India to provide two more trading routes

KATHMANDU:

India has agreed to provide transit facility for bulk cargo movement from two additional trading routes, which will save time and logistic cost for traders importing commodities such as chemical fertilisers, cement, iron ore and coal.

The two agreed routes are Kolkata-Nautanwa (Bhairahawa) and Kolkata-Jogbani (Biratnagar). Bulk cargo generally refers to goods ferried in open railway wagons. Currently, bulk cargoes are entering Nepal via Kolkata-Raxaul (Birgunj) route. This means goods such as chemical fertilisers, cement, iron ore and coal at present arrive at only one border point in Birgunj before they are transported to other parts of the country.

Once the new provision comes into effect, these goods can be directly dispatched to customs points at Bhairahawa and Biratnagar as well from Kolkata port.

“India has already endorsed the draft of the letter of exchange (LoE) on ‘Process Simplification and Additional Route’ proposed by Nepal,” Jib Raj Koirala, joint secretary of the Ministry of Commerce and Supplies (MoCS), said. “We will now forward the document to the Cabinet for final approval. Upon getting the Cabinet’s approval, we will send the document back to India via the Ministry of Foreign Affairs, following which the final LoE would be signed.”

After the LoE is signed, the government would need to sign railway service agreement to bring in bulk cargoes through the agreed routes. Final LoE on railway service agreement has been forwarded to India for approval.

“Once the new provision on bulk cargoes comes into effect, logistic cost of ferrying various goods would come down. Also, traffic on Kolkata-Birgunj route would come down, which will reduce travel time,” Rajan Sharma, president of Nepal Freight Forwarders Association (NFTA) told The Himalayan Times. The opening of two new routes, according to Sharma, would also raise effectiveness and efficiency of domestic distribution system, which will ultimately reduce the cost of goods.

This is because goods, such chemical fertilisers, cement, iron ore and coal, are currently being distributed throughout the country from Birgunj. Once the two new trading routes for bulk cargoes are opened, Biratnagar will start serving the demand of eastern Nepal, while Bhairahawa will emerge as the hub for distribution of goods in the country’s western part.

However, the NFTA has asked the government to incorporate provision on ‘break-bulk cargo’ while signing the LoE ‘as lack of this clause may prevent Nepali traders from importing goods like chemical fertilisers, which are packed in sacks but are ferried using open containers’.

India had principally agreed to let Nepal use two additional routes for movement of bulk cargoes during Nepal-India commerce-secretary-level talks held in Kathmandu from December 21-23. During that meeting, Nepal had asked India to open Kolkata-Rupaidiha (Nepalgunj) route too. But India has settled for Bhairahawa and Biratnagar routes for now.

India is reluctant on providing more routes for movement of bulk cargoes as such goods are transported in open

containers, which, according to India, tend to pose security threat.

Altogether, Nepal and India have opened 27 routes for bilateral trade, of which 15 are used for trading with third countries.

Source: THT