Two railways to Kathmandu, from China and India, are still waiting on paperwork

Nepal has two proposed railways into its capital, one from each neighbour, and both are stuck at the stage of studies. Neither has a construction contract, an agreed price or an agreed way to pay for it.

The northern line would run 72 kilometres on the Nepali side from Kerung, on the Tibetan border, to Kathmandu. A feasibility study by the Xi'an-based China Railway First Survey and Design Institute Group began in December 2022 and was expected to be finished by 26 June 2026, The Kathmandu Post reported in February. China is paying for the study, which The Kathmandu Post put at about Rs 3.4bn (180.47m yuan).

The southern line would run about 136 kilometres from Raxaul, in Bihar, to Kathmandu. India's Ministry of Railways has completed the final location survey and a detailed project report, India's railways minister, Ashwini Vaishnaw, told the upper house of India's parliament in March, according to Swarajya. He added that the project still needed consultations with state governments and appraisal by NITI Aayog and India's finance ministry before formal approval, and that exact timelines depended on those reviews.

Engineering through the Himalaya

The northern route faces severe engineering problems. About 98.5% of the Nepali section would be on bridges or in tunnels, and the Nepal section was estimated to cost $2.75bn (about Rs 426bn), The Kathmandu Post reported. The study has had to deal with rock bursts, high seismic risk, unstable slopes and deep active faults. By mid-March, about 90% of the geological survey work had been completed, according to the government's Economic Survey 2025/26 as reported by Meroauto, including drilling and soil testing in Kathmandu, Nuwakot and Rasuwa.

The southern route is easier but not simple. When India handed over an earlier final location survey in July 2023, it estimated the cost of a 141-kilometre line at about $3bn, with 42 kilometres of tunnels and 124 large bridges, National Herald reported, citing the news agency IANS. That report put the internal rate of return at 4.81%, implying about 25 years before the line became profitable. Later Indian reports have used different lengths and cost figures, which is one reason the project's final shape remains unclear.

What has actually moved

The two governments continue to discuss the Raxaul line. The final location survey report was on the agenda when the India-Nepal project steering committee and joint working group on railways met in Kathmandu on 11 and 12 June, the Indian embassy said. A completed feasibility report for the Kerung line would lead, if both sides agree, to a detailed project report, the next step before any decision to build, The Kathmandu Post reported.

Other rail work in Nepal is smaller and closer to completion. The Economic Survey, as reported by Meroauto, recorded 68.6 kilometres of trackbed and 16 bridges finished on the Bardibas-Chocha section of the planned East-West electric railway, and 10 of 18 kilometres completed on the Bathnaha-Biratnagar line in the east.

For businesses, the stakes are freight costs and journey times; Patna Press, a Bihar news site, put the road journey from Raxaul to Kathmandu at about five hours against roughly three by the proposed train. Neither benefit arrives until someone agrees to finance lines that, on the published estimates, would cost several billion dollars each, against a Nepali national budget of Rs 2.12trn (about $13.7bn).

What to watch: whether the Kerung feasibility report is formally handed to Nepal and made public, with a cost estimate; whether India's cabinet approves the Raxaul project after the NITI Aayog and finance ministry appraisals; and whether either government proposes a financing model, grant or loan, for construction.