Diversification of transit route is a must for generating more trade to lure more investment, said Purushottam Ojha, trade secretary addressing an interaction on 'Jwaharlal Nehru Port, Mumbai - an alternative transit corridor for Nepal's Exim Trade with Third Countries,' organised here today by Nepal Intermodal Transport Development Board (NITDB) in association with Enhancing Nepal's Trade Related Capacity (ENTRec), Ministry of Commerce and Supplies and UNDP.
"Exploration of alternative transit route is the need of the hour," he said adding that until Nepal manages its transit facilities, it cannot exploit its competitive advantages. Cost of trade and on time delivery are the keys to export trade that depends solely on transit routes.
In principle, the South Asian regional block has agreed on transport connectivity to enhance regional trade. "A decade has elapsed but we are still working on the feasibility of the Jawaharlal Nehru Port, Mumbai," said Uday Raj Pandey, acting president of Garment Association of Nepal (GAN) that exports 60 per cent of its products to US markets. During all these years, Nepal has been using Kolkata Port that is the shortest distance for Nepal to transit its exports.
"However, there are various problems in Kolkata port," Pandey said adding that procedural hassles were hindering the exports-imports (ExIm) trade.
"Jawaharlal Nehru Port, Mumbai, may not be able to handle Nepal's exports as it is already handling India's 65 per cent container traffic," he said.
Agreed S K Mudigonda, IRTS (retd), consultant for the feasibility study of Jawaharlal Nehru Port, Mumbai. "The traffic offering at JNPT, the busiest port, is growing on a fast track," he said adding that the rail route connecting Birgunj Dry Port and JNPT is approximately 1947 km, more than the double the distance from Birgunj to Kolkata Port.
He also suggested alternative ports like Mundra, Pipavau and Kandla on the west coast and Vishakhapatanam Port on the east coast that are about 2,315-km, 2,373-km, 2,263-km and 1,420-km respectively from Birgunj. "However, transit costs are cheaper by INRs 4,000 to 5000 for 20 containers and INRs 2,000 in case of 40 containers," he said adding that the difference in terminal handling charges among the suggested ports was not significant compared to the transit costs.
Indian has also agreed in principle to allow Nepal use JNPT, Mumbai "but has asked for more concrete proposals," said Shiv Raj Bhatta, National Programme Manager at the Enhancing Nepal's Trade Related Capacity Project.
A land-locked country like Nepal has its own troubles while doing trade," he said adding that the cost of trade and time of delivery were key. "A land-locked country cannot manage both." Depending on only one port will not help smoothen Nepal's trade. "Alternative transit route is necessary," Bhatta said.
Pandey, however, pointed out that homework was needed before going for any of the ports in view of bitter experiences in the past and added that half-baked agreements would hurt Nepali industries even more.
Trade facilitators
Inland Clearance Depot (ICD) - also called Dry Port - is a common user inland facility, other than a port or an airport, approved by a competent body, equipped with fixed installations and offering services for handling and temporary storage of any kind of goods (including container) carried under customs transit by any applicable mode of inland surface transport, placed under customs control and with customs and other agencies competent to clear goods for home use, warehousing, re-export, temporary storage for onward transit and outright export. There are three ICDs - Birgunj, Biratnagar and Bhairahawa Dry Ports while two more Mechi and Tatopani are the offing.
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