Ratification of LoEs to ease transport of import cargo

KATHMANDU, MAY 11 -

The Ministry of Commerce and Supplies (MoCS) is preparing to send two Letters of Exchange (LoEs) related to providing additional routes for break bulk cargo and permitting use of Indian roads by Nepal-bound automobiles imported from third countries to India for its approval.

The southern neighbour had agreed to provide these facilities during the Inter-Governmental Committee (IGC) meeting of commerce secretaries held in December 2013, and they can be implemented by okaying bilateral LoEs. The Commerce Ministry has forwarded the documents to the Foreign Ministry following their approval by the Cabinet.

Jib Raj Koirala, joint secretary at the Commerce Ministry, said that after the documents are ratified by the southern neighbour, Nepal’s foreign trade with third countries will be facilitated as the existing non-tariff barriers will be eliminated.

After the first LoE is endorsed, Nepali traders will be able to use two additional customs points at Jogbani-Biratnagar and Nautanwa-Bhairahawa for the import of break bulk cargo. Currently, such shipments are allowed to enter Nepal only through the Raxaul-Birgunj customs point. Besides allowing use of these customs points, the LoE also contains a provision simplifying the import procedures for sugar, fertiliser, coal, cement and other products.  

Currently, Nepali traders have to obtain advance approval from the Indian authorities at Kolkata Port and the customs office at Raxaul to import break bulk cargo. Moreover, importers need to get the recommendation of the Nepali consulate general’s office in India before applying for this paperwork. According to MoCS officials, the entire process takes a minimum of two weeks.

Koirala said the new provision would save Nepali traders time and money as it would allow them to use any route to Nepal after simply informing the Indian authorities. Likewise, according to the second LoE, Nepali traders will be able to drive Nepal-bound imported automobiles over Indian roads. India had agreed to provide this facility during the IGC meeting held in Kathmandu following persistent demands by Nepali auto importers.

Currently, traders have to bring imported motor vehicles to Nepal through India by rail or car transporters which increases their costs. Importers may also have to wait for several weeks to accumulate a full rack enough to fill 40-50 cars of a freight train.  

Earlier, the two governments had approved an LoE related to allowing re-export of machinery and other goods to third countries through India. This provided relief to Nepali traders and entrepreneurs who had been having a hard time getting their imported machines repaired as they needed to be sent to the country of manufacture for expert attention.

Source: The Kathmandu Post