Nepal-India agree to revise Railways Service Agreement

 Nepal and India today agreed to revise Railways Service Agreement (RSA) that has been under discussion since long.

During the meeting of the Inter-Governmental Committee (IGC) on Trade, Transit and Cooperation to Control Unauthorised Trade – co-chaired by the commerce secretaries of both the countries held through video conferencing today – they discussed on amendments to the Rail Services Agreements (RSA), according to Ministry of Industry, Commerce and Supplies.

Nepal’s proposal for amendments and endorsement was taken positively by the Indian side, and will soon be finalised, the ministry confirmed. Signed in 2004, the RSA was revised in 2014, and renewed last year. The revision in RSA is expected to help simplify movement of railway cargo for trade with India and third countries.

They, on the occasion, also discussed on comprehensive reviews of the Treaty of Transit and the Treaty of Trade, measures taken for investment promotion, constitution of Joint Business Forum, harmonisation of standards as well as synchronised development of trade infrastructure on the two sides, a press note issued by the Indian Embassy in Kathmandu reads, adding that the two sides also discussed in detail various government-level initiatives that need to be taken in future for further enhancing trade and commercial linkages.

Indian commerce secretary Anup Wadhawan was accompanied by the Indian ambassador to Nepal Vinay Mohan Kwatra and a 15 member delegation drawn from various ministries and the Indian Embassy in Kathmandu, while his counterpart commerce and supplies secretary Dr Baikuntha Aryal was assisted by representatives of various ministries and departments.

The IGC is the apex bilateral mechanism for promotion of trade and investments between the two countries. “The meeting reviewed progress made on several notable agenda items in the sphere of trade and commerce,” the press note reads, adding that the Inter-Governmental Sub-Committee (IGSC) at the level of joint secretaries met on December 3-4 in the preparation for IGC meeting.

They also discussed on the bilateral dialogue were up-gradation of border customs, the establishment of Nepal-India joint commercial forum, Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement (MVA) issues, quality and standards of trade goods of both the countries and problems facing trade affairs. Likewise, the both sides have acknowledged the role of infrastructure along the cross-country border in trade promotion.

India is the largest trade and investment partner of Nepal both in terms of Nepali imports and Nepali exports. In fact, India is the only trading partner of Nepal with whom Nepali exports have consistently increased in the last two to three years. The wide-ranging discussions today and the progress made in the meeting are expected to further support the expansion in economic and commercial ties between India and Nepal.

Concor to lose monopoly on India-Nepal cargo movement

Container Corporation of India (Concor) is going to lose its monopoly of being the only player to move container trains between India and Nepal after the revision of India-Nepal Rail Service Agreement (RSA).
The recent revision of RSA has allowed the private players to move the containers between India and Nepal that has been monopoly of Concor since last fifteen years.
Kathmandu-New Delhi agreed to allow private container train operators – to carry goods including food, clothes, building material, cement, furniture, wood, crockery and cutlery to Nepal – after the revision of the RSA on June 5 and 6 talks in New Delhi.
In 2004, when the RSA was finalised, Concor was the only container train operator but in 2006-07, Indian Railways opened up the market, allowing other operators to run container trains, and giving Nepal also the option. Many a companies – including those backed by Adani Group, Port of Singapore Authority and Dubai Port World – have shown interest on ferrying to and fro Nepal.
Nepal traders and India’s Association of Container Train Operators (ACTO) both had long sought the opening up of the route for all operators but the RSA revision has been a long due.
The entry of new players will not only introduce competition for Concor but also force it to lower freight charges, making the imports cheaper to Nepal, the traders said, adding that Indian Railways has but earlier resisted moves to open up the route to private Indian container train operators.
The monthly traffic between India and Nepal comprises 13 to 14 container trains each way.

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.

Nepal-India agree to consider waterways as ‘trade route'

Nepal and India today agreed to declare inland waterways as one of the ‘trade routes’ in Nepal-India Trade Treaty revision.
The bilateral trade treaty review meeting between the joint commerce secretaries of Nepal and India – that concluded in Pokhara today – has agreed to identify inland waterways as trade route in the trade treaty revision, joint secretary at the Ministry of Industry, Commerce and Supplies Ravi Shankar Saiju confirmed. Saiju led the Nepali team in the discussion with his Indian counterparts. "Apart from the new addition of waterways, the two sides also discussed about enhancing cross-border air and railway connectivity."
The Indian authorities have also been positive towards the re-export of goods from Nepal to India and vice-versa, he said, adding that they have expressed the commitment to raise this issue with the Indian government and introduce re-export provision. "If this provision is introduced, Nepal can import goods from third countries via agencies of different multinational companies located in India." Importing goods from Indian agencies of global brands will help reduce the transportation cost for Nepali importers, he added.
Likewise, the trade treaty review meeting has also concluded that India will address Nepal’s agenda to drop the zero-tariff facility on Indian agricultural goods and some other primary products. "Indian authorities have sought details from Nepal on the call to levy customs tariff on such products," Saiju added.
The Nepali side has tabled the agenda of dropping the zero-tariff facility on Indian agricultural goods and some other primary products due to increasing import of Indian goods – especially agricultural products that are enjoying zero-tariff facility – widening the trade deficit with India, and also affecting the market for Nepali goods. But the Nepal government opins that the Indian authority should give continuity to the zero-tariff export facility for previously listed Nepali products in Indian market.
Ending the zero-tariff facility for Indian agricultural goods and some other primary products is expected to help reduce the widening trade deficit between the two neighbours.
Nepal and India had agreed to review the trade treaty along with the transit treaty and Railway Service Agreement (RSA) between the two countries last April. The two countries revised the trade treaty last time in October 2016 without any changes to the 2009 treaty.
Likewise, during the meeting Nepal has also proposed India to allow two additional seaports to trade with third countries. "Nepal has proposed the India to allow Mundra port (Gujarat) and Dhamra port (Odisha) for third country trade," Saiju said, adding that the Indian side has responded positively on Nepal's request.
Nepal currently uses two seaports – Visakhapatnam Port (Andrapradesh) and Haldia Port (Kolkata) – to trade with third countries.
Kathmandu will soon propose the draft of the revised trade treaty to New Delhi. "The next meeting will discuss about revising the trade treaty as Nepal will present India about what provisions precisely Nepal wants to amend in the existing trade treaty," he added.