Additional container lock

It is unfortunate that India has unilaterally imposed an additional lock on containers ferrying Nepal’s third country imports even though the latter has repeatedly protested against this. The enforcement has straightaway landed two blows upon us. First, it has added to the procedural hassles, raising the cost of imports as the new process holds up goods in transit for a few more days at Kolkata port. This will add to demurrage and transportation cost, apart from affecting the overall production cycle and supply chain for Nepali exporters. Given that Nepali exporters are already facing difficulties in the international market, the Indian move is certain to cost them dear.



Secondly, imposition of the new rule through a unilateral decision contravenes the spirit of bilateral trade and transit accords. These treaties commit India to reducing paperwork and facilitating Nepal’s third country trade through a one-time lock system -- a long-practiced mechanism. If this is to be changed, it must be through mutual understanding. Neither party can change a bilateral treaty just like that.



India claims that its decision on an additional lock is meant to counter a rise in unauthorized trans-shipment of Nepal’s third country imports to the Indian market. Such cases have not been reported of late and Nepal has always expressed commitment to checking any trade deflection. After all, trans-shipment of third-country goods to India only eats away at Nepal’s own revenue and weakens its industrialization prospects. Hence, Nepal is no less concerned over the issue.



Will the additional lock help India address its concerns? Under the single-lock system also, Indian customs officials at Kolkata and Raxaul or anywhere else would invariably check the seals on containers. In case they are broken, they would inspect the consignments to make sure that goods have not been diverted into the Indian market. Apart from that, India was always opening the locked containers and inspecting the consignments whenever it suspected any grave seepage. So, how will addition of a second lock make any difference? If one lock cannot secure the containers, will another lock necessarily do the trick?



Clearly, there are only three ways of addressing these concerns: first the two governments must work together to address the issue promptly. After all, no private imports to Nepal can find their way into India unless there is a ready Indian buyer. Secondly, the two sides should also bring private sector bodies into the control mechanism. Thirdly, Nepal and India should foster an environment whereby Nepal’s third country imports move by rail to the Inland Container Depot in Birgunj. Hence, we urge India to withdraw its unilateral decision and act sensibly to work together for controlling any aberrations instead of inflicting additional costs on Nepal.

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