Nepal to ferry cargo vessels on the Ganges

Nepal and India today finalised the operation modality for allowing Nepal to operate its cargo vessels on three inland waterways of India paving the way for Nepal to ferry its cargo vessels with its flag.
Concluding the two-day Nepal-India Transit Treaty Review meeting in Kathmandu today, India agreed to allow operation of Nepali vessels on the Ganges River that runs parallel of Nepal’s southern border, according to a press note issued by the Ministry of Industry, Commerce and Supplies.
According to spokesperson of the ministry Navaraj Dhakal, the two countries signed the standard of procedures during the joint secretary level bilateral meeting. “Once the provision come into effect, Nepal can ferry any suitable size cargo vessels along the prescribed water routes,” he said, adding that Nepal has been seeking to use three inland waterways on Ganges River that include the Kolkata-Kalughat-Raxaul, Kolkata-Sahebgunj-Biratnagar, and Kolkata-Varanasi-Raxaul routes. “India has developed a waterway on the Ganges River, connecting Varanasi and the seaport of Haldiya, Kolkata.”
By utilising these water routes Nepal can expand its transit options to the sea to carry out the third country trade,” said Dhakal, who led the Nepali team, whereas joint secretary of the Department of Commerce at the Indian Ministry of Commerce and Industry Bhupinder Singh Bhalla led the Indian delegation in the bilateral meeting.
“The Indian authority at the meeting expressed commitment to start groundwork to start trade via these waterway routes as soon as the two governments ink agreement on the new and modified Transit Treaty,” he said, adding that the Indian authority has said Delhi will allow Nepal to use ships of maximum capacity as per feasibility in the finalised waterway routes.
Nepal and India are revising the transit treaty – that was revisited by two countries earlier in 1999 – in almost two decades. “Only small amendments were made to some clauses of the treaty over the time,” the press note from the ministry reads, adding that the treaty will be automatically renewed from January 5, 2020 till 2027.
Likewise, the meeting has also finalised two new routes for bulk cargo transportation. According to the existing provision, bulk cargo is allowed to enter only from Raxaul (Birgunj) but the two sides have agreed to allow bulk cargo movement to Nepal also from Jogbani (Biratnagar) and Nautanwa (Bhairahawa), the press note reads. “The technical teams of two countries also signed agreement to allow Nepal to use railway-based transportation of bulk cargo from Kolkata and Vishakhapatnam seaports of India to Jogbani and Nautanwa near Nepal-India border.”
Along with the provision, the Indian side has also agreed to allow Nepal to carry out transshipment service via the electronic cargo tracking system (ECTS) in transit routes other than Vishakhapatnam-Birgunj. At present, only Nepal-bound cargo released from Vishakhapatnam port are permitted to use ECTS under the transshipment facility. “The provision is in pilot implementation for cargo brought via Kolkata port,” the press note reads.
The multimodal facilities are expected to help reduce transit costs and make Nepali products more competitive in the international market. However, the provisions will come into effect once the revised treaty is signed at the higher level.
Dhakal also informed that the two sides also discussed on Nepal’s proposal to use two Indian seaports – Dhamra in Odisha and Mundra in Gujarat – for third-country trade. “But India will first carry out detailed feasibility before deciding whether to let allow use to use these ports to Nepal.”

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.