Experts suggest improving cross-border trade infrastructure

 Kathmandu, Sept. 7

Trade and freight experts have suggested applying the Electronic Cargo Tracking System (ECTS) in trucks and containers inbound to Nepal border from the Indian ports and electrify the cross-border railway section from Raxaul to Birgunj.

RB Rauniar, Secretary General of the Nepal India Chamber of Commerce and Industry (NICCI) and Managing Director of Interstate Multimodal Transport Company, said that while the trains bring the cargo to Raxaul, a city in India across Birgunj border, in about 36 hours but it take a couple of days to transport the goods to Birgunj located at a distance of about 3 km. This section has become a bottleneck in Nepal's international trade.

Birgunj is the border point through which most of the imports enter the country.

"There is a need to electrify the railway from Raxaul to Birgunj. It will facilitate the trains to directly bring the cargo in the dry port in Nepal. It will reduce the time and the cost of the goods transportation," he said. The two countries are planning to upgrade the existing railway line into an electrified one.

Likewise, the cargo transportation of goods should also be tracked to make it efficient and fast, Rauniar suggested. Traders and freight forwarders have asked the government to apply the ECTS, which is applied in the rail transportation, in the trucks and containers.

Rauniar said that the India-imposed non-tariff barriers were impinging on the export trade of Nepal.

Likewise, inadequate and inefficient transport and border infrastructure have affected the export trade while customs procedures and documentation are burdensome and lack harmonisation between the cross-country customs.

"So, we need an effective institutional mechanism to address the imminent issues and control the unauthorised trade," said Rauniar. 

Saibal Ghosh, Vice-president of NICCI and Country Manager of Berger Jensen and Nicholson Nepal, said that the absence of raw materials in the country and poor trade infrastructure had increased the cost of made in Nepal products.

According to him, the import of raw materials from India or third countries has diminished the chances of exporting the goods to India as the cost of production is one and a half time high in Nepal.

"Although major Indian investment has come to hydropower and manufacturing, investors are apprehensive about investing in the latter," he said. "Intellectual property issue has also negatively impacted in the Foreign Direct Investment. When a multinational company expands its businesses in Nepal, it gets surprised that its brand was already registered by someone else," he added.

Chairperson of NICCI Shreejana Rana said that the business communities of the two countries as well other regional members should work together to fight the pandemic and promote cross border trade.

"We are working to take the bilateral business relations to newer height and address the challenges in cross-border trade, industry and investment. We must continuously discuss the challenges in bilateral trade in goods and services among the governments and private sectors of both the countries," she said.

Likewise, another VP of NICCI Sunil KC said that Nepal Innovation House would be established to attract investment in the start-ups in Nepal.

Published in The Rising Nepal daily on 8 September 2020.