"In recent months, cost of overland transportation of goods from Guangzhou -- the major supply point in China -- has increased sharply. [break]
This has made cost of importing through ship via Kolkatta some 40 percent cheaper than importing via Khasa," Durga Lal Shrestha, the president of Nepal Trans-Himalayan Traders Association told Republica.
According to the association, fare for transporting goods from Guangzhou to Kolkata and from Kolkata to Kathmandu totals to around Rs 275,000 per container. Whereas transporting the same from Guangzhou to Khasa and from Khasa to Kathmandu totals to Rs 365,000.
"Actually, transporting goods from Guangzhou to Khasa is cheaper than Guangzhou to Kolkata. However, as transporters operating along the Tatopani-Kathmandu route are charging exorbitant rates, the overall cost of doing business via Khasa has become impractical," said Shrestha.
Records show, importers can receive a container of goods in Kathmandu from Kolkata by paying Rs 100,000, whereas the cost of transporting a container from Khasa to Kathmandu could go up to Rs 250,000. Interestingly, distance between Khasa and Kathmandu is about a third of distance between Kolkata and Kathmandu.
"The problem has to do with syndicate of transporters. Unfotunately, Commerce secretary who makes big speeches on trade facilitation has done nothing to stop this evil, despite heading the Competition Board," Shrestha added.
Apart from the cost factor, traders say imports from Kolkata have less chances of breakage and damages to goods apart from low cost.
"Electronic goods are fragile and prone to breakage and damages. Hence, traders are switching to Kolkata port for safer delivery of goods," said Shrestha.
As a result of this shift, import of electronic goods, which used to make major chunk of imports from Khasa, has dropped significantly to 5-10 percent.
Nepal imports wide range of electronic goods including computers and their parts, calculators, television sets, radio sets and their accessories, electronic conductors and air conditioners from China.
Trade balance between China and Nepal has always remained unfavorable to Nepal and the volume of trade deficit has only grown over the years. Figures at the Trade and Exports Promotion Center (TEPC) show that Nepal suffered a trade deficit worth Rs 31 billion in 2009/10 with China. It was Rs 21.5 billion a year earlier.
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