Nepal marks 25th anniversary of establishment of Kakadbhitta-Fulbari-Banglabandha trade route

Nepal has marked the 25th anniversary of the establishment of the Kakadbhitta-Fulbari-Banglabandha, the only route that allows Nepal’s third country trade with Bangladesh. The Banglabandha Land Customs Station (LCS) in Bangladesh is 54 kms south-east of Kakadbhitta LCS in Nepal.

Nepal and Bangladesh reached a historic agreement to open Kakadbhitta-Banglabandha route through Fulbari in India for trade. Geographically Bangladesh is smaller than Nepal. But, it has four times population Nepal has. Despite Bangladesh offering the good market for Nepali products, Nepal has failed to tap. During 25 years of trade with Bangladesh, Nepal has suffered a whopping Rs 45 billion worth of trade deficit, according to data. Central member of the Federation of Nepalese Chambers of Commerce and Industry, Narendra Khadka said he felt that Bangladesh was positive about trade facilitation with Nepal.

“There might a huge trade deficit Nepal endured during 25 years of trade with Bangladesh. We have many products that can easily get the market in Bangladesh. Nepal should identity these opportunities and bring concrete programmes to encourage exports,” said Khadka, also founding president of the Nepal Ginger Producers and Traders Association. Nepal’s products like gingers, black cardamoms and broom grasses have a good market in Bangladesh. Bangladeshi traders want Nepali products, but Nepal is failing to export goods, he said.

Both the countries have got trade experiences during 25 years of trade, said Panna Lal Jain, founding president of the Nepal Bangladesh Chamber of Traders. “It requires a review on things like what sorts of goods have been imported and exported, and about the market comments during this period. There is a need for both the government of Nepal and the private sector to additionally facilitate the Kakadbhitta-Fulbari-Banglabandha route for the trade benefits for both the countries,” said Jain, who has significantly contributed from the private sector to the promotion of the country’s trade with Bangladesh.

According to him, Nepali products like black cardamoms, gingers, oranges, medicinal herbs and tea have a good market in Bangladesh. River products could also be exported to the country, he added. Bangladesh has been importing river products from India and Bhutan. The Kakadbhitta-Fulbari-Banglabandha was officially inaugurated on 30 August, 1997 in the presence of then the ministers of foreign affairs of Nepal and Bangladesh. Then Nepal had expected flourishing trade with Bangladesh. But, the results were disappointing from the very beginning, as it suffered a trade loss.

In the fiscal year, 2054/55 BS, Nepal exported goods worth over Rs 1.1 million and imported more than Rs 13 million worth of products from Bangladesh. Until the FY, 2075/76 BS, Nepal exported 17 types of products including lentils, broom grasses, catechus, plywood, tomatoes, hajmola tablets, hair oil, oil cake, plastics, chiraito (medicinal herb) and glucose among others. Similarly, it imported 151 types of products including solar energy equipment, runner automobiles, papers, ready-made clothing, jute, corn, potato chips, chocolates, napkins, water bottles, batteries, medicines, chemicals, spare parts and coconut oil among others.

Over two decades into the trade agreement with Bangladesh, the number of items exported by Nepal has been decreasing over the years. According to data with the Mechi Customs Office, so far, Nepal exported products worth over Rs 36 billion to Bangladesh, and imported more than Rs 81 billion worth of goods. Over recent past years, trade deficit with Bangladesh had increased. Trade deficit stood at Rs 28 billion in the past five fiscal years, according to data. In the past remaining 20 years, trade deficit was only Rs 17 billion.

Lentils have dominated exporting items lately, said Purna Prasad Lamsal, the information officer for the Customs Office, Kakadbhitta. Raw materials, ready-made products, gingers and medicinal herbs have been mostly exported. Mostly imported items from Bangladesh are jute and products made from jute, oil cake, clothing, fruits juice, cosmetic products and chocolates, he said. The government of Nepal has set up the Nepal Transit and Warehousing Company Limited in Kakadbhitta for facilitating trade with Bangladesh.

The Company has deployed employees up to the Fulbari transit, 54 km away from Kakadbhitta to facilitate imports and exports of goods, said Roman Kumar Shrestha, the Company’s Kakadbhitta branch office. “When exports are made, our employees have reached up to Bangladesh along with the consignments. Similarly, they reach up to the Fulbari and Banglabandha transits to do the documentation to safely import products from Bangladesh,” he said. A well-equipped dry port has been established in Kakadbhitta in a bid to expand trade with Bangladesh.

The Trans Nepal Freight Services Private Limited is commissioned to look after the affairs of the port. In the first place, the Nepal Intermodal Transport Development Board under the Ministry of Industry, Commerce and Supplies looked after the dry port. Later, the Company was handed its managerial responsibility some years ago as per an agreement. In the past, cargo trucks in a large number from Bangladesh would ply the route, but the number has declined recently, said Rajesh Tiwari, the Company’s branch manager.

The Company has charged cargo trucks for parking on the premises of the dry port. The Company has got the port on rent for five years at over Rs 132 million. The Board has been assigned to take care of consignments, cargo vehicles and godowns on the premises of the Customs, said Ambika Subedi, the Board office chief, Kakadbhitta. Lately, both Bangladesh has shown its interest in purchasing electric power from Nepal. For this, the Nepal Electricity Authority and Bangladesh Power Development Board as per the understanding reached at the secretary-level Joint Steering Committee formed to cooperate energy trade between Nepal and Bangladesh decided to request India for a trilateral energy sales and purchase agreement through the Baharampur-Bheramara cross-border power transmission link.

The fifth meeting of the joint-secretary level Joint Working Group and secretary-level Joint Steering Committee meetings is scheduled for May 15-16 in Bangladesh. The meeting is expected to discuss the reaching of trilateral cooperation involving Nepal, Bangladesh and India for facilitating power trade between Nepal and Bangladesh. Electric power trade with Bangladesh is expected not only to balance trade, but add new dimension for Nepal in the international trade. For balancing trade with Bangladesh, Nepal should add exporting items, and demand with Bangladesh for customs exemption, said Jain.

“Our trade with Bangladesh will get a pace by getting customs exemption on agricultural and industrial products produced in Nepal.”


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