NURTURING CROSS BORDER TRADE

Anil Kumar Bamba

The land border trade with neighbouring countries has the potential to grow ten times to the present levels of trade with 20-25 Land Ports functional on different Land Borders. LPAI is targeting to multiply the trade with neighbours in the next five years and accordingly infrastructure is being improved, reveals Anil Kumar Bamba, Chairman, Land Port Authority of India

Q What important role does Land Port Authority of India (LPAI) play in the seamless movement of cargo across international borders?

The Land Ports Authority of India has been created to develop safe secure and seamless border crossings on all the land borders of India. LPAI has already completed the development of six land ports on different borders. The ICPs developed by LPAI are state of the art facilities with large parking spaces, warehouses for cargo handling, passenger terminals for immigration as well as public utilities and conveniences.

Q At present the trade on land borders is a small percentage of the total EXIM trade. What are the challenges to the Land Border trade with our neighboring countries?

At present the trade through the land border is less than 5 per cent of the total trade. This is abysmally low considering the historical trade routes within the Indian sub-continent. After the partition and creation of Bangladesh all the traditional trade routes got disconnected. LPAI has to play an important role in re-connecting these links by creating efficient, transparent and trader friendly border crossings. The cross border value chains of many commodities already exist recreating these value chains only requires creating good border NURTURING CROSS BORDER TRADE The land border trade with neighbouring countries has the potential to grow ten times to the present levels of trade with 20-25 Land Ports functional on different Land Borders. LPAI is targeting to multiply the trade with neighbours in the next five years and accordingly infrastructure is being improved, reveals Anil Kumar Bamba, Chairman, Land Port Authority of India infrastructure and an atmosphere of confidence among the traders on both sides of the border.

Q As the LPAI increases its footprint on the land borders how will it impact the logistics cost of the trade across the land borders?

The LPAI currently has six functional land ports on different borders. One more land port at Dawki, Meghalaya is under construction. These seven Land Ports will account for 65 per cent of the current level of the cross border trade. In the next phase LPAI is going to develop 13 more Land Ports together these will account for 95 per cent of the current level of trade. At the functional Land Ports the logistics cost to exports due to parking hassles, long queues and procedural delays apart from cost due to non-transparent procedures have been mitigated to a large extent. Traders now have a better idea of the actual time taken for crossing the border and consequent costs. This encourages exporter and importers to hunt for new value chains across the border within the constraint of the bilateral agreements. LPAI However is not content with capturing the current levels of trade. The land border trade with neighboring countries has the potential to grow ten times to the present levels of trade with 20-25 Land Ports functional on different Land Borders. LPAI is targeting to multiply the trade with our neighbours in the next five years.

Q One of the major challenges for logistics operators is the lack of infrastructure and capacities on the road/rail network for movement of goods from Sea Port/Land Ports to destination. What are the linkages being planned in the case of connectivity for the Land Ports?

Two of India’s neighbours Nepal and Bhutan are landlocked countries. Both of them are dependent on India and Bangladesh for their third country EXIM trade. India being the dominant economy of the region as well as being the country having a vast coast line has provided both Nepal and Bhutan with the access to sea ports. Both Nepal and Bhutan import third country products through Kolkata Port, Vizag Port, and other Ports in India, apart from Mongla/Chittagong Ports in Bangladesh. These Ports are already connected to Indian Railways and NH system. On the Nepal Border LPAI has two functional Ports at Raxaul and Jogbani. Opposite ICP Raxaul a rail fed ICD connected to Indian Railway System is already functional. LPAI proposes to set up rail siding based logistics hubs at both the Raxaul and Jogbani ICPs for facilitation of EXIM trade on India- Nepal border. All the ICPs of LPAI are also being connected to the NH system by 2 lane/4 lane road as per requirement.

Q The congestion on roads and time taken for Customs Clearances on both sides of the border at the border crossings increase the logistics cost and sometimes makes it unviable for exporters and importers to trade. How do you visualize that the situation can be eased out to reduce the logistics cost?

Customs clearance at LCS takes place mostly on the road at the border crossing. No parking, warehousing, security, weighbridges, CCTV are available there. Consequently the roads are jammed with cargo traffic as well as the local commuter traffic. Even private vehicles trying to cross over find it a difficult proposition. For the cargo vehicles delays upto several days just to reach the border crossing is routine. Due to these issues trade across the land route continues to remain at low levels. In ICPs sufficient parking space has been made available. Weighment, examination and loading-unloading (whenever required) are carried out in a CCTV controlled and sanitized environment where no theft or pilferage is possible. The ICPs are located away from the town at Greenfield sites and hence sufficient road space is available for cargo traffic to reach the ICP. At the locations where the ICP have come up traders have an idea of the cost of transhipment & parking etc which are displayed on our website as well. They can estimate the actual time the shipment will take to cross the border, thus helping them in formulating a fair estimate of the total logistics cost of the transaction. As more and more ICPs are developed on different borders EXIM traders will have the option to utilize these facilities and reduce their logistics costs.

Q The infrastructure at the land borders has traditionally been a low priority area. Basic requisites for trade and commerce like electricity, Internet Connectivity, road condition, mobile connectivity are lacking on the Nepal, Bangladesh, Bhutan and Myanmar borders. What is the role of LPAI in highlighting and developing these requisites?

The ICPs are being located at Greenfield sites which have almost no mobile, Internet power or road connectivity. Cross Border trade has not been able to prosper in India due to many reasons one of them being the poor infrastructure in the border areas. LPAI takes up these issues with the concerned departments in parallel with the planning and construction of ICPs. ICPs cannot succeed unless it has all the requisite connectivity infrastructure like road link to NH, replacement of weak bridges, construction of ROB, dedicated power line, dedicated Optic Fiber based internet connection, mobile towers etc. All these are not in the purview of LPAI, however LPAI ensures that all the necessary infrastructure is put in place by respective agencies.

Q At the land borders efficiencies can be brought in by effective coordination, and info exchange between the countries. What is the level of collaboration and cooperation between the Government Authorities at the Land Ports in India with their counterparts in Nepal and Bangladesh?

ICPs have been developed on India- Nepal, India-Bangladesh, India- Myanmar and India-Pakistan Border.

At present most of the interaction with Port officials of other country takes place through the offices of MEA representatives in that country. This however is a long process and not useful for resolving day to day Port to Port issues. LPAI has now formulated a mechanism with the support of MoC, MHA & MEA to hold monthly port level meeting on India-Bangladesh Border. First meetings were held in April 2019 both at Petrapole and Agartala. We propose to have similar port level coordination at other borders as well.

Q Are there any plans for developing common user facilities for cargo scanning and Customs operations that can make the movement of cargo across border quick and easy?

The ICPs bring all the requisite facilities for traders to carryout smooth and fast EXIM trade in a transparent manner. Custom clearance is carried out at much quicker pace since all facilities are available at one place. Cargo vehicles are parked in an organized manner. Therefore the cargo movement gets streamlined. Common user facilities protocol would take the efficiency to the next level. Mutual recognition of Plant & Animal Quarantine test reports, lab reports, sharing of scanner reports etc would be a step in this direction. Having test and checking procedures at the ICP which can be accessed by Customs/BGF/Port Officials of both sides would certainly reduce the process time further. This however depends a lot on the relations between the countries. It is possible to take up a test case to further develop the idea.

Q Multimodal transport connectivity to the hinterland and across the border has vast potential for trade facilitation. Does LPAI plan to integrate its facilities with both the road and rail networks?

Rail and road networks are in the purview of the respective ministries. However Trans-South Asian Trade across the land borders can only prosper if the border crossing points of all the participating countries are well connected to the hinterland as well as the cross border linkages. The important road networks like the Asian Trilateral highway, AH1 & AH2 routes have been highlighted at different forum like BIMSTEC, BBIN & SASEC platforms. Incidentally some of ICPs are located at the borders crossings where the railways have planned cross border connectivity projects. At Raxaul, Jogbani and Petrapole the rail line passes within the ICP complex. LPAI has already taken up with MoC and MoR to facilitate the integration of the rail project with the ICP complex. This will enable the traders to exercise multimodal options with this cargo. It will also enable all regulatory agencies to synergize their operations on both rail route and ICP.

Q Trade across the land borders takes place through Land Custom Stations. Six of these have been upgraded to ICP status by LPAI. How many more LCS will be upgraded and how does LPAI propose to roll out the upgradation of these LCS?

In the next phase 13 more locations have been identified on different borders. The focus being on faster integration with NE states as well as Nepal, Bhutan and Myanmar. The pace of their development will be dependent to a large extent on the land acquisition process in which the state government has to play a major role. LPAI plans to develop 20 ICPs in all in the next 4 years subject to expeditious land acquisition by state governments in the next one year. In addition to these 20 ICPs LPAI is also moving a proposal to upgrade more Land Customs Stations as mini ICPs based on trade volumes and passenger movement

Q How do you fore-see the future of land border trade with our neighbouring countries? The land borders trade today is less than 5 per cent of the total EXIM trade. The government is now focusing on development of border areas, better North-East Connectivity, Act East Policy, connectivity and sharing protocols with Bangladesh, Nepal and Bhutan. The trade across the land borders is going to be a focus area. The developments in border areas will also give a boost to good relations with our neighbors. Good infrastructure at border crossings is the first impression which our neighbours get about our country. It also reflects our desire to have warm and friendly relations with our neighbors by providing them excellent facilities when they enter India. LPAI has the agenda to provide safe, secure and systematic border crossings and aims to integrate its efforts with the broader vision of connectivity in the South Asian Region for promotion of trade, tourism and people to people contact.