Nepal is setting its sights on Mumbai as a transit point for third country trade, and has started work to construct a dry port in Dodhara Chandani on the western border with India which offers the shortest route to the sea.

The inland terminal will provide access to India’s largest seaport, Jawaharlal Nehru Port in Mumbai, and facilitate Nepal's foreign trade and lower costs, officials said. Dodhara Chandani dry port will be the first business gateway to India from Nepal's far west.

The Intermodal Transport Development Committee under the Ministry of Industry, Commerce and Supplies has started a study at Mayapuri and ​​Gaurishankar community forests as possible sites for the dry port.

"We have started preparations to conduct a feasibility study for the dry port," said Ashish Gajurel, executive director of the Nepal Intermodal Transport Development Board.

Nepal had broached the subject of building a dry port at Dodhara Chandani in Kanchanpur district during a meeting of the Inter-Governmental Committee on Trade, Transit and Cooperation to Control Unauthorised Trade held on December 7, and the Indian side was agreeable to the proposal, officials said.

India also agreed to construct an Integrated Check Post on the border which would be connected to the dry port by a railway line.

The Nepali side consented to prepare a detailed feasibility study of the inter-country economic zone in the Dodhara-Chandani-Banbasa area.

Banbasa town lies across the border in Champawat district in Uttarakhand state, and is the most well known crossing point into Nepal from India.

The proposed dry port and Integrated Check Post will be spread over 280 bighas of land, said Prakash Dahal, joint secretary at the Industry Ministry. “The study process has moved ahead after identifying the potential construction site.”

According to Dahal, a preliminary study has shown that not many trees will have to be cut down for the project. The local administration and people have agreed to expedite the project that has remained on the drawing board for years.

“The dry port will provide the shortest route to two key ports—Mundra Port, India's largest private port in Gujarat, and Jawaharlal Nehru Port in Mumbai,” Dahal said. “Transporting goods to Nepal through these routes will result in a substantial saving.”

Most of Nepal's trade infrastructure is concentrated in the country's east to connect with Kolkata port, and the construction of a dry port in Sudurpaschim province may facilitate access to more ports in India in the future, officials said.

“It will be the trade gateway in the far west region with railway connectivity to different Indian states,” he said. “The site is strategically important and beneficial for trade and transit for Nepal.”

In November, a high-level delegation from the Ministry of Industry, Commerce and Supplies including Minister Lekh Raj Bhatta and secretaries Chandra Kumar Ghimire and Baikuntha Aryal made a field visit to take stock of the development of the first dry port in far western Nepal.

The World Bank had conducted a feasibility study for the proposed dry port at Kanjabhoj in Dodhara Chandani Municipality a decade ago, and the Nepal Intermodal Transport Development Board had prepared another report in 2016.

A technical committee was formed under the chairmanship of Prakash Dahal, joint secretary of Ministry of Industry and Commerce, to conduct the study in October. The team report stated that the proposed site was suitable for building the facility, said Gajurel.

"We have planned to complete a detailed feasibility study within two years," Gajurel said. “We have already appointed the consultant to conduct it.”

According to him, a master plan will be ready within three months, and a detailed project report (DPR) and environmental impact assessment (EIA) will be completed within two years. "It will take another two years for the construction of the dry port," he said.

Shreedhar Gautam, under secretary at the Industry Ministry, said Indian officials had informed them that they had started preparations for an Integrated Check Post in the Banbasa area.

According to Gautam, the Indian side has proposed to construct the facility on the upper part of Kanjabhoj as the previously proposed site lies within a national forest in India.

As per a recent study conducted by Dahal’s team, 350 bighas of land is available in Mayapuri and Gaurishankar community forests.

Gautam said the land would be suitable for a dry port and an Integrated Check Post. He said that the Indian side had already started the process of building a road.

According to the survey conducted by the World Bank, the dry port is estimated to cost Rs5 billion, said Gajurel. The study at that time showed the need to build a concrete bridge in Mahakali.

He said that the bridge was in the final stage of completion, and that it would make things easier for the construction of the dry port. The study had identified the proposed area as the first option, he added. The previously proposed Kanjabhoj has been kept as a third option.