Delay, hassles in Indian transit raise Nepal’s cost of trade: Report

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Landlocked Nepal can substantially reduce the cost of its foreign trade if transit procedures in India are simplified and transport service is effective, according to a report by the International Trade Centre (ITC).

Most of Nepal’s export and import shipments pass through road or rail transport transit in India to or from the port in Kolkata. Companies involved in export and import said during the ITC survey that the port operations in Kolkata are not efficient, as per the report. “There is no provision of allotment of railway wagons on priority basis for loading and transportation of Nepal’s transit cargo at Kolkata and Haldia ports,” the Himalayan Times quoted the report as saying.

Importers are also facing problems because of insufficient and delayed supply of wagons. Similarly, warehouse space available for Nepal at the ports is insufficient and there is no separate yard for containers, as per the report.

Due to the shortage of wagons and racks, importers have to transport consignments part by part particularly in cases of bulk cargoes. The report says that Nepali importers in such cases have to pay penalty charges not only for delaying a portion of the cargo but on the whole cargo. “In addition, companies have to pay demurrage charges at the port for transit goods that have not been cleared due to conditions beyond the control of traders, such as labour strikes and delays in transport by the rail operator – Container Corporation of India (CONCOR),” says the report.

Citing the Nepal government’s study that Nepali traders are paying almost $69 million in demurrage charges per year at Kolkata port, the report has also highlighted that the delays in clearing result in high warehouse charges and increase the risk of goods getting damaged, especially if they are seasonal or perishable.

It also says that due to lack of office of shipping liners in Nepal, traders have to rely on Kolkata port agents and booking agents for export of cargo containers that become very troublesome.

The report has also mentioned the poor road conditions between Kolkata and the Nepal border.

Nepal-bound cargoes imported from third countries are ferried via both road and rail. Around 50 per cent of the cargo volume is ferried via road. In transit between Kolkata to Birgunj of Nepal, there are two road corridors. In Kolkata-Jasidhi-Barauni-Raxaul, the road at Kiul is very narrow, making the journey slow and difficult. Likewise, in the second corridor, Kodama Ghati that passes through hilly terrain is difficult for long-truck trailers. Congestion and lack of adequate parking spots at the border points in Raxaul and Panitanki cause difficulties, Himalayan Times quoted the report as saying.

The report has also highlighted that the additional entry and exit fees for Nepali cargoes and charges levied by the Indian customs and agents under various headings, like shipping line charges, haulage charges, port handling charges and container clearing charge add to the burden on Nepali traders.