India–Nepal Amend Transit Treaty to Boost Rail-Based Trade Connectivity

Context:

• India and Nepal have amended the Treaty of Transit to facilitate rail-based freight movement, including bulk cargo, between Jogbani (India) and Biratnagar (Nepal).

• The amendment was formalised through an exchange of letters in New Delhi between Piyush Goyal and Anil Kumar Sinha.

Key Highlights:

What the Amendment Provides

• Enables movement of bulk cargo via rail on the Jogbani–Biratnagar corridor.

• Expands the scope of transit to support multimodal trade connectivity (rail–road–sea).

• Eases logistics for Nepal’s trade with third countries, reducing costs and transit time.

Liberalised Transit Corridors

• Key routes under the amended framework include:

  • Kolkata–Jogbani

  • Kolkata–Nautanwa (Sunauli)

  • Visakhapatnam–Nautanwa (Sunauli)

• These corridors improve Nepal’s access to Indian ports and global markets.

Economic & Trade Significance

• For Nepal (landlocked):

  • Greater trade access and predictability

  • Lower logistics costs for bulk commodities (grains, minerals, fuels)

  • Enhanced regional integration and growth prospects

• For India:

  • Deepens neighbourhood-first economic ties

  • Boosts utilisation of rail and port infrastructure

  • Strengthens supply chains in eastern India

Infrastructure & Connectivity Impact

• Promotes rail freight over road, aiding:

  • Efficiency and environmental sustainability

  • Decongestion of highways

• Complements ongoing investments in cross-border rail links and customs facilitation.

Diplomatic Significance

• Signals strengthened bilateral cooperation in trade and transit infrastructure.

• Reinforces India’s role as a reliable transit partner for landlocked neighbours.

Key Concepts Involved:

• Treaty of Transit: Framework enabling landlocked countries to move goods through neighbouring states.

• Multimodal Trade Connectivity: Integration of rail, road, and sea transport for efficient logistics.

• Bulk Cargo: Large quantities of unpackaged goods (e.g., grains, coal, minerals).

UPSC Relevance (GS-wise):

GS 2 – International Relations

• India–Nepal bilateral relations

• Transit diplomacy and neighbourhood policy

GS 3 – Economy

• Trade facilitation and logistics

• Role of rail freight and ports in reducing trade costs

Prelims Focus:

• Treaty of Transit and its purpose

• Key India–Nepal transit corridors

• Multimodal connectivity

Mains Enrichment:

• Analyse how transit facilitation with neighbours can enhance regional trade integration.

• Discuss the role of rail-based logistics in improving competitiveness for landlocked countries.