Direct Cargo Shipments ‘historic step’ for Indo-Bangladesh trade

Dhaka, Bangladesh: For the first time in their history as nations, neighbors Bangladesh and India last week launched direct cargo services that would enable goods shipped by sea to reach each other's ports in a maximum of four days, officials say.

Previously, goods sent from India took more than three weeks to reach Bangladesh's Chittagong or Mongla ports because shipments first had to pass through Colombo or Singapore, Bangladesh shipping minister Shajahan Khan said.

"I have inaugurated the service on Tuesday and the first Bangladesh cargo ship left Chittagong Thursday for Indian ports. This is a historic day for all of us," Khan told reporters.

"The businessmen used to take at least 25 days to carry goods to and from India and Bangladesh. Now, with the coastal shipping service in place, we can export to and import from India in only four days. This reduced time and cost would automatically boost trade between the two neighbors," Khan said.

Businessmen said the direct routes would also boost trade between India and Bangladesh and allow India to ship products to its seven northeastern states via Chittagong port.

"The coastal shipping is a very good move to increase trade in the sub-region comprising Bangladesh, landlocked northeastern states of India, Nepal and Bhutan," Q.K. Ahmad, the former president of the Bangladesh Economic Association, told BenarNews.

Bangladesh and India signed an agreement during Indian Prime Minister Narendra Modi's visit to Dhaka on June 6, 2015, followed by the signing of a protocol in November, which cleared the way for direct maritime cargo services.

The countries' bilateral annual trade volume is worth more than U.S. $6.6 billion, according to a commerce ministry figure.

Cargo ships from Bangladesh's Chittagong, Narayanganj, Ashuganj, Paira, Khulna, Mongla and Pangaon (near Dhaka) ports can carry goods to seven Indian eastern coastal ports in Kolkata, Haldia, Paradip, Vishakhapatnam, Kakinada, Krishnapatnam and Chennai and vice versa, according to the agreement papers.

On Thursday, Bangladeshi shipping company Neepa Paribahan dispatched its first cargo ship laden with cotton and textile items from Chittagong port to the Indian port of Krishnapatnam, company CEO Sirajur Rahman told reporters.

Before this week, a ship from India's Kolkata port could reach Chittagong ports in two days, but companies had to pay the rate based on a 25-day transit via Singapore or Colombo.

"And businessmen must charge for every second. The higher cost results in higher commodity prices to the consumers," Rahman said.

Khwaza Moinuddin, a columnist and former president of Economic Reporters' Forum in Bangladesh, explained that Bangladeshi and Indian businessmen used to ship cargo between the two countries, via Singapore and Colombo, for economic reasons.

"The volume of cargo generated in different Indian ports for Bangladesh was not adequate to load a big ship, as a majority of the export-import business was done through land ports. So all the small consignments of cargo were sent to Colombo or Singapore, where businessmen jointly hire big Bangladesh-bound ships," he told reporters.

Mainuddin said the introduction of the coastal shipping service would allow small ships to shuttle to all ports located along India's east coast and carry the goods to and from Bangladesh.

Easing overland bottlenecks

The text of the bilateral deal stipulated that the maritime shipping services between India and Bangladesh would enable the movement of cargo to the Northeastern states through Chittagong, and thereafter by road or river routes.

"The deep draft ports on the eastern coast of India can be 'hub ports' for the onward transportation of cargo to Bangladesh via the coastal mode. The Indian ports will attract enhanced cargo and also the overall transportation cost to Bangladesh will get reduced," the document said.

The rapid growth of India-Bangladesh trade has resulted in congestion at the main Petrople-Benapole land port. The traffic congestion on the Bangladesh side of the land port has emerged as one of the biggest impediments to export-import trade, it said.

(The article was originally published in benarnews.org)