More and more Nepali traders have started using the seaport in Visakhapatnam, India, for third country trade. In the last six months, the country’s only dry port in Sirsiya, Birgunj, received 19 railway rakes of goods from Visakhapatnam port. Each rake contains 90 containers of 20 feet long each.

The number of rakes dispatched through Visakhapatnam port is still small considering 16 rakes that Kolkata port sends to Nepal per month. But concerned stakeholders consider rise in movement of cargoes from Visakhapatnam port a good sign for Nepal’s third country trade, as it will exert pressure on Kolkata port to improve its services.

Indian authorities had opened Visakhapatnam port for Nepal after traders demanded an alternative port for the landlocked country to conduct third-country trade. The first commercial consignment sent by the port was received by Nepal in June. Currently, goods such as beans and stainless steel are being ferried to Nepal from Visakhapatnam port.

India had agreed in principle to allow Nepal to use the Vishakhapatnam Port in 2009. But a final agreement could not be signed at that time, as Nepal opposed to the double-lock system that India implemented on Nepal-bound cargoes.

Nepal finally got the permission to use this port for third-country trade during former Prime Minister KP Sharma Oli’s visit to New Delhi in February 2016. In the same year, Nepal and India exchanged letters to make use of the port. 

One of the attractions of this port, unlike the one in Kolkata, is that it is deepwater. This means the port can handle bigger cargo vessels, reducing ocean freight cost. 

Kolkata Port, on the other hand, cannot handle larger cargo vessels because of its shallow water. So, cargoes have to be transferred to smaller vessels in Singapore or Colombo, Sri Lanka, before they are shipped to Kolkata. This increases trading cost.

Yet the drawback of Visakhapatnam Port is the distance from Nepal, which stands at around 1,436 km. The port in Kolkata, on the other hand, is located at a distance of around 704 km from Nepal. It takes around two to three days for cargoes to arrive in Birgunj dry port from Kolkata, whereas one has to wait for four to five days to receive consignments dispatched through Visakhapatnam.

“Despite this, the congestion in Kolkata port leads to delay in delivery of cargoes. As a result we have to pay demurrage and detention charges, which increase freight cost. So, it is efficient to use Visakhapatnam port rather than Kolkata port,” Hari Gautam, a trader said.

Customs agent Shyambabu Patel said opening of Visakhapatnam port has provided relief to Nepali traders from chaos of Kolkata port and irrational behaviour of shipping companies and Indian customs agents.

However, Bishnu Kant Chaudhary, CEO of Himalayan Terminals, the operator of Birgunj dry port, said Kolkata port has improved its services since Nepal gained access to Visakhapatnam port.