Transshipment might eat up export trade at Akhaura Land Port

Tripura, a northeastern state of India, used to buy steel rods from Bangladesh as it was very time-consuming and expensive to have those delivered from mainland India.

However, the transshipment of goods to India is posing a threat to this export, which is not  very large in quantity.

"Yes, our export opportunities will shrink," said Tapan Sen Gupta, deputy managing director of BSRM, which is the major exporter of this product to India.

The BSRM exported around 2,000 tonnes of rods to Tripura in the fiscal year 2019-20. The quantity is very insignificant compared to the steel maker's annual production of 16 lakh tonnes.

Gupta added,"India has the necessary raw material, and its production cost is lower than Bangladesh's. So, Indian businesses can now easily transship their rods to Tripura and some other northeastern states."

Meanwhile, businesses in Brahmanbaria – the border region of Bangladesh with Agartala in Tripura – have expressed concerns over missing out on export opportunities to Agartala because of transshipment.

Indian businesses can now easily transship their rods to Tripura and some other northeastern states using Akhaura Land Port. Photo: TBS

Under the trial run of the transshipment deal between Dhaka and Delhi, India formally received the first consignment of goods through Akhaura Land Port in Brahmanbaria on Thursday morning.

Four trailer trucks delivered 53 tonnes of rods and 49 tonnes of pulses to Agartala Land Port. India took delivery of the first consignment consisting of rods and pulses after paying all charges and fees.

Business circles in Akhaura believe that if India uses Bangladeshi ports under the transshipment deal to move high-demand goods such as rods and cements, it will negatively impact the export trade at Akhaura Land Port.

In October, 2018, the two neighboring countries signed the transshipment deal, "Agreement on the use of Chattogram and Mongla Port for movement of goods to and from India", to transport Indian goods to its north-eastern states through Bangladesh territory.

Subsequently in 2019, Bangladesh and India finalised the standard operating procedure (SoP) in this regard. The deal will enable neighboring India to transport goods to its north-eastern states quickly and easily.

According to sources, Bangladesh has been exporting various goods to India's north-eastern states through the Akhaura Land Port since its establishment in 1994.

India took delivery of the first consignment consisting of rods and pulses after paying all charges and fees. Photo: TBS

Businesses used to export a large volume of goods through the land port, but export trade has declined over the last few years. As the communication system between Tripura and other states steadily improved, Indian businesses began cutting down on imports from Bangladesh.

Indian businessmen are currently buying stones from Shillong, which has been witnessing a high demand. They have also halted fish imports from Bangladesh on numerous occasions, citing various reasons.

Before the Covid-19 pandemic outbreak, hundreds of trucks carrying rods, cement, stones, coal, cotton, fish and plastic used to enter Agartala Land Port every day. But as the virus outbreak spread, the number of trucks dropped by more than half.

The volume of exports has dropped even further due to the ongoing pandemic situation and the arrival of the monsoon. Through the Akhaura Land Port, no more than 20-25 trucks enter Agartala at present.

The export of rods, coal, stone and fish has remained suspended as of Thursday, and only cement, edible oil, cotton, plastic and other food items are being exported. The volume of exported goods is also considerably low.

Sources said before the coronavirus crisis, Bangladesh used to export around 300 tonnes of rods and 1 lakh sacks of cement to India through the Akhaura Land Port. In a bid to preserve the export market of rods and cement, local businesses have demanded that such goods be excluded from the transshipment facility.

Speaking to The Business Standard, a number of traders said exports started to slump even before Covid-19 hit Bangladesh, and the pandemic has decimated the export trade in the Akhaura Land Port.

Under the circumstances, if businesses lose the opportunity to export high-demand products such as rods and cement to India, it will be very difficult for them to continue their trade activities in the Akhaura Land Port.

Idon Mia, a local businessman, said, "The transshipment process will disrupt our export trade. We used to export goods to India; now they are moving goods directly to the destination. This will cause our exports to drop."

Commenting on the matter, Akhaura Land Port Customs Clearing and Forwarding Agents Association General Secretary Ahmed Khalifa said, "Bangladesh used to export goods directly to India through the land port, but now the neighbouring country is moving goods from Kolkata to Tripura through transshipment.

"Given such a reality, the transshipment process will definitely impact export trade at Akhaura Land Port. Exports bring remittance, but India is now delivering its own goods to Tripura."

Stating similar views, Akhaura Land Port Importers and Exporters Association General Secretary Shafiqul Islam said the continued transshipment of goods such as rods and cement to India would hamper the export trade of local businesses.

"This is only a trial run, so we are currently monitoring the situation."

Akter Hossain, owner of the clearing and forwarding agent Adnan Trade International, which transported the first consignment of the trial run, said, "The transshipment deal will strengthen bilateral trade relations between the two neighbouring countries.

"The latest delivery was a trial run, and many other goods are ready to be delivered."