India has agreed to establish laboratory testing units at Raxaul and Gorakhpur to determine the quality of Nepali food exports to India.

The two countries came to an agreement Sunday after extended secretary level talks to discuss bilateral trade and transit issues, an announcement said. India has also agreed to waive premium on leased property at Kolkata port.

India and Nepal agreed to improve physical facilities and infrastructure at border towns and provide security to Indian joint ventures in Nepal, a press release of the Ministry of Commerce and Supplies said. India will consider waiving excise duty on fuel for Nepali aircraft in India.

Nepali Commerce Secretary Bhanu Prasad Acharya and his Indian counterpart Prabir Sengupta signed minutes of 25 agenda items discussed at the Kathmandu meet since Wednesday at joint secretary and secretary levels. Talks will be resumed later in India.

The two countries failed to resolve the issue of five Nepali exports including vegetable ghee on which New Delhi seeks restrictions; India says Nepal is flooding India with these goods as New Delhi pressed for quantitative restrictions.

Nepal and India will continue discussions to start a direct rail link between the Birgunj dry port and Kolkata port besides the approval for certification of Nepal Bureau of Standards for Nepali exports.