India asks Bangladesh to open direct sea routes to boost trade

Land customs stations choked with cargoes; shipping through Singapore and Colombo costly

India has asked Bangladesh to open direct sea routes to boost bilateral trade, hampered by congestion at the land customs stations.

Sources said the department of commerce had asked the Directorate General (DG) of Shipping to work out a mechanism. “To initiate the process, ships have to be certified by both sides so these can operate in each other's waters,” an official said.

"We have asked the DG to work out a protocol with Bangladesh on our regulatory requirements. The dependency on Petrapole international check post (land route) is costing us a lot."

After several rounds of talks, it was proposed both would begin the initiative with smaller vessels. This would prove more cost-effective for Bangladeshi traders.

At present, goods shipped from the two are sent through the ports of Singapore or Colombo, very expensive. As a result, the cargoes turn to Petrapole-Benapole land customs stations. 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. These handle half the bilateral trade.

"There is not enough cargo moving between Chittagong (Bangladesh) and Kolkata, so it is not profitable for a big vessel to ply. The charges for Paradip port are 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, Petrapole and Benapole land customs stations have been made operational seven days a week. Both 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.

INDIA To BANGLA: LETS GO SURFING TOGETHER

* After several rounds of talks, it was proposed India and Bangladesh would begin the direct-sea-route initiative with smaller vessels

* This would prove more cost-effective for Bangladeshi traders

* Not enough shipments between Chittagong and Kolkata, so it is not profitable for a big vessel to ply