Delhi opposes $7 transit fee per tonne of cargo [ Tritiyo Matra News ]

Delhi opposes $7 transit fee per tonne of cargo

Local September 06, 2015

India recently conveyed its reservations about the rate of transit and transshipment fees Bangladesh is contemplating to charge for its goods passing through it.
Officials said that India conveyed its reservations even before Bangladesh could finalize the rates of transit and transshipment fees.
Delhi expressed the reservations even as the proposal from the National Board of Revenue is under the Shipping Ministry’s consideration.
The NBR proposed to fix the fee at Tk 580, approximately equivalent to $7 per tonne of Indian goods passing through Bangladesh, said officials.
India also opposed another NBR proposal that would make it mandatory for it to provide bank guarantees for its goods passing through Bangladesh.
Shipping ministry officials said Delhi also requested Dhaka to look for an alternative to bank guarantee and review of the rate of transit and transshipment fee.
Shipping secretary Shafique Alam Mehedi said that a technical committee of the ministry was still working on the proposals from the NBR.
Nothing had been finalized yet, he said.
He said that the government was determined to strike a win-win deal with India on transit issue.
He said the ministry would seek the cabinet’s approval on the fees and the related issues.
In 2010, the NBR had proposed to charge Tk 10,000 per 20 feet container and Tk 1,000 per tonne of cargo on trucks.
The NBR withdrew a statutory regulatory order, better known as SRO, spelling out the rates of transshipment and transit following strong persuasion from India and opposition from the prime minister’s economic adviser Mashiur Rahman.
Delhi raised the demand for transit facilities afresh during prime minister Nerenda Modi’s visit to Dhaka in May.
India has been pressing Bangladesh for long to provide it transit and transshipment facilities for easier movement of goods between its northeastern provinces and its mainland.
Bangladesh provided transshipment facilities to India on several occasions on humanitarian grounds for the transportation of food-grains and large power plant equipment to north-eastern Indian provinces.
Delhi’s response was always cold whenever the question of payment of duties and fees for transit and transshipment were raised.
In recent days India changed its stance and agreed to pay the fees according to World Trade Organization rules, said finance minister AMA Muhith.
The WTO rules stipulate payment of transit fees on the basis of cost of infrastructure plus the charges fixed by the country providing the transit facilities.
Economist Debapriya Bhattacharya said that it would be difficult for Bangladesh to protect its interests by following the WTO provisions.
The Article V of the WTO did not provide an explicit definition of the term ‘freedom of transit’, he said.
A World Bank-United Nations report on Landlocked Developing Countries of November 2014 says that $2 to $3 is charged by East and Southern African as trucking fee per km.
It says that higher fees are charged by Western and Central African countries from neighbouring land locked Botswana, Burkina Faso, Burundi, Central African Republic, Chad, Ethiopia, Lesotho, Malawi, Mali, Niger, Rwanda, Swaziland, Uganda, Zambia, and Zimbabwe.
Transit of goods occurs between Turkey and Iran on the basis of a bilateral agreement signed in 1994.
Under the agreement, an Iranian truck passing from Turkey’s eastern customs gate to its western customs gate after crossing roughly 1,200 km paid $307 as the transit fee until last year.
Seven European Union countries, including Switzerland, levy ‘vignettes’, fees from users of roads for a particular period since 2013.
In April, England began to charge lorries of foreign countries up to $16 per day for using its roads.