Rail Cargo movement between India and Nepal gets a big boost

India and Nepal have signed a Letter of Exchange(LoE) to revise the 2004 India-Nepal Rail Services Agreement (RSA). The revised agreement allows all authorized cargo train operators to utilize the Indian railway network to carry Nepal’s container and other freight – both bilateral between Indian and Nepal or third countries from Indian ports to Nepal.

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The authorized cargo train operators include public and private container trains Operators, automobile freight train operators, special freight train operators, or any other operator authorized by Indian Railways.

Significance of this revised agreement:

It will allow market forces (such as consumers and buyers) to come up in the rail freight segment in Nepal and is likely to increase efficiency and cost- competitiveness.
It will reduce transportation costs for automobiles and certain other products whose carriage takes place in special wagons and will boost rail cargo movement between the two countries.
The agreement is another milestone in India’s efforts to enhance regional connectivity under the “Neighbourhood First”.

Important takeaways for all competitive exams: