China’s economy and India’s economy are developing at high speed and the bilateral trade and personnel interflow between the two countries are also growing at high speed. Although China and India are neighbouring countries, the passenger and freight interflow between the two countries is mainly conducted by airline and sea, which cannot meet the requirements of transportation in the future. Furthermore, Nepal, a neighboring country of both China and India, is in great need of an international railway so as to boost the economy development. In the paper, the bilateral trade between China and India by 2050 is forecast by means of Gravitation Model; The demand of the freight and passenger transport of ChinaNepalIndia railway is forecast on basis of the relationship between the freight volume and trade volume and the relationship between GDP per capita and passengers, and thus the necessity to build ChinaNepalIndia railway is analyzed; Furthermore, the construction investment and the payback period of the railway are estimated based on the characteristics of the possible railway alignments and similar railway projects; Finally, the economic, social and environmental significance of the railway is discussed.