Nepal-India Transit Treaty renewed without changes

The Nepal-India Transit Treaty has been renewed without any changes to the existing treaty, though Nepal had been seeking some changes that could have facilitated trade with other countries in and outside the region.

"The transit treaty has been renewed without any changes," according to the Ministry of Commerce and Supplies. The bilateral treaty — earlier renewed seven years back in 2006 March — was set to expire on January 5.

"The treaty has a provision of automatic renewal, until and unless either side needs to add or remove certain provisions," the ministry said, adding that Nepal, had, though sought some changes.

While preparing for the renewal, Nepal had asked India to provide access to five more trade and transit routes between Vishakapatnam sea port and four major customs, rail route between Birgunj dry port and Vishakapatnam, and Rohanpur-Singhabad-Jogbani and Phulbari-Banglabandha.

The Nepali team had also sought an optional port for trade facilitation, which India had also agreed to in principle. The ministry had sent a formal request to New Delhi for a renewal of the transit treaty with changes through the Ministry of Foreign Affairs.

But in the last hour, claiming that India's proposal of imposing additional lock on containers ferrying third country consignments will be against international norms and undermine Nepal's transit rights, the Ministry of Foreign Affairs objected to it, though the Ministry of Commerce and Supplies and importers have been saying that additional lock will not create any hassles.

President of Nepal Freight Forwarders Association Rajan Sharma opined that the country could have gained more, had the treaty seen some changes.

The bilateral transit treaty that confers transit rights through each other’s territory through mutually agreed routes and modalities has offered Nepal 22 transit routes from Kolkata/Haldia for third country trade. "Goods can move by road or rail," it states, adding that the establishment of an inland container depot in Birgunj and extension of the railway line from Raxaul to Birgunj has facilitated direct movement of goods in transit by rail to Nepal.

India has extended Nepal direct transit routes to Bangladesh for bilateral and third country traffic under the treaty that has notified road route through Kakarbitta-Panitanki-Phulbari-Banglabandha corridor and rail route through Radhikapur-Birol interchange point on India-Bangladesh border.

India — the largest trade partner and source of foreign investment — is also the only transit providing country for Nepal.

Nepal’s transit trade is routed through 22 designated routes from India-Nepal border to the port of Kolkata/Haldia. In addition, Nepal’s trade with and through Bangladesh also transits through India.

New Delhi is also providing assistance for the development of cross-border trade related infrastructure including upgradation of four major customs checkpoints at Birgunj-Raxaul, Biratnagar-Jogbani, Bhairahawa-Sunauli and Nepalgunj-Rupediya to international standards, upgradation approach highways to the border on the Indian side, upgradation and expansion of the road network in the Tarai region and broad gauging and extending rail links.