India seeks transit facility through 15 routes in Bangladesh: report

Ray

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India seeks transit facility through 15 routes in Bangladesh: report

Posted: Mon Apr 18 2011, 11:55 hrs Dhaka:


India has sought transit facilities to third countries as well as its northeastern states through 15 road and railway routes and ports in Bangladesh, a media report said here today.

The Financial Express newspaper said India submitted a proposal to Dhaka seeking to use the road, railway and facilities of Bangladesh's Chittagong and Mongla ports to carryout its exports and imports with third countries and transport goods to and from its southeastern region......

"New Delhi has invited Bangladesh government to sign a protocol for a period of seven years for the purpose of transit, corridor and use of two ports"....

A foreign ministry spokesman here confirmed the report acknowledging the receipt of the proposal ......

The paper said the road and rail routes, sought by India in the proposed protocol were – Akhaura-Agartala, Sabroom-Ramgarh, Demagiri-Thegamukh, Bibir Bazar-Srimantpur, Belonia-Belonia, Betuli-Old Raghna Bazar, Chatlapur-Manu, Tamabil-Dawki, Borosora-Borosora, Haluaghat-Ghasuapara, Sonamganj-Shellbazar, Darshanak-Gede, Rohanpur-Singhabad, Birol-Radhikapur and Benapole-Petrapole.

The proposed protocol, it said, also expressed Indian willingness to import and export goods from and to third countries through southeastern Chittagong and southwestern Mongla ports, use warehouse facilities under exempted customs duties.

"Movement of cargo under the protocol shall be exempted from customs duties and other charges except reasonable charges for transportation and such other charges as are commensurate with the cost of services rendered in respect of such movement," the paper quoted the proposed protocol as saying. ....

According to the proposal, Bangladesh customs could not examine any Indian containerised cargo if it is sealed (one-time-lock) but in respect of non-containerised ones, the customs house may make a selective percentage examination of the goods to check if the goods were in accordance with customs declaration. .......

Commerce Minister Faruque Khan yesterday told PTI that Bangladesh would soon decide its final stance on fees for transit facilities to India as the issue continued to dominate the center stage of Dhaka-New Delhi relations and the country's domestic politics.......

commission suggested transit routes, charges, traffic volumes, investments and benefits and proposed equal transit fees for all countries which would range between USD 4 and 50 per tonne of goods as transit fees depending on routes chosen by the user.

"We have submitted the report online and recommended the imposition of charge in line with World Trade Organisation rules," Tariff Commission Chairman Mujibur Rahman told ......

....under the General Agreements on Tariffs and Trade (GATT) and Bangladesh¿s 1969 Customs Act the country cannot impose customs duties or tax on transit traffic.

"But there are no restrictions on imposing transit charge on the movement of transit traffic in order to recover various types of costs related to administrative expenses such as costs of customs formalities, customs inspection and charge for use of services," it said........

He, however, added, "expensive transit fees might not bring the desired benefits".

The debate on providing transit to India sparked a afresh two months ago when opposition Bangladesh Nationalist Party appeared to have revived an old an anti-transit campaign as Prime Minister Sheikh Hasina¿s government is set to allow Indian transports to carry goods to its isolated northeastern states through the country.

"No foreign vehicle would be allowed to go through the country at the cost of the country's interests," she told a party rally after finance minister AMA Muhith said Dhaka would charge India transit fees instead of duties in exchange of offering the transit facilities.

http://www.indianexpress.com/news/i...rough-15-routes-in-bangladesh-report/777642/3
This is the latest on the trade and transit with Bangladesh.

There is of course still a long way to go.

If the treaty is accepted, then it will help Bangladesh's trade with Nepal and Bhutan and will help India by having a shorter route to the NE.

It will go a long way in improving relationships as well as each other's economy.

However, the BNP may not be pleased!
 

GPM

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1. India is not land locked, so B'desh can turn down the request.

2. If it benefits BD in trade with Nepal and Bhutan, it is their outlook. For records sake, India did not accept Nepal request for transit through B'desh.

3. What if B'desh demands reciprocal transit routes to China and Burma? Will India accede, national interests be damned?

I BD accepts it will be a miracle.
 

Virendra

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Good movement. A web of roads between India, Bhutan and Bangladesh will help all, most of all the NE.
But I think there's going to be heavy bargaining from the other side as they know that they're helping us relieve pressure from the 10 km wide chicken's neck up north.


Regards,
Virendra
 

nitesh

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Correct me if I am wrong, but this does not include transit of military goods. Then not much of military value to this facility
 

ejazr

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GoI is working hard to develop the NE region and use that as a stepping stone to integrate Myanmar and Bangladesh into the Indian economy. Remember, as a major economy, it is in India's interest that all its neighbors have India as its largest trading partner to create an economic incentive to stick with India.

At present, we have the strange anomaly of China being the bigger trading partner of Bangladesh than India, even though we are right next door.

Also, this will help to transport non-lethal supplies for the military as well. A lot of goods can be of dual use. Food, cement, power plants, computers e.t.c. can all be used by the military as well.

Ammunition tanks e.t.c. might draw some arched eyebrows.

However, Bangladesh still has revoked a mutal defence treaty that India and Bangladesh signed in 1972. So the clause might be invoked as well.
http://news.google.com/newspapers?i...3625&dq=india+bangladesh+defence+treaty&hl=en
 

nitesh

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What exactly BD is charging for this facility?, This one is not clear enough

Commission suggested transit routes, charges, traffic volumes, investments and benefits and proposed equal transit fees for all countries which would range between USD 4 and 50 per tonne of goods as transit fees depending on routes chosen by the user.
 

Yusuf

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A step in the right direction for India to develop the north east and also better ties with BD. BNP has always been a party pooper as far as BDs relations with India go.

The charges look clear $4-50 per tonne of cargo depending on which route is taken. $4-10 would sound reasonable and anything more would be outright greedy. India could also offer to build the infrastructure along all these corridors. For India this could come in handy if there was a war with China and it chokes our chickens neck. We should have movement of military equipment too included in the treaty, may be at a later stage if not now.
 

Virendra

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We should assert on Bangladesh that they've owed us atleast that much, ever since 1971. We need to have military goods and infrastructure (to whatever extent possible) included in the transit scope. Only then we can realise the full security potential from creating such a web of connectivity infrastructure. Anything going towards NE should not be viewed decoupled from its security value.

Regards,
Virendra
 

nitesh

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Yusuf, I think anything above USD 4 is greedy, as they are not providing any cargo handling facility, just transit charge
 

Yusuf

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Nitesh if it is less than the current cost and also easier to transport using BD, a little extra money would not matter. $50/ton sounds ubsurd. I think the fee is inclusive of customs handling.

"We have submitted the report online and recommended the imposition of charge in line with World Trade Organisation rules," Tariff Commission Chairman Mujibur Rahman told ......




....under the General Agreements on Tariffs and Trade (GATT) and Bangladesh¿s 1969 Customs Act the country cannot impose customs duties or tax on transit traffic.

"But there are no restrictions on imposing transit charge on the movement of transit traffic in order to recover various types of costs related to administrative expenses such as costs of customs formalities, customs inspection and charge for use of services," it said........

He, however, added, "expensive transit fees might not bring the desired benefits"
They too realise that high transit charges would not generate good business.
 

nitesh

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Agree with you yusuf to certain extent, but I feel it is more of temporary facility asked, something like 10-15 years. till the time India improves own infrastructure, then these roads will be competing between themselves for transits :)
 

Yusuf

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Nitesh the terrain to connect to NE is such that it's better to have a deal with BD.
 

ejazr

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Well what are comparable transit rates in other countries? I think Panama canal and suez canal, which just uses water transit charge between $5-20 depending on type of cargo and the amount as well. While CAR countries change between $13-$22 for using roads/rails for transit for Afghanistan. While through Pakistan its between $4-10 per tonne. Air India actually subsidises the cost for Afghanistan by charging 20 cents per tonne for first 400 tonnes of fresh produce.

I guess the more traffic Bangladesh sees, the cheaper it will get due to economies of scale. Having a competing route will obviously be the best bet to increase competition. E.g. by India improving its infrastructure along the chicken neck.
 

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