a year ago

India's transshipment facilities unlikely to benefit BD trade

NBR apprises commerce ministry

Picture used for representation - Collected
Picture used for representation - Collected

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Bangladesh will hardly derive any benefit from the transshipment facilities by exporting its products through Indian territories to third countries, according to an assessment by the National Board of Revenue (NBR).

India has widened the facilities by including riverine routes with the surface communication systems, but it is unlikely to bode well for the local exporters due to loading and unloading hassles as well as time-consuming processes, officials said here.

They said the transshipment facilities as announced would not be viable for Bangladesh as the Chattogram and Mongla seaports do have similar facilities for exporting Bangladeshi products to different countries.

The NBR put forward the views in response to a request by the commerce ministry of Bangladesh, which was scrutinising the pros and cons of the extended facilities India announced recently.

Earlier in 2018, India had given the transshipment facilities to carry containerised cargoes by roads and railways, and utilise their specified Land Customs Stations (LCSs), seaports and airports, to export goods to third countries.

When contacted, a senior official of the commerce ministry said the transshipment issue remained mostly out of focus, but got momentum after Prime Minister Sheikh Hasina's visit to India in early September last Prime Minister Sheikh Hasina's visit to India in early September last. "The authorities concerned are now working sincerely on it."

He explained that some strategic issues, including the country's security, are involved with such transshipment. Besides, these types of facilities offered by any country or economic block take time for detailed scrutiny to see if these would be beneficial options for the country.

According to a joint statement of Bangladesh and India issued after conclusion of the bilateral meeting during the PM's visit, the Indian side invited the Bangladesh business community to use its port infrastructure for transshipment of export cargoes to third countries.

The Indian Central Board of Indirect Taxes & Customs (CBIC) amended its earlier circular, issued in 2018, by including the extended facilities and issued a fresh circular regarding the amendment on September 14, 2022.

The NBR, however, viewed in favour of the transshipment facilities through the LCSs of Banglabandha, Chilahati, Burimari and Sonahat by truck, rail and covered van, and the LCSs of Chilmari river port and Dhubri-Nunkhawa by river routes.

The NBR also pointed out that there was no mention about the fees and charges for transshipment facilities in the Indian circular.

The bond submission provision is not logical in the context of international practice as the bond may be equal to applicable duty in accordance with the invoice of goods concerned.

According to the section 3.3 of the circular, "The authorized carrier shall also enter into a transshipment bond with the commissioner of customs (prev.), west Bengal in the form and manner prescribed by the said commissioner. The bond shall be of an amount equivalent to twice the value of goods to be transshipped."

"With a view to facilitating the and leveraging the potential of inland waterways for enhancing trade and transit, it has decided to allow the transshipment of containerized export goods of Bangladesh through India using riverine and rail routes," according to the section 3.1 of the circular.

The sub-section of the circular reads: "The first leg involves entry of containerized cargo into India through LCS Hemnagar, from where the goods shall be transported to the seaport of Kolkata or Haldia on a barge/vessel using the riverine route agreed under the protocol on Inland Water Transit and Trade between Indian and Bangladesh route."

According to the sub-section B: "The second leg involves unloading of containers from the barge/vessel and further loading on a railway train at the seaport of Kolkata or Haldia, from where goods will travel by rail to the seaport of Nihav Sheva or Mundra for exporting to the third countries."

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