Bulk cargo movement facility denied for all commodities
Indian government has shown reluctance to provide bulk cargo movement facility for Ms-Billet and chemical fertilisers. Sending comments on the proposed letter of exchange (LoE) titled ‘Process Simplification and Additional Route’, the Ministry of Commerce, India, has given consent only for coal and cement/clinker.
Nepal had proposed to the Indian government to provide bulk cargo movement facility for Ms-Billet, chemical fertilisers and cement/clinker to the rail heads of Nautanwa (Bhairahawa) and Jogbani (Biratnagar) from Kolkata some two years back seeking support from the southern neighbour for the industrialisation of the country.
This facility was sought to minimise the cost of transport logistics, so that industrial production in Nepal could be competitive. The high cost of production caused by various factors including high transport logistics has stalled industrialisation process in the country.
In the meantime, the government of India has opened Visakhapatnam Port as another gateway for Nepal’s third-country trade. In this context, the country has sought transit facility for bulk cargo movement from both Kolkata and Visakhapatnam Port, which will save time and logistic costs for traders importing commodities such as chemical fertilisers, cement, iron ore and coal.
The Indian government principally agreed to provide transit facility for bulk cargo movement but did not provide the facility for all the commodities proposed by Nepal.
As per officials at Ministry of Commerce, the government is again preparing to send the draft LoE with justifications.
Bulk cargo generally refers to goods ferried in open railway wagons. That is cost effective and also saves time than when cargoes are ferried in sealed containers. Currently, bulk cargoes are entering Nepal via Kolkata-Raxaul (Birgunj) route and unloaded at Inland Clearance Depot, Birgunj, before they are transported to other parts of the country, which has been increasing cost of transport within the country and congestion in the only rail-linked ICD.
As per Rajan Sharma, transit and transport committee chairman of Federation of Nepalese Chambers of Commerce and Industry, transit facility for bulk cargo movement will be instrumental in lowering logistic cost of ferrying various goods and also traffic on Kolkata-Birgunj route would come down, which will reduce travel time.
The country’s domestic distribution system could also be improved, and basically industries located in Bhairahawa and Biratnagar area will also benefit, as per Sharma. This is because goods, such as chemical fertilisers, cement, iron ore and coal, are currently being distributed throughout the country from Birgunj. Once the two new trading routes for bulk cargoes are opened, Biratnagar will start serving the demand of eastern Nepal, while Bhairahawa will emerge as the distribution hub for goods in the country’s western part.
Attempts made by The Himalayan Times to reach concerned officials of the Embassy of India in Kathmandu to verify the information were not fruitful. But traders have said that Indian government is reluctant to provide the facility for more commodities because when bulk cargoes are transported in open containers, it tends to pose security threat and also causes pollution.