Very low transit fee for India to use Bangladesh route raises eyebows

[Riyad]

Low transit fee for India raises eyebrows
May 27, 2016 12:46 am·0 CommentsViews:
Shakhawat Hossain

By allowing India to transport its cargo through Bangladesh paying Tk 192 as the transit fee per tonne raised many eyebrows in the country.

A core committee of Bangladesh Tariff commission recommended charging Tk 1,058 as the transit fee per tonne of Indian cargo set to pass through Bangladesh any time soon.

Bangladesh Inland Water Transport Authority officials said they already gave permission to India to transport 1,000 tonnes of corrugated iron sheets from Kolkata to Agartala via Ashuganj by paying Tk 192 as the transit fee per tonne.

They said that India had been given the permission to use Bangladesh’s inland water ways and the Ashuganj river port for the trans shipment of the consignment from Kolkata in West Bengal to Agartala, the capital of the northeastern Indian province of Tripura.

They said India had also been permitted to transport the consignment from Ashuganj to Agartala by road in Bangladesh and on the other side of the border.

This would be the first time that India would pay transit fee for the transportation of its consignments through Bangladesh.

Bangladesh provided the transit facility to India though its northeastern provinces are not landlocked.
India has road links to transport goods to its northeastern provinces from West Bengal and other regions.
In recent years, Bangladesh government allowed India to transport goods through Bangladesh on a number of occasions charging no transit fees.

Officials in Dhaka said the transit fee at Tk 192 per tonne was fixed at a meeting of shipping secretaries of the two countries in Delhi in November 2015.

They said that the low rate was fixed as India refused to pay the transit fee of Tk 1,058 per tonne.
Economist and former caretaker government adviser Mirza Azizul Islam said the by allowing the two shipping secretaries to fix the low transit fee at their Delhi meeting the Bangladesh government astonished the nation.
The rate was much lower than charging Tk 1,058 per tone recommended by the Bangladesh Tariff Commission, he told New Age Thursday.

He demanded an explanation on the issue from finance minister AMA Muhith.

Out of Tk 192 India would pay as the transit fee per tonne, the National Board of Revenue would get Tk 130 as customs duty while the roads and highway department would get Tk 52 and the BIWTA would receive Tk 10, said officials.

India mounted persistent pressure of Bangladesh to win the transit and transshipment facilities through Bangladesh to transport goods between its northeastern provinces and the other parts of the country.

But India was reluctant to pay the transit fees to Bangladesh.

As Bangladesh repeatedly raised the issue, it took India pretty long to agree to pay transit fees as per the World Trade Organization rules.

Economist Debapriya Bhattacharya said there was no scope to settle the transit fees in the peculiar circumstances facing Bangladesh and India under the WTO rules.

He said the circumstances in Europe and Africa were very different.
In Europe and Africa only lack locked countries were provided transit against payment of much higher transit fees.

In South Asia, neither Nepal nor Bhutan, got the transit they deserve as landlocked countries.

Debupriya expressed doubts that the interests of Bangladesh was protected by fixing the transit fee at Tk 192 per tonne of Indian cargo to be transported through Bangladesh.

The incumbent government in Bangladesh met a series of Indian demands seeking transit through Bangladesh amending the bilateral inland water transit and trade treaty and allowing India to use the Ashuganj river port.

The Bangladesh government also conceded when India refused to provide mandatory bank guarantee containing a declaration on cargo to be transshipped by India to facilitate checking by the Bangladesh NBR.

World Customs Organization and the United Nations Conference on Trade and Development provide for checking false declaration of goods, said NBR officials.

Former Tariff Commission chairman Mujibur Rahman who led the core committee said the low transit fee was totally insufficient for the recovery of the massive investments on infrastructure Bangladesh would have to make to facilitate India enjoy the transit facilities.

Economists demanded a thorough review of the paltry transit fee to be charged from India.

http://newagebd.net/232128/low-transit-fee-for-india-raises-eyebrows/

 

[war&peace]

BD getting a typical satellite state behaviour. Nothing surprising in it.

 

[jetray]

Transit fees should be based on market demand & supply. Sure bangladesh has right to charge more but in that case it will be un economical for India to use bangladesh as transit point.

If the charges are high they would better spend time to transport than money. More ever when the goods are passing thru another country or using water ways risk also increases and so will be insurance costs. It should be left to market to decided the price. May be local bangladeshi transporters will provide better competing price for transporting the goods. As it will be considered import/export.

BD getting a typical satellite state behaviour. Nothing surprising in it.

oh yeah, it will be really helpful if you desist from posting rhetoric one liners and instead have some useful stuff for a change.

 

[Riyad]

Transit fees should be based on market demand & supply. Sure bangladesh has right to charge more but in that case it will be un economical for India to use bangladesh as transit point.

If the charges are high they would better spend time to transport than money. More ever when the goods are passing thru another country or using water ways risk also increases and so will be insurance costs. It should be left to market to decided the price. May be local bangladeshi transporters will provide better competing price for transporting the goods. As it will be considered import/export.


oh yeah, it will be really helpful if you desist from posting rhetoric one liners and instead have some useful stuff for a change.

Northeast can't be developed without cooperation with Bangladesh. So Bangladesh has full right to charge 1058 BDT which is still low but refusing to pay that and paying merely 200 BDT for trasnsit is just joke for Indo-Bangladesh bilateral relation. Bangladesh is the gateway to look at Southeast Asia for India as Iran is the gateway to look at central Asia.

 

[jetray]

Northeast can't be developed without cooperation with Bangladesh. So Bangladesh has full right to charge 1058 BDT which is still low but refusing to pay that and paying merely 200 BDT for trasnsit is just joke for Indo-Bangladesh bilateral relation. Bangladesh is the gateway to look at Southeast Asia for India as Iran is the gateway to look at central Asia.

Stop trolling and blabbering. Either you have serious comprehension problem or you deliberately want to ignore the facts about economic viability.

 

[BanglaBhoot]

Stop trolling and blabbering. Either you have serious comprehension problem or you deliberately want to ignore the facts about economic viability.

The need is India's so Bangladesh can demand Tk1058. What India cannot do is intimidate and bully the government and the people to accept a lower fee.

 

[jetray]

The need is India's so Bangladesh can demand Tk1058. What India cannot do is intimidate and bully the government and the people to accept a lower fee.

If india wanted to bully then why the pay the transit fee at all? Fact is that you have anti-india mindset which propels you to look every thing from that perspective.

There is a difference between needs & wants. As I said if tariff is unviable India will continue using Indian territory but it will take longer time. Just bcos bangladesh gives transit does not mean India will pay arm & leg for it. Economic viability will dictate the trade not your fancy fee structure.

As usual you can continue to rant & rave, keep harping that India is bullying,big brother, resist India,satellite of India ....etc instead of looking at economics, it will only show that you are pakistani cloaked as bangladeshi nothing more.

 

[war&peace]

oh yeah, it will be really helpful if you desist from posting rhetoric one liners and instead have some useful stuff for a change.

Truth is hurting you

 

[Sliver]

The cost of transit through BD should be lower than cost of transit through the chicken neck region of India.
Just because through BD is the shortest route to the north east, does not mean BD can charge an arm and a leg.

Besides, if you make the route attractive (price wise), more shipments will go through BD instead of any other route. its a serious way to earn free money. all because you are located there strategically.

 

[BDforever]

The cost of transit through BD should be lower than cost of transit through the chicken neck region of India.
Just because through BD is the shortest route to the north east, does not mean BD can charge an arm and a leg.

Besides, if you make the route attractive (price wise), more shipments will go through BD instead of any other route. its a serious way to earn free money. all because you are located there strategically.

the charge of TK1,058 per tonne makes at least (if we consider time then more cheap) half of cost of using other routes, still not paying it

 

[Sliver]

the charge of TK1,058 per tonne makes at least (if we consider time then more cheap) half of cost of using other routes, still not paying it

Is there an economic feasibility study that gives this price? who came up with this price? or even that 192 price for that matter?
mind you, you can always increase the price later once you make these feasibility studies as a periodic survey every 5 years or so.

 

[BDforever]

Is there an economic feasibility study that gives this price? who came up with this price? or even that 192 price for that matter?
mind you, you can always increase the price later once you make these feasibility studies as a periodic survey every 5 years or so.

first read brother.
core committee of Bangladesh Tariff commission who recommended it

 

[Homo Sapiens]

Bangladesh should scrap the entire deal of giving transit to india.If they transport massive 10 million ton goods through BD,they will pay just 192 crore taka or just 25 million dollars. Why BD would damage its infrastructure and environment to get this miniscule amount of money? Even 250 million dollar would not justify it.Bangladeshi people from all side should organize protest and force govt. to scrap this anti-national deal with India.

 

[Rajaraja Chola]

Bangladesh should scrap the entire deal of giving transit to india.If they transport massive 10 million ton goods through BD,they will pay just 192 crore taka or just 25 million dollars. Why BD would damage its infrastructure and environment to get this miniscule amount of money? Even 250 million dollar would not justify it.Bangladeshi people from all side should organize protest and force govt. to scrap this anti-national deal with India.

Its astonishing how many BD'ians including you look through the prism of 192 Taka. When you are trying out a new business, its your responsibility to attract customers and not scare them away with your costs. Aka la Wal Mart.

Take the Transit for Example. 90% of the trucks will be Bangladeshi. Harbour charges for the consignment. Diesel expenses. Auto part stores in case of spares. Custom charges. Inland water way charges. Toll charges (if that highway has one). Its all in and out BD favourable package.
And I dono how much 192 Taka can buy you now. But its recommended not to scare of potential transit money through high costs. India is connecting Thailand through Myanmar and highway is going to get completed. In a way, BD can join and in more ways, can benefit through this alliance. Looking everything through money wont give you any leverage.

As for others talking about Bhutan and Nepal not getting any special treatment cos of their landlocked behaviour, both of the countries are getting a raw deal. Fuel for both the nations are not charged an extra rupee for transport or transit. Its an open border too. They are getting a very very good deal.

 

[dray]

Northeast can't be developed without cooperation with Bangladesh. So Bangladesh has full right to charge 1058 BDT which is still low but refusing to pay that and paying merely 200 BDT for trasnsit is just joke for Indo-Bangladesh bilateral relation. Bangladesh is the gateway to look at Southeast Asia for India as Iran is the gateway to look at central Asia.

India is only not ready to pay what Bangladesh is asking, that is tk1058.

The need is India's so Bangladesh can demand Tk1058. What India cannot do is intimidate and bully the government and the people to accept a lower fee.

The cost of transit through BD should be lower than cost of transit through the chicken neck region of India.
Just because through BD is the shortest route to the north east, does not mean BD can charge an arm and a leg.

Besides, if you make the route attractive (price wise), more shipments will go through BD instead of any other route. its a serious way to earn free money. all because you are located there strategically.

the charge of TK1,058 per tonne makes at least (if we consider time then more cheap) half of cost of using other routes, still not paying it

In the example, 1000 tonnes of cargo @ tk192 per tonne is tk192,000/- of transit fee, which is still marginally costly for that low cost item like corrugated iron sheets. @ tk1058, as Bangladesh demands, would have shot the transit fee to a whooping tk10,58,000/-, nobody would have paid that kind of money for corrugated iron sheets, we would have used our own roads or rails even if it is a bit longer distance, and Bangladesh would have lost the entire transit business, including all future ones.

Just because there is a transit agreement now, Bangladeshis are all going crazy and thinking that they can demand an arm and a leg for it, what if we start demanding such crazy rates for all Bangladeshi transports to different countries? You don't even have the option to bypass us. Be reasonable, and you will earn a lot, because we will send tonnes of goods through Bangladesh if the price is right.

Bangladesh should scrap the entire deal of giving transit to india.If they transport massive 10 million ton goods through BD,they will pay just 192 crore taka or just 25 million dollars. Why BD would damage its infrastructure and environment to get this miniscule amount of money? Even 250 million dollar would not justify it.Bangladeshi people from all side should organize protest and force govt. to scrap this anti-national deal with enemy.

Transit used in this case is mostly river, a few fish might get damaged, but I doubt even that. Besides, we hold the keys to all the land routes from Bangladesh, barring that small window to Myanmar at the bottom of your map...and BD's relations with Myanmar is not very friendly. So, you scrap the deal, we scrap the deal.