India and Bangladesh sign Standard Operating Procedure (SOP) to operationalize agreement on coastal shipping.
India and Bangladesh signed the Standard Operating Procedure
(SOP) in New Delhi today, to operationalize the “Agreement on Coastal Shipping”
signed between the two countries in June, 2015. The SOP was signed by the Joint
DG (Shipping) Ministry of Shipping, Government of India and Chief Engineer and
Ship Surveyer, Department of Shipping, Government of Bangladesh in the presence
of Shri Nitin Gadkari, Minister of Shipping
and Road Transport and Highways. Speaking on the occasion Shri Gadkari said
that once it is operational, the Coastal Shipping Agreement will enable a huge
saving in logistic costs of EXIM transport between the two countries. The SOP
has been framed as per the terms and conditions of the Agreement on Coastal
Shipping and both India and Bangladesh have agreed to its provisions. Shri
Rajive Kumar, Secretary Shipping Government of India and Shri Shafique Alam Mehdi, Secretary Shipping Government
of Bangladesh were also present on the occasion.
The
Standard Operating Procedure will pave the way to promote coastal shipping
between India and Bangladesh and would enhance bilateral trade between the two
countries by bringing down the cost of transportation of EXIM cargo. The SOP
contains provisions which stipulate that India and Bangladesh shall render same
treatment to the other country's vessels as it would have done to its national
vessels used in international sea transportation. The two sides have also
agreed upon the use of vessels of River Sea Vessel (RSV) category for Indo-Bangladesh
coastal shipping.
The
two countries will also hold Shipping Secretary level talks on 16th
Nov, 2015 which will cover the issues relating to MoU on passenger and cruise
vessel movement, discussion on the protocol to operationalize the MoU on use of
Mongla and Chittagong ports, payment of transit fees and bank guarantee, dredging
of rivers in the protocol route using Regional IDA Assistance of World Bank
Assistance, discussion on various upcoming port projects in Bangladesh.
India and Bangladesh have a
Bilateral Protocol on Inland Water Transit and Trade (PIWTT) for operation of inland
vessels on the river protocol routes between river ports of Haldia, Kolkata,
Pandu, Karimganj and Silghat in India and Narayanganj, Khulna, Mongla,
Sirajganj and Ashuganj in Bangladesh. This protocol between the two countries
has facilitated the movement of EXIM trade as well as cargo bound for the North
Eastern states of India. Out of a total of 1.8 million tonnes of cargo moved on
Indo-Bangladesh protocol route during 2013-14, about 98% is fly ash which is
transported from Kolkata to various river ports in Bangladesh. During the
current financial year, India for the first time is using the Indo-Bangladesh
river protocol to transport food grains via Ashuganj to Tripura. However, the
quantum of cargo has not picked up because of low draft in the upper reaches of
Bangladesh rivers and also because of certain non-trade barriers.
Rapid
growth in bilateral trade between India and Bangladesh has led to congestion on
the road at Indo-Bangladesh border and at the Land Custom Stations/integrated
Check Posts. The traffic congestion at “Petrapole” and “Benapole” on the
Bangladesh side has emerged as one of the biggest impediments to the movement
of EXIM cargo. Due to such congestion, the exporters/importers on both sides
have been facing undue increase in the transportation cost.
The
present connectivity through sea route with Bangladesh is through ports of
Colombo and Singapore. The long sea route adds significantly to the
transportation costs of EXIM trade. There is no significant cargo movement
between sea ports of Bangladesh and India as it is not profitable for the big
vessels to operate between these sea ports. Under such circumstances there is
a need for smaller ships to provide direct connectivity of eastern sea ports of
India with Chittagong and other ports in Bangladesh. This, besides improving
the connectivity will also provide competitive freight rates.
The
biggest impediment in commencing coastal shipping between India and Bangladesh
was the non-availability of River Sea Vessel class of vessels in Bangladesh.
Bangladesh has foreign going vessels of higher technical and manning standards
which are not cost effective for coastal voyage between the two countries. The
matter was discussed with Bangladesh side during the Secretary (Shipping) level
discussion in Dhaka in July, 2012 and again in Delhi in February, 2013.
Several
Joint Technical Committee (JTCs) meetings have also taken place between India
and Bangladesh on the issue of coastal shipping. The previous engagements
finally culminated in a broad understanding on coastal shipping on 24th
June, 2014 in Dhaka. Thereafter, an Agreement on Coastal Shipping between
Bangladesh and India was finalized and signed on 6th June, 2015
during the visit of Hon'ble Prime Minster of India to Bangladesh. The
cooperation in coastal shipping between the two countries would be based on the
principles of national sovereignty, mutual benefits as per national laws and
international conventions.
Advantages
of the Agreement:
1) The opening of coastal shipping between India and Bangladesh
would enable the movement of cargo to the North East through coastal shipping
upto Chittagong and thereafter by road/inland waterways.
2) 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 through RSV category of vessels.
3) The
Indian ports will attract enhanced cargo and also the overall transportation
cost to Bangladesh will get reduced.
4) The
Indian ports serving as trans- shipment ports for Bangladesh cargo will derive
benefits by way of enhanced throughput as a result of Indo-Bangladesh coastal
trade
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