KATHMANDU, Aug. 31 (Xinhua)-- Nepal and India signed a Memorandum of Understanding (MoU) Friday on conducting preliminary survey of a railway connecting Indian border town Raxaul to Nepal's capital Kathmandu.

The MoU was signed on the sidelines of fourth summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) that concluded in Kathmandu.

On April 7, the two governments had issued a joint statement on expanding rail linkages, agreeing to construct a new electrified rail line, with India's financial support, during the visit of Nepali Prime Minister KP Sharma Oli to India.

"The Raxaul-Kathmandu rail line is expected to expand connectivity by enhancing people-to-people linkages between the two countries and promoting economic growth and development," the Indian embassy in Nepal said in a statement.

Konkan Railway Corporation Ltd, India's state-owned company, has been entrusted to conduct the survey of the new railway.

According to Nepali officials, an Indian technical team has already started working on pre-feasibility study since the announcement of constructing the railway was made in April.