Alternative route

Since Nepal and Bangladesh agreed to open the shortest trade-transit route between the two countries in 1997, Dhaka is about to open a land port at Banglabandha in Panchagarh district next month. Following negotiations, Bangladesh has constructed a land port 19 km away from its Mongla Sea Port and houses an area of 8,500 square feet to accommodate other necessary offices. This link, no doubt, will be the business community’s preferred choice as the said dry port is only 56 km away from Nepal’s Kakarvitta border in eastern Jhapa district and just 19 km away from the sea coast. The nearest sea port Nepal has so far been relying is Haldia in West Bengal, hundreds of kilometres away. But it remains to be seen if the land port will indeed serve its purpose to the extent imagined by the businessmen in Nepal.

Given that freight to and from Nepal has to move through 56 km transit road across the Indian territory to reach Banglabandha, the success of the new trade link entirely hinges on India’s goodwill and cooperation. Nepal has a slew of trade accords with India, including an access to sea and dry ports. But instances of cargo to and from Nepal being hindered for reasons often associated with the business sentiments of the locations through which merchandise enter India are not uncommon. Meanwhile, Nepal and India have yet to agree on Nepal’s reasonable desire to have speedy customs clearance at its dry port, avoiding further hassles at Raxaul and elsewhere. In the past, there were also occasional incidents of outbound cargo from Nepal being held up at Indian check points. That it occurred only due to procedural delays has not been so convincing to the Nepali business community. The issue of Inland Container Depot, whereby Nepal is asked to pay customs duty twice for each container is also somewhat bothersome. In other words, moving freight through India is quite cumbersome. The new land port, one would like to hope, will ease the movement of goods to and from Nepal.

Reservations aside, Nepal’s newest link to sea should be a cause celebre among its business community. Meanwhile, Mongla Port in Bangladesh is willing to give a 50 per cent concession on all kinds of port charges on Nepal-bound goods. This is good news by any reckoning as this would drastically lower overall transport costs. This would also boost the current trade conducted through this route worth over Rs 650 million since the bilateral accord came into force. That Nepal’s import margin has so far greatly exceeded its export through this link means the concession offered at Mongla Port would benefit Nepali importers to a considerable extent. Nepal-Bangladesh trade will, it seems, receive a shot in the arm.