Nepal seeks change in logistics to cut trade cost

Kathmandu, July 28

Prime Minister KP Sharma Oli said on Sunday that the trilateral transit arrangements involving Nepal-India and Bangladesh would change the logistics landscape of the sub-region.

"With such arrangements, we can explore the possibilities of utilising inland waterways in this sub-region going beyond the road and rail networks," Prime Minister Oli said while addressing the India-Nepal Logistic Summit 2019.

Bangladesh had permitted Nepal to use the facilities at the Mongla Port since September 1997, following the opening of Kakarbhitta-Phulbari-Banglabundh transit route. It has also permitted additional rail corridor to Nepal via Rohanpur-Singhabad for transit.

However, these transit facilities with and through Bangladesh for Nepal’s international trade are yet to be operationalised, Prime Minister Oli said.

He also suggested enhancing cooperation under the BBIN (Bangladesh-Bhutan-India-Nepal) framework to improve connectivity and logistics.

Stating that it was critical for a landlocked country like Nepal to be connected with the neighbourhood, region and to the rest of the world, the Prime Minister lamented that despite improvements made over the years, Nepal was still bearing the brunt of high logistic cost in the transit transport of goods, both export and import. 

"Nepal cannot afford this," he said, and maintained that the only way to reduce the high trade cost is to upgrade and streamline both hard connectivity of infrastructure and soft connectivity in terms of administrative procedure.

He also underscored that connectivity remains a topmost agenda in Nepal-India bilateral cooperation framework.

Prime Minister Oli expressed happiness that his vision for inland waterways was being translated into reality.

"There exists an organic linkage between the mighty Himalayas and the oceans in ecological terms.  By promoting waterways, we would be building economic and commercial linkages between them. The whole idea is to greatly facilitate the movement of goods, services and people and promote overall connectivity," he said.

Nepal has already established a shipping office, and technical experts from both sides are studying other details for making waterways operational in the rivers of Nepal and India at the earliest possible time.

According to Prime Minister Oli, inland waterways will be a game changer in transport transit system. It will not only reduce cost of transit transport but also diversify transit transport options. It will benefit both the countries.

"This is the kind of innovation and dynamism we want to inject into our cooperative partnership," he said.

He stated that although the roads had been widened at the both sides of Nepal-India border and travel time of cargo trucks had been cut short, severe bottlenecks still existed in terms of the quality of roads connecting north India's national highways to key points at the border.

"Cargo trucks still queue for hours and creep on these poor stretches," he said.

Prime Minister Oli demanded reciprocal arrangement of granting permission to vehicles at the border points.

Bilateral motor vehicle agreement of 2014 between the two neighbours is in operation. It has the potential to facilitate movement of people across the border in a smooth manner, but Nepali vehicles face hassles while getting permit for movement in India.

"In view of the changing dynamics of trade and transit, we have initiated review of both transit treaty and railway service agreement. Further simplification of transit process would bring positive impact on economic growth and development of Nepal," PM Oli said.

According to him, transhipment of consignment up to land ports in Nepal; full implementation of electronic cargo tracking system; diversification of railway points in Nepal and operationalisation of soon-to-start Nepal railway for transit transport are some of the key issues requiring thoughtful consideration by India.

Another issue is the access to new ports in India. Nepal has requested India to provide Dhamra, Odisha and Mundra, Gujrat ports facility.

"We are hopeful that these will be realised soon. Nepal, on its part, is ready to take the needful action," said Prime Minister Oli.

He suggested developing dedicated freight corridors between ports in India and land ports in Nepal, both dedicated, uninterrupted rail and road corridors.

On administrative aspect, it would be easier for traders if the operation hours of customs on both sides would be extended.

According to him, delivery of cargo from ships at Kolkata and other ports directly to Nepal-bound trucks can phenomenally help reduce congestion in the port, cost of transportation and saving of time.

"Both countries should establish efficient testing facilities for their export products close to their borders along with smart certification services to ensure the delivery of qualitative and hygienic products," he said.

Indian Ambassador to Nepal Manjeev Singh Puri said that that lowering trade cost between Nepal and India would be a game changing situation.

N. Sivasailam, Special Secretary (Logistics) at the Ministry of Commerce and Industry, India, said that multiple efforts to facilitate trade between the two countries were initiated lately.

"We are doing our best to improve the logistic situation in India, it will automatically benefit Nepal's trade with India and the third countries," he said.

Bhawani Rana, President of Federation of Nepalese Chambers of Commerce and Supply (FNCCI), said that the summit would create greater awareness about the logistics situation in terms of Nepal-India trade, and further strengthen the cooperation between the two countries.

The Summit is organised by the FNCCI, Ministry of Industry, Commerce and Supply and Maritime Logistics – an Indian magazine.

Published in The Rising Nepal daily on 29 July 2019.