Nepal | December 12, 2019

Cabinet okays ECTS modality

Himalayan News Service

Kathmandu, January 13

The Ministry of Commerce (MoC)’s plan to implement the electronic cargo tracking system (ECTS) will come into force in the near future as the recent Cabinet meeting has approved the modality of the ECTS submitted by the ministry.

Following the Cabinet’s approval, the MoC is gearing up to implement it as the vendor has already been selected for this purpose under the assistance of the Asian Development Bank.

ECTS is expected to bring reliability and timely delivery of Nepal-bound cargoes via Indian transit.

“The ECTS will control the turnaround time of shipping line containers and is expected to reduce the high demurrage and detention charges being incurred by Nepali importers due to delay in returning the containers to the shipping lines,” said Ravi Shanker Sainju, joint secretary at the MoC. “Moreover, if the country can minimise the time consumed in trade, we can reduce the cost of goods as well, and it will create prospects for industrialisation because the import cost of raw materials will go down.”

It takes 40 days for Nepal to complete third-country trade, against just 14 days taken in neighbouring India.

Shipping liners normally provide a 21-day turnaround period, which means that Nepal-bound cargo containers that leave the Kolkata port must be returned to the shipping liners within 21 days after unloading the goods in Nepal. However, traders are often slapped demurrage charges as they miss the deadline due to delay by Indian Railways and congestion in the dry port, among other reasons.

The ECTS will monitor Nepal-bound cargo containers. The MoC, with support from ADB, has already selected the vendor to instal electronic device on the cargo containers bound for Nepal. In the beginning, traders can avail this service voluntarily for the first 90 days. Thereafter, ECTS will be mandatory for Nepal-bound containerised cargoes, as per MoC officials.

To avail the service traders will have to pay $45 per container and inform the Kolkata customs during the Customs Transit Declaration at the port customs office.

Currently, the port customs snap additional locks on Nepal-bound cargoes to ensure that the goods imported for Nepal are not sold in India. However, the port will not place additional locks on the cargo containers that avail ECTS service.

Moreover, the provision requiring purchase of additional insurance in India on import of sensitive goods will not be compulsory after ECTS is implemented, according to Sainju.

The Kolkata port customs, consul general of Nepal in Kolkata and the border customs points of India and Nepal will be able to simultaneously monitor the containers in which the electronic devices are installed.

The Indian government has also given a green signal to allow the movement of Nepal-bound cargoes to the nearest rail head at Jogbani after this system comes into force. Nepal has also proposed that Nepal-bound cargo be allowed to be ferried via rail to Nautanwa (nearest rail head from Bhairahawa) in containerised forms.

Currently, Indian Railways can ferry Nepal-bound cargoes via rail to the only rail-linked Inland Clearance Depot (ICD), Birgunj.

After enforcement of the ECTS, Nepal-bound containerised cargoes can be ferried to Jogbani from Kolkata and then to Nepal via road, which will lower the transportation cost because rail transportation cost is cheaper, as per officials.

Traders and freight forwarders have said that though the vendor has been selected to instal the electronic chip on containerised cargo, the Indian customs has yet to complete the administrative process to allow installing electronic cargo tracking system as well as removal of the additional one-time lock.


A version of this article appears in print on January 14, 2018 of The Himalayan Times.


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