India, Bhutan Launch First Cross-Border Railway Project to Boost Regional Connectivity

India and Bhutan have signed an agreement to build the Himalayan kingdom’s first-ever railway links, a landmark project that promises to strengthen trade and connectivity across South Asia.

The $454 million initiative, fully funded by the Indian government, will connect the Indian states of Assam and West Bengal with two Bhutanese towns through a combined 89 kilometers of railway lines. The agreement was formalized in New Delhi on Monday evening by Bhutan’s Foreign Secretary Pema Choden and Indian Railway Board CEO Satish Kumar.

Railways Minister Ashwini Vaishnaw said the project will be completed in four years, with land acquisition and planning already finalized. “Both goods and passengers will be using these two lines,” he told reporters. “The entire area will get connected. And lots of goods’ movement, which takes days today, will start happening in a few hours.”

Bhutan currently has no railway network, relying solely on road transport across its rugged, mountainous terrain. The new cross-border connections will provide its first direct link to India’s 70,000-kilometer railway system. Officials said the initial phase would focus on connecting key towns, while a second phase will extend a 20-km line from Banarhat in West Bengal to Bhutan’s Samtse district, with two stations.

The plan was first discussed during Indian Prime Minister Narendra Modi’s visit to Thimphu in 2024, where both governments highlighted the need for deeper regional integration. Bhutan, with a population under 800,000, is heavily dependent on India for trade, with bilateral commerce accounting for around 80 percent of its exchanges.

Experts say the new link could reshape trade routes across the eastern Himalayas. The lines will connect to India’s Fulbari Corridor near Siliguri, a strategic gateway that links India’s northeast to the rest of the country and to Bangladesh. From there, Bhutan could access ports such as Chittagong and Mongla in Bangladesh, and Japan-backed Matarbari Deep Sea Port.

“The four countries would be meeting at that particular point known as Fulbari … And this corridor would lead straight away to Chittagong Port, Mongla Port, and Matarbari,” said Mahendra P. Lama, development economist at Jawaharlal Nehru University. “The idea is to integrate Bhutan, Nepal, Bangladesh, and India in a sub-regionalism process.”

Analysts also point to wider regional benefits, including faster cargo movement, cheaper logistics, and new opportunities for cultural and people-to-people exchanges. Lama added that the initiative ties into India’s broader efforts to expand connectivity, including potential links to Myanmar through the historic Stillwell Road.

“This will be something big and far-reaching, a win-win situation for all four countries, with many expected commercial, cultural, and socioeconomic benefits,” he said.

The project underscores India’s role as Bhutan’s principal development partner and signals a new phase of cross-border cooperation in South Asia.