The India–Bhutan rail connectivity initiative will improve trade logistics and facilitate Bhutan’s economic diversification and access to new markets. Concurrently, it drives development in India’s Northeast. It is therefore a pivotal project for bilateral cooperation and regional integration.

Railways function not merely as a mode of transport but as a critical infrastructure that underpins economic linkages within and across national boundaries. They have long served as the backbone of economic integration by facilitating the efficient movement of goods, people, and ideas across regions. Its ability to reduce transportation costs, compress distances, and connect production centres with markets has made it central to processes of industrialisation and regional development.

Over the last few decades, the Indian Railways has placed greater emphasis on building rail connectivity across South Asia. Cross-border railway projects are increasingly seen as practical tools to deepen economic ties, streamline trade, and reinforce regional linkages. Converting metre gauge to broad gauge in Bangladesh and building rail connectivity with Nepal illustrate this shift, where operational train services and new infrastructure are gradually knitting together markets and border regions.[1] Within this evolving regional approach, Bhutan has also come into focus as the next step in expanding rail-based connectivity.

On 13 March 2026, Prime Minister Narendra Modi virtually inaugurated a set of infrastructure projects in Kokrajhar, Assam, including the proposed rail link with Bhutan.[2] The planned corridor comprises two routes connecting Assam and West Bengal to Gelephu and Samtse in Bhutan, respectively. Construction of both links is scheduled to begin in the first quarter of 2027, with a combined estimated cost of  Rs 4,033 crores, fully financed by the Government of India.[3] These initiatives fall under India’s Rs 10,000-crore development assistance commitment to Bhutan’s 13th Five-Year Plan (2024–2029). Beyond its infrastructural scope, the project carries clear strategic and developmental significance for both countries.

Existing Connectivity Framework and Structural Constraints

The contemporary partnership between India and Bhutan is defined by deep economic interdependence, shaped as much by geography as by policy choice. As a landlocked country, its access to external markets is structurally contingent on transit through India, resulting in a highly asymmetrical yet mutually reinforcing economic relationship. India’s share in Bhutan’s total trade increased from 79.17 per cent in 2023 to 79.88 per cent in 2024. In absolute terms, bilateral trade between India and Bhutan reached Rs 12,669 crore in 2024, with India’s exports accounting for Rs 9,538 crore and imports from Bhutan at Rs 3,131 crore.[4] Most of these products are essential commodities. Additionally, to facilitate the movement of people, including third-country nationals, an Immigration Check Post was inaugurated in Darranga, Assam, on 7 November 2024. The Jogigopha Inland Waterway Terminal, inaugurated in January 2025, will further enhance regional trade connectivity. India accounts for the overwhelming share of Bhutan’s trade and functions as its principal gateway for third-country commerce.

Despite this level of integration, the physical infrastructure underpinning bilateral trade remains limited in scope. Connectivity is overwhelmingly road-based, routed mainly through Assam and West Bengal via Guwahati–Samdrup Jongkar, Jaigaon–Phuentsholing, and Bongaigaon–Gelephu.[5] While these corridors facilitate routine cross-border movement, they are constrained by higher logistics costs, lower carrying capacity, and vulnerability to seasonal and terrain-related disruptions.

These constraints are most pronounced in Bhutan’s southern belt, where key nodes such as Gelephu, Phuentsholing and Samtse serve as primary gateways for cross-border exchange. Their geographic proximity to India positions them as natural transit hubs; however, their current role remains limited by the absence of multimodal infrastructure. Importantly, the lack of rail connectivity is a significant gap. Early momentum towards establishing rail links took shape........

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