Importers turn to sea to escape vagaries of northern borderTraders don't mind the extra cost and time since there is no risk of their shipments being held up, they say.
Most importers of Chinese consumer goods have been bringing their shipments through India as Chinese authorities still have not reopened the northern border or resumed issuing visas, traders said.
"Because of the hassles created by repeated closures of check points on the northern border, almost 70 percent of traders have been using Indian sea ports as transit points, even though it is a long way round and means higher freight charges ," said Bharat Karki, senior secretary at the Nepal Trans Himalayan Border Commerce Association.
It normally takes two months for goods ordered from China to arrive in Nepal by sea freight, and two weeks by container truck overland across the northern border.
According to Karki, the cost increases significantly by around Rs1.2 million per container when importing goods by ship.
Traders are willing to spend the extra cost and time since there is no risk of their shipments being held up at the border for months on end, as has often happened at the northern border.
Naresh Katuwal, president of the Nepal National Traders' Federation, said most traders had not yet placed orders for new summer goods this year. “As China has not started issuing visas to traders, they have not been able to order goods from Chinese suppliers,” he said.
The summer shopping season has started, and traders are worried they might not have adequate inventory, he said.
According to Katuwal, they are planning to meet with Chinese Ambassador Hou Yanqi to discuss the problems Nepali traders have been facing for a long time.
China has been saying it will ease trade, but there has been no noticeable progress, he said.
Nepali traders even accused China of conducting an 'undeclared trade blockade' as their merchandise-laden container trucks have not been allowed to cross the border into Nepal for the past 17 months.
China permitted only a few trucks to enter Nepal for the last festive season, and importers were forced to re-route their goods through Kolkata port in India, adding tremendously to their transportation costs.
Traders said that most summer and winter goods like garments, cosmetics, footwear and consumer electronics, among others, are imported from China.
There are two key trade routes—Rasuwagadhi-Kerung and Tatopani-Zhangmu—between Nepal and China. The Rasuwagadhi-Kerung border crossing has remained closed since January 2020, initially due to snowfall blocking the roads in the bordering region and later due to the Covid-19 pandemic.
Karki said that the Rasuwagadhi-Kerung transit point re-opened on Tuesday, but container trucks still had not started leaving for Nepal. But five goods carriers have been departing from the Tatopani-Zhangmu transit point daily, he said.
Most of the goods stranded on the Chinese side of the border have been dispatched as a few goods carriers have been allowed to cross into Nepal, but it is taking time to clear the remaining consignments, Karki said.
Trader Dharma Poudel said that a lot of goods ordered in August last year were stuck in warehouses in Khasa, Nyalam Dhingri, Shigatse and other places north of Kerung in China.
Dhiraj Shrestha, president of the Ranjana Traders Association, said they had not ordered summer garments from China this year, and instead were sourcing their requirement from Nepali garment manufacturers.
Ram Prasad Regmi, Chief Customs Officer at the Rasuwa Customs Office, said that the border restrictions had not only caused losses to traders but the government too. The customs office has collected only 17 percent of the targeted revenue in the first seven months of the current fiscal year.
The office had set a target of collecting Rs11.33 billion in customs duty and fees in the current fiscal year, but it has been able to collect only Rs2.38 billion in the first seven months of the current fiscal year that started mid-July.
“Revenue collection has been hit due to the low volume of imports,” said Regmi.
According to the Trade and Export Promotion Centre, imports from China dropped 12.4 percent year-on-year to Rs116.12 billion in the first seven months of the current fiscal year.