Nepal gains direct Kolkata-Biratnagar rail cargo service, slashing transit costs

Nepal has achieved a significant milestone in its trade logistics with the inauguration of the first-ever direct rail cargo service from Kolkata, India, to Biratnagar. This new route, operating under the Nepal-India Transit Treaty, extends direct rail access beyond Birgunj for the first time, marking a major step forward.

Previously, goods imported through Kolkata could only be transported by rail to the Birgunj Integrated Check Post (ICP). However, an amendment to the Electronic Cargo Tracking System (ECTS) Regulations by India's Central Board of Indirect Taxes and Customs has expanded the scope of rail cargo movement. This allows cargo destined for Nepal to be transported by rail directly to the Biratnagar Customs and the Biratnagar ICP.

This development is poised to substantially reduce logistics costs for Nepali traders. Experts estimate that direct transportation of goods from Visakhapatnam to Biratnagar ICP will cut costs by 15 to 20 percent. Currently, cargo often requires reloading onto more expensive and time-consuming road transport for delivery to Biratnagar. The new arrangement offers a more economical and efficient alternative, especially given that Kolkata is Nepal's nearest seaport.

The expanded transit treaty, first signed in 1960 and most recently revised in June 2023, allows Nepal to use Indian territory for third-country imports and exports via road, rail, and inland waterways. The amended protocol permits all cargo trains to operate through Biratnagar ICP and Nautanwa, a significant upgrade from the previous restriction to only four specific commodities.

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The amendment expanded the scope of rail cargo movement from the Indian ports of Kolkata, Haldia and Visakhapatnam, allowing cargo destined for Nepal to be transported by rail up to the Biratnagar Customs.