5:13 pm - Friday April 18, 6836

Another Indian proposal to open direct sea routes

India has asked Bangladesh to open direct sea routes between the two countries to boost bilateral trade, which is being hampered by congestion at the land customs stations on both sides. India aims to increase cargo to Bangladesh.

According to sources, the Department of Commerce has asked Directorate General of Shipping to work out a mechanism on how the plan could work out. To initiate the process, ships have to be certified by both the sides so that they can operate in each other’s territorial waters, a senior commerce department official told Business Standard.

“We have asked DG Shipping to work out a protocol with Bangladesh on our regulatory requirements. We have to certify their ships and they will have to do the same. The dependency on Petrapole international check post (land route) is costing us huge,” said the official.

bd-indiaThere were several rounds of discussion on the issue and it was proposed both the sides would begin the initiative with smaller vessels rather than larger ones. This would prove to be more cost-effective for Bangladeshi traders than their Indian counterparts.

At present, goods that are shipped from the two countries via sea are sent through the ports of Singapore or Colombo , incurring a massive expense for traders. As a result, the Petrapole-Benapole land custom stations act as a natural choice for shipping the bulk cargo. Because of this, both the border posts face massive congestion. The logjam at the Petrapole and Benapole (Bangladesh side) has emerged to be one of the biggest trade barriers. The land customs station handles almost more than half of the entire bilateral trade.

“At present, there is not enough cargo between Chittagong (Bangladesh) and Kolkata so it is not profitable for the mainline vessel to carry it. The charges for Paradip port is very high so it is much better to run it through the Colombo port. Rather, the government should focus on improving the land customs station,” said Nisha Taneja, professor, ICRIER.

Since January this year, Petrapole and Benapole land customs stations have been made operational seven days a week. Both the custom stations suffer massive traffic congestion, poor road conditions and lack of authorised parking facilities.

The government has also taken measures to facilitate trade at Petrapole including extended working hours for the functioning of customs and aligning the weekly holiday with Bangladesh. The movement of trucks carrying export cargo is allowed up to the customs station of the importing country for discharge of cargo.

Exports from Bangladesh to India have risen significantly since 2010 when New Delhi took products from Dhaka off of its negative list. India imported goods worth $639.33 million in 2012-2013, compared to $254.66 million in 2009-2010. According to commerce and industry ministry data, total bilateral trade swelled to $5.78 billion in 2012-13 from $2.68 billion in 2009-2010.