Nepal will receive transshipment privileges and permission to use the electronic cargo tracking system on Nepal-bound cargo at Kolkata port from February 15. The facility is expected to reduce the cost of trading by minimising transportation time and speeding up clearance at the port.

Nepal has been receiving transshipment privileges at Vishakhapatnam port and using electronic tracking on cargo dispatched from there since August. Containers sent from Vishakhapatnam are transported directly to the Birgunj Inland Container Depot and cleared through customs.

Electronic tracking uses the Global Positioning System, a satellite-based radio navigation system, and allows the shipper to keep track of consignments.

Traders have to pay Rs4,200 extra per container to fit the electronic tracking device. But it helps to reduce the overall cost of trading since they can avoid paying demurrage and detention charges because cargo movement is faster.

According to the Ministry of Industry, Commerce and Supplies, the launch of the system at Kolkata port, the main gateway for the country’s third country trade, will reduce transportation time to four to five days.

Currently, imported goods unloaded at Kolkata take more than a month to arrive in Nepal.

The system is being enforced with the consent of the Indian government, said Rabi Shankar Sainju, joint secretary of the ministry. Electronic tracking was implemented as a pilot project at Kolkata port last April, but the scheme was discontinued a Indian shipping companies balked at using it, traders said.

Sainju said importers currently need to submit eight types of documents signed by 20 various authorities to get their goods cleared at the port. According to him, importers have to produce letters of credit and paperwork issued by the Department of Commerce and the Nepali Consulate General, among others, to get customs clearance at the Indian port.

“After the system is implemented, there will be no need for all the paper documents,” said Sainju, adding that it could help save Rs7-8 billion in demurrage that importers have been paying to shipping companies. Traders face hassles in the name of security checks at multiple check points in India under the prevailing system. The installation of electronic tracking devices will free importers from such problems, as per the ministry.

Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry, said traders had been spending up to Rs40,000 per container to receive clearance at the Indian port. “It will help reduce the cost of doing business,” Golchha said.

In June 2017, India and Nepal signed a memorandum of intent to pilot the tracking system to ease transit of cargo by road and rail from Kolkata to four major customs points in Nepal: Birgunj via Raxaul, Birgunj Inland Container Depot via Raxaul, Biratnagar via Jogbani, and Bhairahawa via Sunauli.