NEW DELHI: The Government of India today approved the new Air Services Agreement (ASA) initiated between India and Nepal in September last year.

The new legal instrument will allow a five-fold increase in the weekly air seat capacity from the existing 6,000 seats to 30,000. The agreement is expected to give Nepal's trade and tourism a significant boost. In the agreement, three new points have been given to Nepal -- Dehra Dun, Gorakhpur and Bagdogra, while India has been given Pokhara, Lumbini, Biratnagar, Nepalgunj, Janakpur, Dhangadi and Bhairahawa.

"This ASA has the potential to spur greater trade investment and tourism and strengthen the cultural exchange between the two countries, besides bringing it in tune with the developments in the international civil aviation scenario," a statement issued by the Government of India here said. "Both the countries shall now be entitled to designate any number of airlines for operation of mutually agreed services for which the respective country shall grant appropriate authorisation and permission," the statement added.

Another important provision in the agreement is the facilitation of cargo services.

The designated airlines of each party will be entitled to operate any number of all-cargo services between each other's territory with any type of aircraft with full right to fly passenger and cargo flights to each other's country, right to fly back passenger and cargo flights from each other's country and freedom traffic rights (right to take passengers and or goods from each other's country), according to the new agreement.

Such all-cargo services may also be operated under co-operate marketing arrangements such as code sharing, blocked space etc.

Sources at Nepal airlines said the new agreement opens avenues for Nepali private airlines to operate on the international route, while the seat increment was more than enough for Nepal.