Fast gateways and the customs crunch: a case for integrated check postsThe launch of the Biratnagar-Jogbani integrated check post is commendable, but much more needs to be done.
Prime Minister KP Oli and his Indian counterpart Narendra Modi jointly inaugurated the Biratnagar-Jogbani integrated check post on Tuesday. The border crossing being the second busiest transit point for Nepal's trade, it will surely benefit from this facility. That the Customs Department had already started to use this facility in its unfinished form, as far back as October 2018, to ease congestion shows how important the investment in integrated infrastructure is for trade to flourish.
The government should be commended for finally completing this important milestone. Still, much more remains to be done to accelerate commerce and to mitigate congestion at border points. For one, India has already approved the building of at least two more integrated check posts along the border with Nepal. More such border points, spread out geographically, makes economic sense, as they help expedite customs processing.
The integrated check posts are much more than a regular customs point at the border. Such integrated facilities have immigration, customs and border security offices, quarantine facilities, and currency exchange counters, among others, in one place, thereby eliminating the need to run around in bureaucratic circles to facilitate human and cargo movement. There is no need to rush off samples of exports or imports to urban centres for routine or suspect tests as they can be conducted right at the facility. Similarly, having customs, security and immigration offices in one place (and right at the border) is expected to smooth all kinds of movement both ways. The facilities are so helpful, over 60 percent of all trade via Birgunj goes through the integrated check post there, as opposed to the traditional customs point that remains open.
In South Asia, the idea of integrated check posts first came from India, which began to construct them in 2012, starting with one with Pakistan. This isn’t surprising, as India is the largest trade partner for most countries in the region; such facilities are bound to provide easier access to Indian exports as much as it provides smaller countries easier access to Indian markets. Since 2012, India has constructed over six such posts on the border with four countries—Pakistan, Myanmar, Bangladesh and Nepal. The integrated check post on Nepal’s side at the Biratnagar-Jogbani transit point was constructed with a Rs2.8 billion grant from India.
Nepal can learn a lot from India’s push for integrated check posts. By investing in such facilities, the southern neighbour has guaranteed better links to connect their products from landlocked, inner states with markets in the four neighbouring countries. Nepal, being landlocked, can similarly benefit with better-integrated links all along its southern border. If more such posts are constructed across the southern belt, products developed and manufactured in faraway provinces need not be routed all the way to the eastern Tarai to link to markets in India.
But to take this forward to benefit Nepal, the country can also propose such integrated posts with China. The 2015 blockade showed how dangerous it was for Nepal to rely on one major market as well as one point of transit for all third-country trade. In the short term though, simply maximising the capacity of the two operational integrated check posts would go a long way in smoothening trade. The upgradation of road links, as well as the promotion of cargo rail, up to the integrated posts from both sides would further expedite customs processing.
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