Implementation of ECTS still ineffective

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Kathmandu, July 14

Effective implementation of electronic cargo tracking system is in doubt as only a handful of importers have been abiding by the rule introduced on April 18.

ECTS from Kolkata port to inland clearance depot Birgunj is voluntary for importers for the first 90 days, which will be over on July 16. Under the ECTS, the movement of Nepal-bound cargo can be tracked from the Kolkata port and the respective customs offices of India and Nepal with electronic chips installed on Nepal-bound cargo containers at Kolkata port.

The government enforced this system to minimise the turnaround time of shipping line containers from Kolkata to Birgunj and vice-versa to reduce demurrage and detention charges incurred by Nepali importers due to delay in returning the containers to shipping lines.

The ECTS is a tool for controlling the chances of trade deflections and entering into a trans-shipment agreement with the southern neighbour. After the trans-shipment agreement, Nepal-bound cargo will be directly delivered to the designated port of Nepal without customs transit declaration at the transit port of India — Kolkata/Haldia and Visakhapatnam.

However, traders have not cooperated with the government for effective implementation of ECTS, according to Ravi Shanker Sainju, joint-secretary at Ministry of Industry, Commerce and Supplies.

According to MoICS, big importers have their own freight forwarding companies and enjoy a harmonious relationship with customs house agents at Kolkata port. This, according to ministry officials, enables those who import on a large-scale to pass on their detention/demurrage charges to small and medium importers.

The strong nexus between Nepali freight forwarders and CHAs at Kolkata port is making the ECTS ineffective and big importers are backing freight forwarders, who stand to lose with implementation of the trans-shipment agreement, said officials.

When the ECTS is made mandatory from July 16, traders will have to pay $45 per container to obtain this service. After signing up for the service, the port customs will not have to place additional locks on Nepal-bound cargoes to ensure that goods imported for Nepal are not sold in India. Also, the provision requiring purchase of additional insurance in India on import of sensitive goods won’t be compulsory.

Meanwhile, Binod Kumar Sethia, vice-president of Nepal Foreign Trade Association, said the traders will sign up for
the service once it becomes mandatory.

Written by Nikki Hamal
This news first appeared on https://thehimalayantimes.com/business/implementation-of-ects-still-ineffective/ under the title “Implementation of ECTS still ineffective”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.