India–Bhutan Special Railway Project

India–Bhutan Special Railway Project

Why in News?

A historic initiative to establish rail connectivity between India and Bhutan has been announced by India, marking the first cross-border rail link between the two countries.

India–Bhutan Special Railway Project: Highlights 

• About: In September 2025, the Government of India announced a major initiative to establish rail connectivity between India and Bhutan. The project includes two new rail links, Kokrajhar-Gelephu in Assam and Banarhat-Samtse in West Bengal. 

• Project Background: The idea of connecting India and Bhutan through railways was formalized during Prime Minister Narendra Modi’s visit to Bhutan in March 2024. Following this, a Memorandum of Understanding (MoU) was signed, and later a formal agreement was signed during the visit of Bhutanese Foreign Secretary to New Delhi. 

• Project Details: The project includes two new rail links:

• • • The first link, Kokrajhar-Gelephu, will run from Kokrajhar in Assam to Gelephu in Bhutan. It is designed to cover the challenging terrain of northeastern India and Bhutan, including hills, rivers, and valleys. 
    • The second link, Banarhat-Samtse, will connect Banarhat in West Bengal to Samtse in Bhutan, providing direct access to southern Bhutan. 
    • Both lines together will integrate Bhutan into the 1,50,000 km Indian railway network, allowing efficient movement of goods and passengers.
    • The whole project will be implemented by the Northeast Frontier Railway (NFR) under the Railways Act, 1989.

• Budget: The total estimated cost for both rail links is ₹4,033 crore. The Banarhat-Samtse line will be developed at a cost of ₹577 crore, while the Kokrajhar-Gelephu section will account for the remainder. In addition, India has committed ₹10,000 crore as developmental assistance to Bhutan under its 13th Five-Year Plan from 2024 to 2029.

• Features: 

• • • The Kokrajhar-Gelephu line, spanning approximately 67 km, will include six stations, two viaducts, 29 major bridges, 65 minor bridges, and 39 underpasses. It will also feature two goods sheds and one flyover. The track would be designed to accommodate Vande Bharat trains to ensure high-speed, modern rail connectivity. 
    • The Banarhat-Samtse railway, covering around 22 km, will consist of two stations, one major flyover, 24 minor flyovers, and 37 underpasses. This line will also support Vande Bharat trains and would be designed to facilitate smooth cross-border transportation of both passengers and goods.

• Timeline: 

• • The Kokrajhar-Gelephu railway line’s construction is scheduled to be completed over the next four years.
  • The Banarhat-Samtse railway line’s construction is expected to be finished within three years.

Significance of India–Bhutan Special Railway Project

• Economic Benefits: The railway links will provide strong economic benefits to Bhutan and India. They will boost trade, improve movement of goods, and encourage industrial growth. By connecting Bhutan directly to the Indian railway network, Bhutan’s economy will expand and integrate with global markets.
• Trade Partnership: India remains Bhutan’s largest trading partner, accounting for nearly 80% of Bhutan’s trade. The railway project will strengthen this partnership. Improved connectivity will make export and import processes faster and more efficient for both countries. It will also aid hydropower exports, contributing to Bhutan’s long-term development goals.
• Tourism and Culture: The new rail lines will increase tourism and support cultural exchange. They will connect important destinations like Gelephu’s Mindfulness City and Samtse’s industrial hub, allowing people to travel more easily and experience Bhutanese culture.
• Regional Security: The project will enhance regional security by improving strategic infrastructure in the eastern and northeastern region of India. It will serve as a counterbalance to external influences in South Asia. It advances India’s Act East Policy.

India-Bhutan Relationship

• Diplomatic Relations: India and Bhutan established formal diplomatic relations in January 1968. Their relationship is guided by the Indo-Bhutan Friendship Treaty, first signed in 1949 and revised in 2007. The treaty ensures that India does not interfere in Bhutan’s internal administration, while Bhutan consults India on external matters. 

• Political Ties: In 2014, the Indian Prime Minister chose Bhutan as his first foreign destination, signaling the importance of the bilateral relationship. He promoted the B2B concept – Bharat to Bhutan – to strengthen and renew political and strategic ties between the two nations. 
• Economic Ties: India plays a vital role in Bhutan’s economy. The Ngultrum (Nu) is pegged to the Indian Rupee, making trade easier. India is Bhutan’s largest trade partner and investment source, contributing 50% of Bhutan’s total FDI. Since 2014, bilateral trade has grown from USD 484 million in 2014-15 to USD 1,422 million in 2021-22.
• Development Assistance: India has been a consistent provider of developmental assistance to Bhutan since the First Five Year Plan in 1961. For the 12th Five Year Plan, India provided Rs. 45 billion, and in the Union Budget 2023-24, Bhutan received the highest allocation of Rs. 2,400 crore. For the 13th Five Year Plan (2024-2029), India pledged Rs. 10,000 crore, including project assistance, and economic stimulus initiatives.
• Hydropower Cooperation: India and Bhutan have collaborated extensively on hydropower projects, generating clean energy and strengthening economic ties. India has helped construct three major projects: Chukha HEP (336 MW), Kurichhu HEP (60 MW), and Tala HEP (1,020 MW). These projects provide Bhutan with export revenue and supply India with reliable electricity.