RSA revision to allow private Indian railway ferry good to Nepal

Nepal and India will revisit a decade-and-a-half-old Rail Service Agreement (RSA) that is expected to allow private Indian railways to ferry goods to Nepal.
The two-day bilateral meeting to start from tomorrow in New Delhi will discuss around a dozen of issues including RSA, as the decade old agreement could not address the issues related to bilateral trade on the current times.
The joint secretary-level talks between the two countries will also review transit pact that will allow Nepal to use Indian sea ports closer to major customs points of western and far-western Nepal –Bhairahawa, Nepalgunj and Dhangadi – for third-country trade. Ferrying Nepal-bound freight via inland waterways will also be included in the transit treaty, according to the Nepali officials visiting New Delhi to take part in the meeting. “The Delhi meeting will discuss the extension of the service of containerised and bulk cargo, ways of utilising the extension of the Janakpur-Jaynagar railway for transit and railway links both metre and broad gauge.
With the increase in trade and transit with third countries, Nepali traders have been demanding an extension of railway services in all the trading points across Nepal but the 2004 RSA includes only the railway transit facility from Kolkata to Birgunj. The traders have also been requesting to extend the bulk cargo facility to other important transit points between Nepal and India.
According to joint secretary at the Ministry of Industries, Commerce and Supplies, who is leading the Nepali side, Nawaraj Dhakal, “Nepal is compelled to bring all the commodities imported from third countries via Kolkata to Visakhapatnam Port through Birgunj in the absence of bulk cargo facilities in other transit points.”
Nepal and India – last year in Kathmandu during the BIMSTEC summit – also held talks about the signing of the Letter of Exchange (LoE) regarding bulk cargo during the BIMSTEC summit in Kathmandu but failed to do so in the last minute.
“The talks in Delhi tomorrow will also focus on permitting Indian private rail operators to transport Nepal-bound cargo from Visakhapatnam and Kolkata ports to Nepal,” he said, adding that the bilateral meeting will focus on opening of other integrated check points like Bhairahawa, Biratnagar, Nepalgunj and Janakpur and giving access to Nepali and Indian railway companies to transport Nepal-bound cargo.
“Nepali traders are paying more money to CONCOR, as it has monopoly in transporting cargo services to Nepal,” according to Nepali traders, who have also been demanding to extend this facility to other transit points because it is increasing the cost of raw materials and decline in the competitiveness of domestic products.
At present, state-owned CONCOR has the monopoly in transporting Nepal-bound cargo. “But Indian private railway companies have pledged to provide their service at around 25 per cent to 30 per cent cheaper rate compared to CONCOR, if given the opportunity,” according to the traders. The amendment of RSA will pave the way for operationalisation of private railways to ferry Nepal-bound cargo from Indian ports to respective Nepali inland clearance depots.
“There is also a possibility of discussion on the implementation of an Electronic Cargo Tracking (ECT) System, which is currently in a testing phase,” Dhakal said, adding that there may also be talks on extending this system to other transit points.
Nepal and India had signed the RSA in 2004, which is obsolete. Though an extensive evaluation of the agreement had come time and again, Nepal and India held only two meetings – in 2009 and 2012 – since the signing of the agreement, but they could not come out with any conclusion.
Apart from RSA, both the countries will also discuss on amending Trade Treaty and Transit Treaty between the two countries on a reciprocal basis.
The Indian side has however requested extension of Export Import (EXIM) code for Indian nationals trading with businesses in Nepal and expressed concerns over protection of intellectual property of Indian products. The Indian side has also requested Nepal to remove duties and related charges on import of agricultural commodities from India.

Customs Department warns fake documents holders

The Department of Customs has warned that it may put around 67 per cent of the goods under the red customs clearance channel due to an increasing number of traders producing fake details on imported goods.
"Many importers are still producing fake documents," director general of the department Toyam Raya. "They have been manipulating the certificate of origin, under invoicing, declaring one product and importing another and issuing fake harmonised system code issued from foreign companies,” he said adding that the illicit activities have not yet stopped. "So we are forced to carry out tight scrutiny of the imported goods.
The imported goods typically pass through either one of the three customs clearance channels –red, green and yellow – in Nepal. Under the red channel, importers need to fulfill a lengthy documentation process. The customs authorities will perform an examination of the import documents as well as a physical examination of the goods.
Likewise, in the yellow channel, a thorough examination of the import documents is performed while in the green channel, the goods get automatic customs clearance.
"We have also planned to increase the access of importers through the green channel,” he said, speaking at an interaction organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) in the Capital today. If importers come up with genuine documents, it will reduce their hassles and save time too, he added.
On an average, around 25 per cent of the imported goods pass through the green channel. In the system, the customs clear the goods based on the declaration made by the importers and customs agents.
According to the department, some 44 per cent of the imported goods come through the green channel at Birgunj Customs, the country's key trade gateway from where 45 per cent of the country’s import is made. Likewise, out of 17,164 declarations during the mid-November to mid-December period, only 47 per cent of them were scrutinised strictly, the department revealed, claiming that the customs clearance process has been eased after it enforced the HS Code, EXIM Code and customs reference price.
"Some 85 per cent of the imported goods receive customs clearance in a single day," Raya said, adding that the department has planned to clear 75 per cent to 80 per cent of the imported goods through green and yellow channel by next year to make the clearance process faster, and easier.
Though he claimed that the enforcement of the customs reference price has helped rein in cases of under invoicing, the mechanism has failed to provide a respite for consumers as the importers are still charging exorbitant prices for their products, mainly due to absence of government mechanism to look after the anomalies.
Traders – speaking at the interaction – however, complained about the department charging high fees for EXIM Code and imposing the same rate of customs duty on import of raw materials as well as the finished goods. "The same rate of customs duty on import of raw materials as well as the finished goods have made the country more import-based economy rather than helping the economy industrialisation," they said, adding that the government policy is making the country more import-led economy.
"In addition, absence of experts at the customs point has led to delays in clearance of raw materials that could be damaged if they are not stored properly,” the business people said.