Nepal | August 11, 2020

Delay and hassles in Indian transit raise Nepal’s cost of trade

Himalayan News Service
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Kathmandu, October 17

Nepal can substantially reduce the cost of its foreign trade if the transit procedures in India are simplified and transport service is effective, says a recent report unveiled 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 operation in Kolkata is 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.”

It is not only the hassles due to lack of high-speed railways and roadways for transit transportation, importers are also facing problems because of insufficient and delayed supply of wagons. Similarly, warehouse space available for Nepal at two 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 has mentioned 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 being damaged, especially if the goods are seasonal or perishable.

“Administrative hurdles at the port and multiple checking agencies at the border affect the total transit time,” as per the report. “Minor discrepancies in documentation (tonnes, pieces, value and date) that do not tally with the letters of credit (LCs) also lead to delays in clearance and demurrage charges at the port. On the other hand, 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. “Transit transport operators note that while it should not take more than two or three days to cover the distance between Nepal and Kolkata, bad road conditions mean that the journey takes at least seven days.”

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, as per the report.

Similarly, cargoes from Kolkata port need to travel mainly through three Indian states — Bihar, Uttar Pradesh and Bengal — and the traders have complained about the additional costs and hassles.

The ITC 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, as per the report.


A version of this article appears in print on October 18, 2017 of The Himalayan Times.


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