and India have a common approach to regional and multilateral institutions and hence, work in tandem in the United Nations, Non-aligned Movement and other international fora on most of the important international issues.
      •  Furthermore, both the countries have been deeply engaged in the regional and sub-regional frameworks of SAARC, BIMSTEC and BBIN for enhancing cooperation for greater economic integration by harnessing collectively the potentials and complementarities available in the region.
    • Education: Several scholarships are provided to the Nepali nationals annually.
    • Culture: Both nations promote people-to-people contacts, organize cultural programmes, and conferences and seminars. 
      • India and Nepal have also signed three sister-city agreements for the twinning of KathmanduVaranasi, Lumbini-Bodhgaya and Janakpur-Ayodhya.

    Source: AIR