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1 Trade Facilitation in Trade Facilitation in South Asia: A Study on South Asia: A Study on Needs Assessment Needs Assessment By By Pranav Kumar Pranav Kumar Chandan Mukherjee Chandan Mukherjee CUTS International CUTS International Jaipur Jaipur E-mail: [email protected] E-mail: [email protected]

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Page 1: 1 Trade Facilitation in South Asia: A Study on Needs Assessment By Pranav Kumar Chandan Mukherjee CUTS International Jaipur E-mail: pk@cuts.org

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Trade Facilitation in South Trade Facilitation in South Asia: A Study on Needs Asia: A Study on Needs

Assessment Assessment

ByBy

Pranav KumarPranav Kumar

Chandan MukherjeeChandan Mukherjee

CUTS InternationalCUTS International

JaipurJaipur

E-mail: [email protected]: [email protected]

Page 2: 1 Trade Facilitation in South Asia: A Study on Needs Assessment By Pranav Kumar Chandan Mukherjee CUTS International Jaipur E-mail: pk@cuts.org

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Trade Facilitation: A Trade Facilitation: A BackgroundBackground

• Trade facilitation: Identified as one of Trade facilitation: Identified as one of issues for multilateral agreement in 1996issues for multilateral agreement in 1996

• The Council for Goods in WTO was The Council for Goods in WTO was entrusted with the task of studying the entrusted with the task of studying the issueissue

• Serious differences persisted among WTO Serious differences persisted among WTO members over its inclusion in the members over its inclusion in the negotiating agendanegotiating agenda

• Finally, in July 2004, it became part of WTO Finally, in July 2004, it became part of WTO negotiating agenda with a limited mandate negotiating agenda with a limited mandate

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Trade Facilitation: A Trade Facilitation: A Complex AgendaComplex Agenda

• No multilaterally agreed definition of trade No multilaterally agreed definition of trade facilitationfacilitation

• Narrow or broad definitionNarrow or broad definition

• To deal with only border issues or behind the To deal with only border issues or behind the border issues including standards etc.border issues including standards etc.

• Cost implications are not too clearCost implications are not too clear

• Benefit aspects have been more highlightedBenefit aspects have been more highlighted

• Greater realisation on the part of developing Greater realisation on the part of developing countries of needs of trade facilitationcountries of needs of trade facilitation

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Trade Facilitation: Why It is Trade Facilitation: Why It is Necessary? Necessary?

• Growing competition putting pressure to cut Growing competition putting pressure to cut down transaction cost of tradedown transaction cost of trade

• The need is felt more by developing The need is felt more by developing countriescountries

• South Asian countries have opened their South Asian countries have opened their economies only in the last decadeeconomies only in the last decade

• Article 8 of SAFTA agreement makes Article 8 of SAFTA agreement makes provisions for addressing issues related to provisions for addressing issues related to trade facilitation measurestrade facilitation measures

• Landlocked countries like Nepal and Bhutan Landlocked countries like Nepal and Bhutan always have to face problem of transit etc.always have to face problem of transit etc.

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About the Study About the Study

• TF needs assessment in Eastern region of TF needs assessment in Eastern region of Indian sub-continentIndian sub-continent

• Aimed at identifying major impediments to Aimed at identifying major impediments to free movement of goods within the regionfree movement of goods within the region

• Involves field study in major transport Involves field study in major transport corridors in Bangladesh, Nepal, and West corridors in Bangladesh, Nepal, and West Bengal & N-E states of IndiaBengal & N-E states of India

• Following that a diagnostic survey was also Following that a diagnostic survey was also conducted conducted

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

• Port efficiency and InfrastructurePort efficiency and Infrastructure

• Transportation including roads and Transportation including roads and railwaysrailways

• Customs proceduresCustoms procedures

• Standards and technical regulationsStandards and technical regulations

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing Situation Situation

Port Efficiency and InfrastructurePort Efficiency and Infrastructure• South Asia has three types of maritime ports – South Asia has three types of maritime ports –

transshipment hubs, regional hubs ports and regional transshipment hubs, regional hubs ports and regional seaportsseaports

• The port of Sri Lanka is the only transshipment hub in The port of Sri Lanka is the only transshipment hub in South AsiaSouth Asia

• Nhava Sheva port, India’s largest port is considered Nhava Sheva port, India’s largest port is considered as regional hub portas regional hub port

• Ports of Kolkata and Haldia in West Bengal and Ports of Kolkata and Haldia in West Bengal and Chittagong are regional ports – provides feeder Chittagong are regional ports – provides feeder services to major portsservices to major ports

• Congestion at regional hub ports and regional ports Congestion at regional hub ports and regional ports causes delay in delivery causes delay in delivery

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

• An important example is the Nhava Sheva port in An important example is the Nhava Sheva port in 2004, where continued problem of congestion 2004, where continued problem of congestion lead to estimated loss of around Rs. 800 crore a lead to estimated loss of around Rs. 800 crore a month because of delayed shipmentsmonth because of delayed shipments

• Delays in regional seaport are longer. In contrast Delays in regional seaport are longer. In contrast to transshipment hubs and regional ports, to transshipment hubs and regional ports, regional seaports do not operate on the fixed day regional seaports do not operate on the fixed day of the week scheduleof the week schedule

• Excessive delays in moving cargoes Excessive delays in moving cargoes through the ports of Calcutta and through the ports of Calcutta and Chittagong have impacted negatively on Chittagong have impacted negatively on trade. trade.

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

TransportationTransportation

• Lack of proper cross border transit points and road Lack of proper cross border transit points and road connections across the region are major hindrances connections across the region are major hindrances to intra regional tradeto intra regional trade

• Lack of integrated transport networks in the region Lack of integrated transport networks in the region clearly raises cargo-shipping costclearly raises cargo-shipping cost

• Problem is more critical for the landlocked countries Problem is more critical for the landlocked countries like Nepal and Bhutanlike Nepal and Bhutan

• In addition labour problems cause delays in transit In addition labour problems cause delays in transit and congestion in land transport network. and congestion in land transport network.

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

• A number of road corridors in the region is not maintained A number of road corridors in the region is not maintained and are of limited capacityand are of limited capacity

• In India the percentage of paved roads at 56 percent is In India the percentage of paved roads at 56 percent is lower that than in countries of East Asia, which averages lower that than in countries of East Asia, which averages 88 percent88 percent

• The cost of road transport is also high. The average The cost of road transport is also high. The average transport costs on the Kolkata–Petrapole route between transport costs on the Kolkata–Petrapole route between Bangladesh and India is Rs 2543, 40% higher than other Bangladesh and India is Rs 2543, 40% higher than other highwayshighways

• It takes almost 15 days for a container from New Delhi to reach Dhaka, It takes almost 15 days for a container from New Delhi to reach Dhaka, because it comes by sea via Singapore, and the cost is as high as US $ because it comes by sea via Singapore, and the cost is as high as US $ 2,500. 2,500.

• This would otherwise cost only $500 and take just 5 to 6 days. There is This would otherwise cost only $500 and take just 5 to 6 days. There is no direct system of transportation between the two capitals. The distance no direct system of transportation between the two capitals. The distance between Dhaka and Delhi by water is 7,162 kilometers while it is only between Dhaka and Delhi by water is 7,162 kilometers while it is only 2300 kilometers by road, which could be covered within 2-3 days by 2300 kilometers by road, which could be covered within 2-3 days by road.road.

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

• There is also a train track between Raxaul in There is also a train track between Raxaul in India, Rohanpur in Nepal and Rajshahi in India, Rohanpur in Nepal and Rajshahi in Bangladesh. However, the operation of the Bangladesh. However, the operation of the route requires bilateral agreement among the route requires bilateral agreement among the three countriesthree countries

• There are train tracks from Bangladesh to There are train tracks from Bangladesh to Northeastern states of India, but the system is Northeastern states of India, but the system is not operative, as Bangladesh does not provide not operative, as Bangladesh does not provide the transit facility to Indiathe transit facility to India

• There have been a number of projects to There have been a number of projects to upgrade railway networks over the past upgrade railway networks over the past decade. However, problem is still persistingdecade. However, problem is still persisting

• The types of rail gauge also vary among The types of rail gauge also vary among countries and regions. countries and regions.

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

Border Crossing and CustomsBorder Crossing and Customs• Border crossings mostly includes inter related Border crossings mostly includes inter related

infrastructure and facilities such as customs clearance, infrastructure and facilities such as customs clearance, check posts, truck waiting areas, storage depots, rail check posts, truck waiting areas, storage depots, rail yards and loading and unloading areas at portsyards and loading and unloading areas at ports

• The border at Benapole is repeatedly one of the most The border at Benapole is repeatedly one of the most developed in the region with facilities for warehousing, developed in the region with facilities for warehousing, and other facilitiesand other facilities

• Problem arises when customs clearance centers are Problem arises when customs clearance centers are located far away from the border. Facilities such as located far away from the border. Facilities such as sanitary and phytosanitary testing laboratory in Kolkata is sanitary and phytosanitary testing laboratory in Kolkata is located 1000 kms from the customs facility at Birgunj, located 1000 kms from the customs facility at Birgunj, NepalNepal

• Exporters pay additional fees for vehicle detention Exporters pay additional fees for vehicle detention charges for weeks while waiting for test results. This charges for weeks while waiting for test results. This along with affecting the cost affects the quality of the along with affecting the cost affects the quality of the productproduct

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

• There are also delays in transaction in border There are also delays in transaction in border crossings. Some of these delays are associated with crossings. Some of these delays are associated with preparation of the customs documents and preparation of the customs documents and inspections due to the lack of standard documents. inspections due to the lack of standard documents.

• At the Indo-Bangladesh border a consignment needs At the Indo-Bangladesh border a consignment needs at least 22 documents, more than 55 signatures, at least 22 documents, more than 55 signatures, and a minimum 116 copies for the final approval and a minimum 116 copies for the final approval (RIS, 2004).(RIS, 2004).

• Each country requires different documents such as Each country requires different documents such as transit export and import declarations. Exporters transit export and import declarations. Exporters must prepare separate document at each side of must prepare separate document at each side of the borderthe border

• Further more the region uses different classification Further more the region uses different classification systems for commodities. This leads to general lack systems for commodities. This leads to general lack of transparency and problems in product of transparency and problems in product classifications in trade classifications in trade

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Trade Facilitation: Prevailing Trade Facilitation: Prevailing SituationSituation

• Countries in South Asia too some extent have moved over Countries in South Asia too some extent have moved over the past decades to improve customs. Example includes the past decades to improve customs. Example includes India has launched a modernization project in customs, India has launched a modernization project in customs, which include leveraging Electronic Data Interchange (EDI) which include leveraging Electronic Data Interchange (EDI) technology, which allows exchanging documents and forma technology, which allows exchanging documents and forma electronically to streamline clearanceelectronically to streamline clearance

• In Bangladesh the steps required for export /import In Bangladesh the steps required for export /import clearance of fibers, fabric and garments have been reduced clearance of fibers, fabric and garments have been reduced by 75 percentby 75 percent

• Nepal is currently undertaking reforms under a 3-year Nepal is currently undertaking reforms under a 3-year Customs Reforms and Modernization Action Plan. Reforms Customs Reforms and Modernization Action Plan. Reforms include upgrading physical facilities, administrative include upgrading physical facilities, administrative structures and automation of customs, and simplification structures and automation of customs, and simplification and harmonization of procedures. and harmonization of procedures.

• The reforms resulted in a revenue increase by Rs. 900 The reforms resulted in a revenue increase by Rs. 900 million in the first six months of 2004 from the same period million in the first six months of 2004 from the same period in the previous year. EDI systems are yet to be implemented in the previous year. EDI systems are yet to be implemented in Bhutan and Nepalin Bhutan and Nepal

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Major Transport Corridors: Major Transport Corridors: Chittagong-DhakaChittagong-Dhaka

• Chittagong-Dhaka provides potential sub-Chittagong-Dhaka provides potential sub-regional linkages to North-Eastern states of regional linkages to North-Eastern states of India and via Jamuna bridge to West Bengal as India and via Jamuna bridge to West Bengal as well as Bhutan and Nepal through Indiawell as Bhutan and Nepal through India

• Bangladesh because of its strategic location Bangladesh because of its strategic location can play a significant role in the sub-regional can play a significant role in the sub-regional transportation system by providing alternatives transportation system by providing alternatives in terms of direct and shorter transport links by in terms of direct and shorter transport links by rail, water and road. Chittagong port can be the rail, water and road. Chittagong port can be the gateway to promote trade in the region. gateway to promote trade in the region.

• Chittagong Port has the potential to become a Chittagong Port has the potential to become a high revenue generating port provided it is high revenue generating port provided it is properly upgradedproperly upgraded

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Major Transport Corridors: Major Transport Corridors: Chittagong-DhakaChittagong-Dhaka

Major Infrastructural BottlenecksMajor Infrastructural Bottlenecks• The rail line between Dhaka and Chittagong is primarily The rail line between Dhaka and Chittagong is primarily

single lane, meter gauge track. The container traffic on single lane, meter gauge track. The container traffic on this route has grown substantially to more than 400,000 this route has grown substantially to more than 400,000 tonnes over the last decadetonnes over the last decade

• Congestion is growing especially around Narayanganj Congestion is growing especially around Narayanganj and Dhaka with transit times of 6-7 hours implying an and Dhaka with transit times of 6-7 hours implying an average travel speed of 35-40 km/h.average travel speed of 35-40 km/h.

• Despite the congestion and because the railways Despite the congestion and because the railways capacity is limited, the road handles about 83% of the capacity is limited, the road handles about 83% of the containerized cargo moving between Dhaka and containerized cargo moving between Dhaka and Chittagong Chittagong

• This corridor has an air route with frequent daily flights This corridor has an air route with frequent daily flights between Dhaka and Chittagong and an inland water between Dhaka and Chittagong and an inland water route from Narayanganj down the Meghna and across route from Narayanganj down the Meghna and across the bay to Chittagong. the bay to Chittagong.

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Major Transport Corridors: Major Transport Corridors: Chittagong-DhakaChittagong-Dhaka

Chittagong Port FacilityChittagong Port Facility• Shortage of manpower (almost 2500 posts are vacant); lack Shortage of manpower (almost 2500 posts are vacant); lack

of training facilities to the workers; frequent strikes delay of training facilities to the workers; frequent strikes delay the work process at the port.the work process at the port.

• Lack of the requisite container services from the port. Lack of the requisite container services from the port. Railway service is very poor and container is not available Railway service is very poor and container is not available every time. The train handles only 10-11 percent of the total every time. The train handles only 10-11 percent of the total throughput of containers handled at the Chittagong port.throughput of containers handled at the Chittagong port.

• Lack of modernization has made railway traffic movement Lack of modernization has made railway traffic movement even slower. It takes 8 hours from Chittagong for a even slower. It takes 8 hours from Chittagong for a container to travel to Dhaka, while roadways transport container to travel to Dhaka, while roadways transport vehicle travel within 4.30 – 5.00 hours time. vehicle travel within 4.30 – 5.00 hours time.

• Lack of proper inland distribution system of the cargoes Lack of proper inland distribution system of the cargoes from the ports. There is one stop information facility at the from the ports. There is one stop information facility at the port but it is not functioning well to provide all the port but it is not functioning well to provide all the information to the exporters and importers. information to the exporters and importers.

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Major Transport Corridors: Major Transport Corridors: Chittagong-Chittagong-Dhaka

• The main mother shipping vessels do not come The main mother shipping vessels do not come to the Chittagong port. Goods are carried from to the Chittagong port. Goods are carried from the port in feeder vessels to either Singapore the port in feeder vessels to either Singapore (mostly) or Colombo to load into the mother (mostly) or Colombo to load into the mother vessels.vessels.

• The turn around time of container is also high The turn around time of container is also high and that’s why different shipping agents do not and that’s why different shipping agents do not agree to send containers to Bangladesh. agree to send containers to Bangladesh.

• Sometimes the feeder vessels do not reach the Sometimes the feeder vessels do not reach the Chittagong port directly due to congestion at the Chittagong port directly due to congestion at the port. The feeder vessels wait at the outer port. The feeder vessels wait at the outer anchorage maximum times for one or two days anchorage maximum times for one or two days before reaching the port (maximum waiting time before reaching the port (maximum waiting time is 72 hours). is 72 hours).

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Major Transport Corridors: Major Transport Corridors: Chittagong-DhakaChittagong-Dhaka

• Lack of computerization & automation in the port, so Lack of computerization & automation in the port, so manual process makes the work slow and cumbers manual process makes the work slow and cumbers some. some.

• Lack of computerization & automation makes the Lack of computerization & automation makes the process slow and cumbersome.process slow and cumbersome.

• In Singapore, a vessel is cleared of the goods in six In Singapore, a vessel is cleared of the goods in six hours, and the same takes about 72 hours in Chittagong hours, and the same takes about 72 hours in Chittagong due to lack of modern scientific instruments.due to lack of modern scientific instruments.

• Shipments from Kolkata to Chittagong come through the Shipments from Kolkata to Chittagong come through the Singapore port and it takes about 15 days and costs Singapore port and it takes about 15 days and costs about US$ 1800 for a container. The same shipment about US$ 1800 for a container. The same shipment through Panipath would take seven days and cost US$ through Panipath would take seven days and cost US$ 500 for the containers. 500 for the containers.

• So using the shortest route to import would bring down So using the shortest route to import would bring down the cost, however there is requirement of building the cost, however there is requirement of building proper infrastructure to support the same. proper infrastructure to support the same.

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Major Transport Corridors: Major Transport Corridors: Chittagong-DhakaChittagong-Dhaka

Problems with Customs ProcedureProblems with Customs Procedure• The customs procedure is complex. One stop service is not The customs procedure is complex. One stop service is not

yet available to that extent. The export and import yet available to that extent. The export and import documents need to be submitted at different points. Total documents need to be submitted at different points. Total signatures required to process the document is almost 30. signatures required to process the document is almost 30.

• Only the customs valuation, HS code verification and Only the customs valuation, HS code verification and invoice checking is carried out through the ASYCUDAinvoice checking is carried out through the ASYCUDA++++ module. All other customs process and procedure are module. All other customs process and procedure are performed manually. performed manually.

• An import customs clearance process takes almost 13-16 An import customs clearance process takes almost 13-16 steps. If it includes the process work of the Chittagong port steps. If it includes the process work of the Chittagong port authority, then it takes about 21-22 steps. Almost 48 authority, then it takes about 21-22 steps. Almost 48 stamps are put on the documents and average clearance stamps are put on the documents and average clearance time of the import is three to five days.time of the import is three to five days.

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Major Transport Corridors: West Major Transport Corridors: West Bengal-DhakaBengal-Dhaka

• The West Bengal-Dhaka corridor includes a road The West Bengal-Dhaka corridor includes a road route via Petrapole/Benapole and rail routes via route via Petrapole/Benapole and rail routes via Darsana, Rohanpur, Benapole, and to a lesser Darsana, Rohanpur, Benapole, and to a lesser extent Biral. extent Biral.

• The Benapole land port in Bangladesh is the The Benapole land port in Bangladesh is the most developed port among all the other land most developed port among all the other land ports in the country. ports in the country.

• Almost 80 percent of the goods from India are Almost 80 percent of the goods from India are exported to Bangladesh through this land port.exported to Bangladesh through this land port.

• This had been a major route for importing This had been a major route for importing Indian fabric yarn for the Bangladesh garment Indian fabric yarn for the Bangladesh garment industry. industry.

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Major Transport Corridors: West Major Transport Corridors: West Bengal-DhakaBengal-Dhaka

Customs ProcedureCustoms Procedure• The customs house at Benapole is equipped with the ASYCUDA++, The customs house at Benapole is equipped with the ASYCUDA++,

making the customs procedure fast and efficient. This is the only port making the customs procedure fast and efficient. This is the only port in the country where ASYCUDA ++system is fully implemented. in the country where ASYCUDA ++system is fully implemented.

• With the introduction of the computerized system the number of With the introduction of the computerized system the number of signatures required to process the documents has come down to signatures required to process the documents has come down to 17/18. 17/18.

• But there is no sample-testing centre near the port and the sample But there is no sample-testing centre near the port and the sample needs to be carried to the Bangladesh Standards and Testing needs to be carried to the Bangladesh Standards and Testing Institution (BSTI) in Dhaka.Institution (BSTI) in Dhaka.

• The customs final inspection procedure for the outgoing trucks from The customs final inspection procedure for the outgoing trucks from Benapole to the other cities in Dhaka is complicated. The trucks are Benapole to the other cities in Dhaka is complicated. The trucks are forced to stand near the check post for verification of documents from forced to stand near the check post for verification of documents from the truck drivers the truck drivers (there is no representative of the importing party, (there is no representative of the importing party, sometimes the C & F agents remain with the truck drivers),sometimes the C & F agents remain with the truck drivers), one after one after the other making the process delayed and unscientific, which results the other making the process delayed and unscientific, which results in creating unnecessary congestion in the place. in creating unnecessary congestion in the place.

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Major Transport Corridors: West Major Transport Corridors: West Bengal-DhakaBengal-Dhaka

Road InfrastructureRoad Infrastructure• Benapole, the border of Bangladesh is almost seven hours drive Benapole, the border of Bangladesh is almost seven hours drive

from Dhaka. The other side of the border is Petrapole in India. from Dhaka. The other side of the border is Petrapole in India. • The river bridges on the way are narrow, allowing only one The river bridges on the way are narrow, allowing only one

vehicle in a particular direction to move at a time. vehicle in a particular direction to move at a time. • The traffic enroute is very busy and hinders the steady The traffic enroute is very busy and hinders the steady

movement of the goods. Even though there is railway line from movement of the goods. Even though there is railway line from Benapole to Jessore but the railway facility is almost non-Benapole to Jessore but the railway facility is almost non-existence due to lack of investment.existence due to lack of investment.

• All vehicles in Dhaka-Benapole route have to cross the All vehicles in Dhaka-Benapole route have to cross the conglomeration of the Padma and Jamuna rivers. There is no conglomeration of the Padma and Jamuna rivers. There is no bridge on the river yet so the vehicles cross the river through bridge on the river yet so the vehicles cross the river through steamers. steamers.

• Number of steamers is limited and only a small channel of the Number of steamers is limited and only a small channel of the river is fit for navigation, the remaining major portion is covered river is fit for navigation, the remaining major portion is covered with silt. There is limited initiative from the government to clear with silt. There is limited initiative from the government to clear the silt due to shortage of resource.the silt due to shortage of resource.

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Major Transport Corridors: West Major Transport Corridors: West Bengal-DhakaBengal-Dhaka

Land Port Facility – BenapoleLand Port Facility – Benapole• This land port is the only developed one among the This land port is the only developed one among the

various land ports in Bangladesh, and is the only port various land ports in Bangladesh, and is the only port operated by government. operated by government.

• There are government warehouse facilities near the port There are government warehouse facilities near the port where the goods from the Indian trucks get unloaded where the goods from the Indian trucks get unloaded before they get reloaded into Bangladeshi trucks.before they get reloaded into Bangladeshi trucks.

• However, the number of warehouses required in However, the number of warehouses required in commensurate with the increase in the volume of the commensurate with the increase in the volume of the import by the country is much more. import by the country is much more.

• The Benapole truck terminal for the Indian trucks has a The Benapole truck terminal for the Indian trucks has a capacity of 600 trucks, which is in excess of capacity.capacity of 600 trucks, which is in excess of capacity.

• It takes on an average of two days to unload from It takes on an average of two days to unload from Indian truck and reload in a Bangladeshi truck in the Indian truck and reload in a Bangladeshi truck in the warehouse. warehouse.

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Bangladesh-N-E India CorridorBangladesh-N-E India Corridor

• Huge prospects and potentials for promoting trade and Huge prospects and potentials for promoting trade and investment between Bangladesh and seven Northeast States investment between Bangladesh and seven Northeast States of India.  of India.  

• Despite rich in natural resources, this landlocked region is Despite rich in natural resources, this landlocked region is distantly connected with the rest of India only through a distantly connected with the rest of India only through a narrow Siliguri corridor of 22 km stretch.narrow Siliguri corridor of 22 km stretch.

• The seven state capitals are at a distance varying from 1080 The seven state capitals are at a distance varying from 1080 km to 1680 km from their nearest mainland port city of km to 1680 km from their nearest mainland port city of Kolkata. Kolkata.

• On the contrary the distance of those cities from Dhaka and On the contrary the distance of those cities from Dhaka and Chittagong is much shorter than that of Kolkata Chittagong is much shorter than that of Kolkata

• Moreover due to undulating topography and innate Moreover due to undulating topography and innate difficulties, this region is underdeveloped with poor difficulties, this region is underdeveloped with poor infrastructure, transportation system and other logistic infrastructure, transportation system and other logistic facilities. facilities.

• As a result, transportation cost of goods to and from this As a result, transportation cost of goods to and from this region to rest of India and within the region is exorbitantly region to rest of India and within the region is exorbitantly higher than that of any strategic parts of Bangladesh. higher than that of any strategic parts of Bangladesh.

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Table: Distance of NEI State Capitals from Kolkata and Important Cities of Bangladesh

  Distance from Cities in Km.

Capital Cities of NEI

Kolkata (India) Dhaka (Bangladesh)

Chittagong (Seaport, B’desh)

Sylhet (An imp. divisional city of B’desh )

Agartala (Tripura)

1680 186 248 238

Aizwal (Mizoram)

1550 555 655 255

Guwahati (Assam)

1080 580 675 236

Imphal (Manipur)

1565 635 735 335

Shillong (Meghalaya)

1180 480 575 136

Kohima (Nagaland)

1420 780 880 480

Source: The Chittagong Chamber of Commerce and Industry

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Bangladesh-Nepal CorridorBangladesh-Nepal Corridor• The phulbari Banglabandha transit route could not be The phulbari Banglabandha transit route could not be

properly operationalised, as the 45 km road that passes properly operationalised, as the 45 km road that passes through India does not have the adequate infrastructure through India does not have the adequate infrastructure for easy movement of cargoes. for easy movement of cargoes.

• There is no proper customs facilities or testing laboratories There is no proper customs facilities or testing laboratories in this region. The transit facility is virtually non-existence. in this region. The transit facility is virtually non-existence. The transit agreement is signed by India with Nepal only The transit agreement is signed by India with Nepal only and not with Bangladesh. and not with Bangladesh.

• Though Bangladesh government has already set up an Though Bangladesh government has already set up an immigration office in Banglabandha but India is yet to do immigration office in Banglabandha but India is yet to do so. so.

• The borders are opened for 2 hours and the Indian border The borders are opened for 2 hours and the Indian border security force escorts the trucks from Kakarvita to security force escorts the trucks from Kakarvita to Banglabandha. The border officials are reluctant to do Banglabandha. The border officials are reluctant to do unless minimum 20 numbers of trucks are in queue.unless minimum 20 numbers of trucks are in queue.

• The Indian government has also not developed the 2-The Indian government has also not developed the 2-kilometer mud road between Nepal and Indian border. It kilometer mud road between Nepal and Indian border. It becomes difficult to run the unloaded vehicles on the two-becomes difficult to run the unloaded vehicles on the two-kilometer mud road.kilometer mud road.

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Indo-Nepal CorridorIndo-Nepal Corridor

• Customs Problems at Raxaul in IndiaCustoms Problems at Raxaul in India

• Port/Customs facility at Kolkata, IndiaPort/Customs facility at Kolkata, India

• Transport through rail/road to the port of Transport through rail/road to the port of KolkataKolkata

• Inland Container Depot facility in NepalInland Container Depot facility in Nepal

• Standards related problems Standards related problems