Nepal-India to amend transit, trade treaties, RSA

Kathmandu , June 10th 2019

Nepal and India have agreed to amend the Trade Treaty, Transit Treaty and the Railway Services Agreement (RSA) on a reciprocal basis. A two-day meeting held on June 6 and 7 in New Delhi has paved the way for the amendment of the aforementioned treaties and agreement to address some of the issues raised by Nepal.

Nabaraj Dhakal, joint secretary at the Ministry of Industry, Commerce and Supplies, who was also the leader of the Nepali delegation, informed that the Indian government has agreed to allow Nepali rail and private Indian rail operators to transport Nepal-bound cargo from Visakhapatnam, Haldia and Kolkata ports to Nepal.

At present, the stateowned Container Corporation of India (CONCOR) enjoys a monopoly in transporting Nepal-bound cargo.

“We presented a strong argument on this issue and the Indian authority has agreed to our proposal,”

Dhakal added. “The new agreement will soon be implemented based on mutual benefit for both nations.”

“Since CONCOR enjoys a monopoly Nepali traders are having to pay more money to transport cargo to Nepal,” Dhakal said, adding that once the agreement is amended and implemented Nepali importers of third-country goods will save around Rs seven billion annually.

Moreover, the Indian authorities have also agreed to allow the transportation of bulk cargo to Biratnagar, Bhairahawa, Nepalgunj, Janakpur and Dhangadhi.

Previously, bulk cargo was allowed to be transported to Birgunj only. Likewise, Indian Railways has also pledged to provide necessary support in the construction and operation of the East-West electric railway and Kathmandu-Birgunj electric railway.

Moreover, the meeting also took a decision to allow Nepal to use other Indian sea ports closer to major customs points of western and far-western Nepal — Bhairahawa, Nepalgunj and Dhangadhi — for third-country trade. Ferrying Nepal-bound freight via inland waterways will also be included in transit treaty.

Similarly, amendment of RSA will pave the way for the operationalisation of private railways to ferry cargo from Indian ports to respective Nepali inland clearance depots.

Dhakal further said that both the countries will soon be forwarding letters of exchange to each other and the amended treaties and RSA will be implemented by the first week of December during a bilateral meeting to be held in Kathmandu.

Meanwhile, private Indian railway companies have already pledged to Nepali authorities to provide their service at around 25 to 30 per cent cheaper rate compared to CONCOR, if given the opportunity.

Moreover, the bilateral meeting also discussed on opening of other integrated check points in Biratnagar, Nepalgunj and Janakpur.

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