India-Nepal Rail Services Agreement (RSA)
Source : PIB
Neighbourhood Relation

What is discussed under India-Nepal Rail Services Agreement (RSA) ?

1. About the  RSA
2. How it helps ?

Why in News ?

Rail Transportation between India & Nepal got a major boost with coming into force of authorization to all cargo train operators to utilize the Indian railway network to carry all containers bound for Nepal whether bilateral freight between Indian and Nepal or third country freight from Indian ports to Nepal. 

Key Facts

• This liberalization will allow market forces to come up in the rail freight segment in Nepal, and is likely to increase

  

  efficiency and cost competitiveness, eventually benefiting the Nepalese consumer.

• These 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 .
• It comes into effect from 09.07.2021 after the formal exchange of Note Verbales and signed copies of Letter of Exchange between officials of India & Nepal.
• After this LoE, all kinds of cargoes in all categories of wagons that can carry freight on Indian Railways network within India can also carry freight to and from Nepal.
• Move will reduce transportation costs for automobiles and certain other products whose carriage takes place in special wagons.
• Wagons owned by Nepal Railway Company will also be authorized to carry Nepal-bound freight (inbound and outbound on Kolkata/Haldia to Biratnagar/Birganj routes) over the Indian Railways network as per IR standards and procedures.

Rail Services Agreement (RSA) – 2004

• The Rail Services Agreement was executed on 21.05.2004 between Ministry of Railways, Government of India and Ministry of Industry, Commerce & Supplies (now Ministry of Commerce), His Majesty’s Government of Nepal (now Govt. of Nepal) for introduction of freight train services between these two countries to and from Birgunj (Nepal) via Raxaul (India).
• This is an agreement which guides movement between India and Nepal by rail.
• The rationale for this Agreement is that there was no rail movement prior to this between the two countries and hence a framework was required for operational and commercial aspects and procedure for customs clearances for rail bound cargo.
• Since then large various developments have taken place which require changes to the Rail Services Agreement.
• Provision in Article 1.4 of the RSA that the Agreement shall be reviewed every five years and may be modified by the Contracting Parties by mutual consent.
• For effecting amendments in the relevant Articles to RSA, Letters of Exchange (LoE) are signed from both sides.

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