Indo-Bangla shipping trials
expected to take off this month
INDIA and Bangladesh are likely
to begin trial runs for coastal shipping in May, according to sources.
The move comes as part of the
proposed agreement between the neighbours to open sea routes in order to promote
India exported goods valued at
over $4.7 billion to Bangladesh in 2011-12 against imports worth $498 million
during the period.
As compared to a varied Indian
export basket, Bangladeshi offerings are limited to agricultural commodities and
Currently, due to lack of direct
shipping arrangements, sea trade is routed through third country ports such as
Singapore or Colombo, the detour making it costlier. As a result, bulk of the
trade takes place via the land route.
As per estimates, direct coastal
shipping would reduce the freight cost to well below the cost of road
transportation through West Bengal.
The initiative will particularly
help Bangladesh's products to be more cost-competitive in the Indian market.
Both countries have already
identified a number of ports to operate coastal services. While Bangladeshi
services will be run from Chittagong, Mongla and Pangaon, Indian ports in the
link are expected to include Paradip, Visakhapatnam and Haldia.
It has also been decided to allow
plying of smaller vessels to make the service cost-effective. This would
particularly benefit the riverine port of Haldia in West Bengal, which suffers
due to its low draught.
According to a Union government
official, the two nations have held three rounds of meetings to finalise the
draft agreement. "It is not possible to run 'class' vessels (bigger ships)
due to cost concerns," he said, adding that the trial run is expected to
take place soon.
Further, the official said that
although tariff barriers to Bangladeshi imports had recently been reduced
substantially by both countries, the logjam at the Petrapole land Customs
station in West Bengal continues to be a major barrier to cross-border trade.
The Petrapole gateway currently handles more than half of the bilateral trade.
While the central government is
enhancing capacity at the Customs station, inadequate road connectivity is
proving to be a major hurdle in further expanding trade through this route.
Source : Exim
News Service - KOLKATA, May 2