Indian decision to operate major ports 24/7 elates Nepali traders

India has decided to operate its customs at leading airports and sea ports, including Kolkata, round the clock throughout the week. The move is expected to speed up clearance of goods in transit to Nepal.
The decision, if truly implemented, is expected to speed up customs clearance, thereby lowering detention and demurrage charges for Nepali traders. Thus lowering of the transit cost can impact the final pricing as well, ultimately bringing some respite to general consumers who have been bearing the brunt of high transit and transportation costs.
“This is really a good decision for us,” said Rajan Sharma, president of Nepal Freight Forwarders´ Association (NEFFA). “It will ease our day-to-day business and made trading cost effective.” He also said decrease in detention and demurrage charges will benefit Nepali consumers.
The Prime Minister´s Office of India had decided to facilitate round the clock customs operation at major seaports and airports on Tuesday in a bid to remove the constraints for international trade. It has instructed the customs and other authority to implement the decision within 15 days.
“In order to remove this customs-related bottleneck, it has been agreed that customs clearances will now be available at seaports such as Kolkata, Chennai, Kandla and Mumbai and airports such as New Delhi, Bangalore, Chennai and Mumbai round the clock in order to facilitate trade services,” reads a press release that the Indian PMO issued on Tuesday.
So far, the cargos dispatched to and send out of Nepal were required to wait for days at Kolkata port and airports in India due to the lack of prompt and round the clock clearance facilities.
“Hopefully, the decision will significantly cut those detentions now,” Nikhir Jaisani, a Biratnagar-based trader told Republica over phone. “We hope our consignments, once this decision is implemented, will not be forced to be parked in the port by paying everyday demurrage and detention charges.”
Along with the customs, the Indian PMO has also asked other agencies such as port and airport authority, drug controller office, Food Safety and Standards Authority of India, quarantine and private players such as custodians to operate round the clock to facilitate international trade.
Once the new arrangement comes into force, the customs house agents, banks and transporters also will need to work round the clock to synchronize with the extended work hours.
As Nepal uses only Kolkata port to carry out its imports and exports, the goods that are imported won´t be piled up due to closure of customs clearance during the weekend. “We have to wait for two days to get the customs clearance if it comes on Friday,” Sharma said. “We won´t have to waste time and money after customs offices at ports started operating round the clock.”

WTO to review Nepal's progress on trade development

Enhanced Integrated Framework (EIF), an initiative of the World Trade Organization (WTO) working to enhance trade capacity of the least developed countries (LDCs), is soon reviewing the progress made by Nepal on exploiting trade potential since the program was implemented in the country in 2010.
Toya Narayan Gyawali, joint secretary at the Ministry of Commerce and Supplies (MoCS), said EIF board has initiated the process for hiring an independent team to review the progress that Nepal has made after institutionally starting the EIF program under MoCS.
“The review will measure the achievements Nepal made after implementation of the EIF program,” Gayawali told Republica. The review would also help policymakers compare the program´s output with other LDCs that have received similar support from WTO to improve trade.
Nepal has received two tiers of support from the EIF. Under which tier-1was implemented eyeing to upgrade the quality of human resources, prepare study reports on trade and development, formulate project supporting country´s supply capacity, whereas under tier-2 package, it has received support on developing trade related infrastructure.
“The EIF is reviewing Nepal´s progress as part of its country review decision. As per the decision, it would gauge output of its support to all the 40 countries that have implemented its program,” Gayawali said.
Under the tier-1 support, Nepal has developed Nepal Trade Integration Strategy (NTIS) 2010, identifying 19 products -- 12 goods and seven services -- in which the country enjoys special competitive edge to boost trade and ultimately achieve the goal of poverty reduction.
The registration of Chyangra Pashmina, a collective trademark of Nepali pashmina products, in more than 40 countries of Europe, America and Asia too was done with support from EIF.
Likewise, recently the government had also successfully received fresh support from EIF to enhance production and improve the value chain of ginger -- one of the niche exportable products included in NTIS. MoCS has also sought EIF assistance for the development of medicinal herbs processing industry in the country.
"The independent review will help us to plug the loopholes that are putting downward pressure on the country´s trade," said Gyawali.
Though traders and farmers are yet to witness tangible results of EIF initiative, officials believe Nepal´s status in the review will be better than other LDCs in terms of formulating policies and designing tools to boost export of the goods and services.

Bangladesh to provide zero-tariff facility to Nepali agri products

Bangladesh - one of the few countries with which Nepal enjoys trade surplus -- has agreed to provide zero-tariff facility to Nepali agriculture products such as lentils and tomato.
According to Commerce Secretary Lal Mani Joshi, Bangladesh unilaterally announced to provide zero-tariff facility to Nepali agricultural products at a bilateral meeting held on Sunday.
“High-level Bangladeshi officials agreed to provide zero-tariff facility on Sunday. However, formal agreement to this effect will be signed on Monday,” Joshi said.
Nepal had been requesting for such a facility for more than a decade. It had been failing to secure the facility mainly Bangladesh was expecting similar treatment for Nepal. But it hadn´t materialized as bilateral treaty between Nepal and India bars Nepal from providing equal or more favorable tariff treatment to any third country.
“Bangladesh has finally understood our position and agreed to grant zero-tariff facility unilaterally,” Joshi said, adding, “It is a great achievement as it might help us fined a new market for our agricultural products.”
The Nepal Trade Integration Strategy (NTIS) - a blueprint to boost export - has identified Bangladesh as third major destination for ginger.
The meeting, however, could not reach to an agreement on operation modality for transit route. “We are close to forging an agreement on the issue. But we won´t sign it now,” Joshi said, adding, “We will hand over the draft agreement to a technical committee. That committee will pave the way for us to sign the pact.”
Nepal and Bangladesh had okayed the draft of the operation mechanism of transit route during the commerce secretary-level talks held in Dhaka in 2010. Once signed, it will pave the way for Nepal to use Mongla and Chittagong ports for international trade. It will also resolve problems faced by traders on the overland transit route of Kakarvitta-Fulbari-Banglaband.
However, traders doubt smooth operation of this land route as India has not improved the roads conditions and eased movement of transit traffic along the Kakarvitta-Fulbari and Fulbari-Banglaband segments of the route.
Meanwhile, officials also held discussions on problems faced by traders from both the countries.
Nepal´s exports to Bangladesh presently stand around Rs 3.3 billion, whereas imports from Bangladesh stand at around a billion rupees.

Bangladesh hints at zero-tariff facility to Nepali products

Bangladesh has indicated it could provide duty-free market access to Nepali agricultural produces such as tomatoes and lentils when top trade officials of the two countries meet in Kathmandu next week.
“Bangladeshi officials have informed us that they are positive at providing zero-tariff facility to selected Nepali products, which have competitive edges in Bangladeshi market,” said a reliable source at Ministry of Commerce and Supply (MoCS).
He informed Republica that they were expecting a concrete announcement to this effect from Bangladesh when Commerce Secretary of the two countries will sit for talks starting from July 29.
Nepal had been requesting special treatment to its products, particularly agro produces, since almost a decade. But it has failed to secure the facility mainly as Bangladesh is also asking for the similar facility from Nepal.
Such demand from Bangladesh had forced officials to step back because existing bilateral treaty between Nepal and India restricts Nepal from providing equal or more favorable tariff treatment to any third country.
“Thankfully, Bangladesh has finally understood our constraint. We are optimistic the upcoming bilateral trade talks will finally bear fruit,” said the source.
Commerce Secretary Lal Mani Joshi, who is leading the talks, however, refused to talk on the message received by the ministry. He confirmed the date of the meeting though.
“We have not been able to penetrate the market despite the huge demand for lentils and tomato in Bangladesh,” he stated. During the talks, he said he would continue to his push for the duty-free facility to the Nepali products in order to expand the bilateral trade.
The commerce secretaries of the two countries, who are holding talks after a gap of two years, are also scheduled to discuss issues such as additional infrastructure development along the bordering areas, identify problems faced by their respective traders and work out ways to solve them.
They would also discuss over signing a mechanism for operating the transit routes between the two countries and work for sorting out quarantine related hassles. “We will also review the status of implementation of agreements that we had reached during the previous meetings,” said Joshi.
Nepal and Bangladesh had agreed on the draft of the operation mechanism of transit route during the commerce secretary-level talks in Dhaka in 2010. Once signed, it will pave the way for Nepal to use Mongla and Chittagong ports for international trade.
Likewise, it will also sort out problems faced by traders on the overland transit route of Kakarbhitta-Fulbari-Banglaband. Despite that, officials doubted smooth operation of this land route as India has not improved the roads conditions and ease movement of transit traffic along the Kakarvitta-Fulbari and Fulbari-Banglabanda segments of the route.
Nonetheless, if Bangladesh provided duty free facility for agro-produces, private sector believes Nepal´s export to this South Asian neighbor would rise significantly.
Records show, Nepal´s exports to Bangladesh presently stands at around Rs 3.3 billion, whereas its imports from Bangladesh stand at around a billion rupee.

SAARC commerce secys agree to expedite tariff liberalization

Commerce secretaries of SAARC countries have agreed to speed up the process of tariff liberalization and integration of the region through harmonization of communication, transport, capital market and movement of people.

The 15th meeting of Committee on Economic Cooperation (CEC) under South Asian Association for Regional Cooperation (SAARC) held in the Maldives this week also held discussion issues of least developed countries (LDCs) and non-LDCs. 

“The meeting was fruitful toward making the regional market more integrated,” Naindra Prasad Upadhaya, joint secretary at the Ministry of Commerce and Supply (MoCS), who was also present in the meeting, told Republica on Wednesday. “The officials from the region have agreed to harmonize customs operation that will lead to the smooth movement of goods and cargos in the region.”

Officials from the LDCs of the region including Nepal and Bangladesh urged officials of non-LDCs to remove items that are export interest of LDCs from their sensitive list, said Upadhyaya.

The meeting also reviewed the of status sensitive list and agreed to work together to shorten it in the near future. 

SAARC member countries have included products that they do not want to trade at zero tariff under South Asia Free Trade Agreement (SAFTA) pact in the sensitive list. The working group of SAFTA that met in Kathmandu last month to shorten the list had failed to make any headway after the countries remained divided over the modalities of shortening the list. 

The two-day meeting also touched on issues related to connectivity, communication and movement of people in the region.

Private sector to meet UP chief minister over herb export row

A delegation from Nepali private sector is meeting Akhilesh Yadav, chief minister of the Indian state of Uttar Pradesh in a bid to discuss issues related to trade and transit between the two countries including the trade of medicinal herbs that has come to grinding halt since the last three months from the Nepalgunj customs.

“The meeting will focus mainly on connectivity and quarantine,” Bhawani Rana, vice president of Federation of Nepali Chambers of Commerce and Industry (FNCCI) told Republica on Tuesday. “However, we will raise the acts of state-government of UP which has prevented export of herbs from Nepalgunj customs since three months against the spirit of bilateral trade treaty.” 

The medicinal herbs worth around Rs 350 million has been stuck in the Nepalgunj customs after UP introduced a new law contravening the bilateral trade treaty between the two countries. 

According to Rana, who will lead the team, the meeting is aimed at resolving the problems Nepali exporters face in different areas of border between Nepal and India. “We will also raise the issues created by different laws of state-government of UP,” Rana said. 

For instance, export of medicinal herbs is at a standstill following the UP government´s introduction of new law compelling exporters to get license from Department of Forest (DoF) of state government to export medicinal herbs. 

Such a provision was introduced against the spirit of bilateral trade treaty between Nepal and India that ensures free movement of all goods of Indian or Nepali origin in each other´s territory, without subjecting them to any quantitative restrictions, licensing or permit systems.

The export has not resumed even after the exporters knock the door of the India embassy in Kathmandu. Embassy officials had said that the export would resumed by Monday after the exporters appealed for facilitation last week. According to Thapa, 7,000 to 7,500 tons of medicinal herbs are exported from the Nepalgunj customs point to India.

China removes hurdles in citrus export

Nepal and China have signed a memorandum of understanding (MoU) in order to address the issues related to quality standard of Nepali agricultural products exported to China. The MoU was signed at the third meeting of the Nepal Tibet Trade Facilitation Committee (NTTFC), which concluded on Thursday in Tibet.

“We have signed an MoU with China so that our citrus products can have access to the Chinese market,” said Naindra Prasad Upadhaya, joint secretary at the Ministry of Commerce and Supplies (MoCS). “Quarantine related issues are the major obstacles to increasing our export to China. This is a step towards further improvement.” 

The meeting that basically discussed problems related to tariff and non-tariff barriers has been successful in terms of removing barriers, Upadhaya said, “China has assured us that it would further support Nepal to upgrade the quality and capacity of Nepali laboratories at different customs points.”

The meeting that was led by Mei Yubao, deputy secretary general of the government of Tibet Autonomous Region China from the Chinese side had complained about Nepal´s certificate of origin (CoO). “Chinese side was expressing concerns over the Nepali CoO. Basically, they were saying that the CoO issued were not technically sound.” In response, the Nepali side has assured that the weaknesses would be improved. 

Additionally, China has agreed to construct parking yard on the border points so that the problem of congestion can be removed. “The meeting has been successful in developing a mechanism in order to resolve the day-to-day problems that the traders from both the countries face,” Upadhaya said. “There will be focal persons from both the countries in the border area to facilitate traders.” 

China has provided the preferential treatment to 4,721 Nepali products. However, Nepal has failed to tap the potential market of China and boost trade. According to Trade and Export Promotion Center (TEPC), trade deficit with China shot up to Rs 38.2 billion during fiscal year 2009/10 from Rs 11 billion recorded in 2005/06.

Different studies on Nepal-China trade reveal that the China has been negating the preferential treatment it has provided to the Nepali products. “China brings up different issues such as quarantine and language,” said Dr Ratnakar Adhikari, presenting a paper in a seminar organized by Institute for Foreign Affairs, on Friday in Kathmandu .

Nepal-China talk to address problems faced by Nepali traders

China has approached the Nepali government to hold bilateral trade talks as soon as possible in order to ease the tariff and transit related barriers on quarantine and customs, among others, that Nepali businesspeople are facing for a long time.

“The Chinese team has come to have a preliminary meeting in order to fix the third meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC),” Naindra Prasad Upadhyay, joint secretary of the Ministry of Commerce and Supply (MoCS), told Republica on Sunday.

However, the two sides have not yet finalized the date for bilateral talk which will be held in China this time. The last meeting was held in Kathmandu in May 2011.

According to Upadhyay, the agendas for the meeting have not been finalized yet. “We will start working on agendas once we set the date for meeting,” he said. “There are chances that we would get invitation from China within this week with a date of the meeting.”

Nepal and China, in the second meeting of NTTFC, had agreed to ease the quarantine and transit issues.

However, Nepali traders have allegedly said that the government has failed to raise the issues that have reduced Nepal´s export to China. “Nothing substantial has been done to help improve Nepal´s export to China after the second meeting of NTTFC in 2011,” Rajesh Kaji Shrestha, president of Nepal-China Chamber of Commerce (NCCI) said. “There would be no progress this time as well. I am not hopeful.”

Upadhyay, who is also looking after the Nepal-China trade in the MoCS, said that he had discussed all the transit and quarantine related problems that Nepali business people are facing in the preliminary meeting last week. “I have raised the issues that are affecting our export growth to China,” Upadhya said.

A recent study on Nepal-China Trade conducted by a regional think-tank, South Asia Watch on Trade, Economics and Environment (SAWTEE), with the assistance of United State Agency for International Development (USAID), has said Nepal´s trade agreement with China has failed to uphold national interest. “The letter of exchange (LoE) signed between Nepal and China in May 2010 has turned out to be a barrier itself for the export growth of Nepal,” the report says.

Shrestha, complaining the government inefficiency to have a better negotiation, said that the Nepali business people were facing multiple problems in the border areas. “China definitely is a huge market but we can´t tap it until the transit and quarantine related issues are addressed,” he said.

According to Trade and Export Promotion Center (TEPC), trade deficit with China shot up to Rs 38.2 billion during fiscal year 2009/10 from Rs 11 billion recorded in 2005/06.

Nepal requests support for enhancing productivity, quality

Nepal on Thursday requested the trading and development partners to support it in setting up quality laboratories and testing facilities in order to help the country meet and certify that its products meet international standards.
Commerce Secretary Lal Mani Joshi made such a request while speaking at the concluding session of Nepal´s trade policy review (TPR) at the head office of World Trade Organization (WTO) in Geneva.
According to a press release issued by the office of permanent mission in Geneva, Joshi emphasized that Nepal has accorded high priority to improve trade facilitation measures and taken concrete steps toward reducing transaction costs by simplifying the trade and transit related procedures. The TPR meeting of Nepal had begun from Tuesday.
During the TPR, a number of delegations from USA, Japan, India and China among others had raised a number of questions related to Nepal´s compliance with WTO commitments, trade and investments. "Joshi responded to those questions and thanked the WTO members for their appreciation of Nepal´s efforts in liberalizing trade and investment," reads the release.
Joshi, who highlighted Nepal´s efforts at promoting investments such as formation of high-level Investment Board, also expressed commitment that Nepal would continue its efforts to promote international trade by reforming investment regime. "We are trying our best to attract investment in infrastructure, particularly hydro-electricity and transport connectivity, and in other priority sectors such as tourism and agriculture," the release quoted Joshi as saying.
He also requested all the trading and development partners to enhance and scale up their support to Nepal in terms of market access and enhancing productivity.
As the Chair of the TPR body, Ambassador Eduardo Munoz of Colombia stated that the first-ever TPR of Nepal has given a better understanding of development in Nepal, particularly its trade and related policies and practices. Nepal joined WTO in 2004.

Exports grow double-digit driven by garment, carpet rebound

Though labor unrest continues to trouble major industries, Nepali readymade garment and woolen carpet exporters managed to post more than 44 percent rise in exports. The healthy rise in garment and woolen carpet exports also made country´s total exports to grow by 11.2 percent over the first six months of the current fiscal year.
Nepal´s total exports over the first half of 2011/12 jumped to about Rs 36 billion, says a latest report of Nepal Rastra Bank. It was Rs 32.29 billion in the same period last year.  Although government officials tag readymade garment as a ´dying industry´, its exports to the third country markets soared by 44.5 percent and touched Rs 2.48 billion during the review period.
Exports of garment have increased to the European countries - mainly Spain, Germany, UK and France, according to Udaya Raj Pandey, president of Garment Association of Nepal (GAN). "We have got no new costumers, but our old clients are placing more demand," he told Republica.
As EU countries have provided zero tariff facility to Nepali products, exports of garment in the European market has increased in recent months. However, no such sign is visible in the US, which previously used to be the largest buyer of the product.
Despite such a healthy export growth, garment remained the country´s second largest export during the review period. Nepal´s largest export during the period was hand-knotted woolen carpet.
According to NRB statistics, exports of woolen carpet during the first six months of 2011/12 stood at Rs 3.36 billion, which was 44.2 percent higher as compared to export figures of same period of last year.
Pashmina - another prime export products - was the country´s third largest exports during the period. Nepal exported pashina products worth Rs 1.52 billion, a rise of 63.5 percent recorded in the same period last year.
Entrepreneurs like Kabindra Nath Thakur, president of Nepal Carpet Exporters Association, however, caution that present rise (in value terms) could be faulty because the central bank figure does not acknowledge some 8 percent rise in value of third country exports has come from depreciation of Nepali currency. "The actual growth in exports is lesser than what the NRB says," Thakur stated.
Irrespective of the situation, the rise in their exports income enabled the country to enjoy 6 percent rise in exports to overseas markets over the first six months. Exports to those markets had declined by a percent in the same period last year.
Likewise, rise in exports of products like zinc sheet (Rs 2.95 billion), textiles (Rs 2.37 billion), jute goods (Rs 2 billion) and polyester yarn (Rs 1.91 billion) helped the country expand its exports to India by almost 14 percent.
Despite encouraging export growth, NRB data shows the total export income for the period did not even suffice to finance import of petroleum products. According to NRB, Nepal imported petroleum products worth Rs 40.60 billion during the period. Gold (Rs 11.61 billion) was the country´s second largest import during the review period, flowed by vehicles and spare parts (Rs 9.45 billion), MS Billet (Rs 8.50 billion) and medicines (Rs 4.98 billion).
Thanks to their increased consumption - country´s imports increased by 16 percent and touched Rs 216.68 billion during the review period. Such higher rise in imports, meanwhile, widened the country´s trade deficit by about 18 percent to Rs 180.76 billion.

Nepal Narrows Its Trade-Deficit with India

Nepal’s trade deficit with India has narrowed down by 1.6 percent in the first three months of FY 2011/12 compared to last years same period. Only very few products’ export, i.e. the export of zink, sheets, textiles, copper wire rod and cardamom have gone up according to the Government of Nepal’s revelation of a report last week. 

One More time, lets talk about Vishakhapatnam Port

Nepal is one more time going to table the issue of Visakhapatnam port in the Inter-Governmental Committee (IGC) meeting with India . This issue has been discussed with India since more than a decade with India. The Indian Premier Dr. Manmohan Singh had agreed with his Nepali counterpart Dr. Baburam Bhattrai in latter's India visit last month. The IGC meeting is held in every six months between two countries' joint secretary level. This IGC meeting is going to be a small platform to see how much Indian side is positive to upgrade the Nepal's international and regional trade.