Nepal | May 26, 2019

Trade experts seek simplification of transit procedures in negotiation

Agence France Presse

Kathmandu, February 22

Trade experts have suggested the government to negotiate better with the southern neighbour in a bid to simplify processes related to transit facility. The call has come as the government of India has agreed to provide two additional transit corridors to Nepal for third country trade during the ongoing visit of Prime Minister KP Sharma Oli to the southern neighbour.

Though the framework agreement has been signed, the country still has to finalise the process-related matters to utilise the transit facility extended by India.

Relatively higher transit and transport costs as compared to regional economies have been identified as the major barriers for landlocked Nepal in becoming more competitive and luring investment from abroad, said Purusottam Ojha, former commerce secretary.

Based on the arrangements of multilateral trading system and regional trade agreements, the country should focus on how it can reduce the time and costs of trade, which directly influence the environment of investment, he said. “Through this, the country can reduce the cost of doing business and could attract investment.”

On the ground of multilateral and regional trade agreements, Nepal can seek dedicated freight corridor, simplification of customs transit declaration process, customs harmonisation, among others.

As pacts were signed during prime minister’s visit, the procedures of utilisation of Visakhapatnam Port, rail-transport facility to and from Visakhapatnam Port to Nepal for Nepal-bound cargoes and rail transit facility through Singabad for Nepal’s trade with and through Bangladesh will be discussed and finalised during commerce secretary-level talks scheduled for April, as per Rajan Sharma, president of Nepal Freight Forwarders’ Association (NEFFA).

Speaking during an interaction programme organised by Society of Economic Journalists Nepal, here today, Sharma urged the government to set up the Consulate General’s Office in Visakhapatnam like the one existing in Kolkata.

Citing a study conducted by NEFFA few years back, Sharma said that the cost of third country trade can be reduced by around 15 per cent if traders are able to bring in cargoes on the mother vessel at Visakhapatnam. The cost of trade at present is higher because the cargoes from third country are transferred to a smaller vessel in Singapore before they arrive at Kolkata. Kolkata Port is a riverine port. Due to its shallow water level, mother vessels cannot arrive at Kolkata Port, whereas Visakhapatnam is deep-sea port, which can serve huge ships.

The opening of Visakhapatnam Port to Nepali traders, as per Sharma would provide more alternatives to them while bringing goods. “Since they would be able to negotiate with both ports and obtain more facilities, the logistics costs could be brought down,” explained Sharma.

A version of this article appears in print on February 23, 2016 of The Himalayan Times.

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