Politicization of additional lock on containers delay operations of new transit routes
KATHMANDU, Aug 29: Nepal has failed to take benefit of trading via five new transit routes pledged by India as the government continued to linger on finalization of Letter of Exchange (LoE) needed to operationalize those routes for more than a year.
India in February 2011 had officially informed it was ready to open those routes - which include land routes between Vishakapatnam sea port and four major customs, rail route between Birgunj dry port and Vishakapatnam and also Rohanpur (India)-Singhabad (Bangladesh)-Jogbani (India) - as soon as the two side ink LoE.
“We had readied and even exchanged the LoE with the Indian counterpart almost a year ago,” said a highly placed official at Ministry of Commerce and Supplies (MoCS). However, the whole process of getting the LoE endorsed by the cabinet and inking the deal came to a grinding halt after Ministry of Foreign Affairs (MoFA) took over the issue.
The LoE has gathered dust since almost a year, said sources at the foreign ministry adding that the LoE has been lingered mainly because Foreign Ministry Narayan Kaji Shrestha is not positive towards agreeing additional one-time lock -- extra sealing by India officials on Nepal bound cargo containers - agreed by the MoCS and the private sector.
“Basically he fears his nod on the provision of additional lock could invite opposition from the political parties, portraying him as anti-national,” said a senior MoFA official.
Experts, meanwhile, said that the apathy of Shrestha had not only prevented Nepal from starting third country trade via more efficient Vishakapatnam sea port, but also dampened the prospect of trading with Bangladesh directly via the rail route.
“More seriously it will weaken Nepal´s bargaining power when the two sides sit for talks for renewing the bilateral Treaty of Transit, which was signed in 1999 and is set to expire January 5, 2013,” said Posh Raj Pandey, executive chairman of South Asia Watch on Trade, Economics and Environment (SAWTEE) - an independent think tank.
He along with the private sector leaders opined that Nepal should not delay in finalizing LoE, for the condition of additional one-time lock proposed by India, as it would facilitate the smooth movement of goods to Nepal via Indian territory, instead of hindering it.
“A study conducted by SAWTEE has shown that additional one-time lock that two side started on Kolkatta-Nepal route a year ago had smoothened the movement of overseas goods via India to Nepal,” said Pandey.
Business community too said there was no problem with the additional lock, only some of the leaders in the government were looking at it from political perspective.
India had long been putting pressure on Nepali officials to agree on the additional one-time lock before the renewal of the transit treaty between two countries, citing security concerns and cases of transshipment of goods destined to Nepal in India.
“They have even given indications they will introduce the additional lock on the new routes, irrespective of whether Nepal likes it or not,” said the MoCS official. “Besides, there is no point of opposing it when it has been easing our trade as well,” he added.
Since last year, India has been imposing the additional lock system on Kolkatta-Nepal routes which is sole cargo route being used by Nepal for overseas imports. China has also practicing additional one-time lock system on the container cargos destined to Kathmandu through Tatopani customs.