Due to the high cost and time incurred for third-country trade via India, the country is preparing to propose finalisation of trans-shipment modality with the southern neighbour during the Intergovernmental Committee (IGC) meeting, popularly known as commerce secretary-level talks.
Nepal is going to organise the IGC meeting this year in Pokhara and the date has been proposed for between the second and third week of April.
Nepal’s third-country trade is being carried out via India since long and the two countries have discussed trans-shipment modality several times to minimise the time and hassles in third-country trade, which will subsequently bring down the cost of trade.
High cost of importing raw materials is considered to be the one of the major factors behind the incompetency of Nepali industries. The government believes that there is a prospect of industrialisation in the country for a sustainable foundation for economic growth if the cost of third-country trade is minimised.
Against this backdrop, the commerce secretary-level talks will take the agenda of finalisation of trans-shipment modality forward during the meet. Earlier, Nepal had proposed the modality that the government of India has already brought into practice through model of Jawaharlal Nehru Port Trust (JNPT) to Inland Container Depot Tughlakabad, which is close to the Indian capital.
Subsidiary of Indian Railways — Container Corporation (CONCOR) — is authorised to ferry containers from the port to ICD Tughlakabad.
As per officials of the Ministry of Industry, Commerce and Supplies, if the Kolkata and Visakhapatnam ports affix additional seals on Nepal-bound containers and CONCOR ferries it to ICD Birgunj, then the procedural hassles related with documentation, customs transit declaration, detention and demurrage charges, among others, could be avoided during transit and the customs clearance process carried out in Nepal.
If the modality is finalised and the pact is signed, there will be substantial achievement in the next IGC meeting, a source at the ministry told The Himalayan Times. “Once the agreement is signed, Nepali traders will not have to issue necessary documents from Kolkata port in India while exporting and importing goods that is full of hassles, is time consuming and uncertain.”
As of now, imports from third countries are being delivered to Nepal through bills of lading from Kolkata.
According to a study conducted by the government, Nepali importers have been paying demurrage charges worth $68.8 million per year at the Kolkata port as the port starts levying demurrage charges if Nepal-bound cargo is not dispatched within 14 days. As per traders, it takes a minimum of two weeks to complete the port procedures to dispatch cargo to Nepal.
As per officials, ICD Birgunj is now registered on the map of international ports and they’ve informed the World Customs Organisation and the International Chamber of Commerce about the recent development. Likewise, as ICD Birgunj gets recognition as an international port location, it will be a milestone to sign the trans-shipment agreement with India. ICD Birgunj is the only rail-linked ICD in Nepal.