The train will run from Jayanagar in Bihar to Kurtha in Dhanusa district in Janakpur Zone of south-eastern Nepal, which is a 34 km stretch.
An immigration check-post is likely to be established at Jayanagar station manned by either the Bureau of Immigration or the state government. No visa will be required for Indian and Nepalese nationals crossing the border through this stretch, a source said.
The Nepalese authorities have informed the railways that the section will be opened with four trips and will ply in eight to 16 hour shifts.
While the first train is to be a passenger train, the Nepalese have stated that they want to run both passenger and freight trains on this section.
Nepal will take rolling stock — rakes, coaches and others — on lease from India for the purpose, another source said.
The ministry of external affairs have had several inter-ministerial meetings with the railways, government of Nepal and other stakeholders on this. More meetings to finalise logistics are likely to take place.
The move is being seen as part of efforts to counter China's plans to forge rail links with Nepal. After Beijing decided to extend its railway network up to Kathmandu, New Delhi proposed the construction of new railway links during Prime Minister K P Sharma Oli's recent visit to India.
Nepal and India have plans for four cross-border railway links, including one to link Raxaul to Kathmandu.
The Jayanagar-Kurtha rail line was originally built during the British Raj to transport logs from forests at Mahottari to India.
At that time, the line from Jayanagar in Bihar to Bijulpura in Mahottari was 52 km long. More than 15 years ago, floods swept away the Bighi bridge, disrupting railway services on the 29-km stretch from Janakpur to Jayanagar.
The Rs 5.5-billion (Nepalese Rs 8.8 billion) project is divided into three phases. The first includes construction of a 34-km segment between Jayanagar and Kurtha, the second comprises construction of an 18-km segment from Kurtha to Bhangaha in Mahottari district, and the third comprises construction of a 17-km segment from Bhangaha to Bardibas. Of the total length, only three kilometres is in Indian territory.
The sale of tickets, the source said, will be through an unreserved ticketing system and passenger reservation system in Nepal which will be facilitated by the railways.