India and Bhutan announce first cross-border railway project of Rs 4,033 crore

New Delhi: India and Bhutan on Monday announced a landmark initiative to establish rail connectivity between the two countries, marking the first cross-border railway project for Bhutan.

Union Railway Minister Ashwini Vaishnaw, along with Foreign Secretary Vikram Misri, announced plan to construct two new rail links totaling 89-km between India and Bhutan, i.e. Kokrajhar-Gelephu (Assam) and Banarhat-Samtse (West Bengal), at a cost of Rs 4,033 crore.

The Kokrajhar-Gelephu line, with an investment of Rs 3,456 crore, will connect Assam’s Kokrajhar and Chirang districts with Bhutan’s Sarpang region. This project will be developed in the next four years. Gelephu is being developed as a “mindfulness city” under Bhutan’s plans.

The Banarhat-Samtse line, will link West Bengal’s Jalpaiguri district with Bhutan’s Samtse. With an investment of Rs 577 crore, this line will be built in three years. The Samtse region is being developed as an industrial hub by the Government of Bhutan.

Total investment for the two railway line between India, Bhutan will be done by Indian government.

In essence, by constructing of new track, Bhutan gains access to 150,000 km of India’s railway network. This demonstrates the significant advantage of the network effect, Vaishnaw said.

"India is the largest trading partner of Bhutan and most of the exempt trade of Bhutan is done through Indian ports. Seamless rail connectivity will also help the Bhutanese economy to grow and for the people to have better access to the global network," Vaishnaw.

During Prime Minister Narendra Modi’s visit to Bhutan in March 2024, both countries agreed to establish two rail links between India and Bhutan.

On India's role in Bhutan's development, Misri underlined, "The Government of India has been Bhutan's largest provider of developmental assistance and has played a vital role in its modernisation, especially in the areas of infrastructure and the overall economic development of the country."

"For the 13th five-year plan of Bhutan, which runs from 2024 to 2029, the Government of India has committed support of Rs 10,000 crores, which covers project-wide assistance, high-impact community development projects, the economic stimulus program and a program grant. And this quantum constitutes a 100 per cent increase over the 12th five-year plan figures," Misri added.