New cargo train route launched between Bangladesh and India

Bangladesh and India on Sunday launched a new cargo train route which could reduce the lead time for businesses of both countries and costs as well.

The train carrying 50 containers of fast-moving consumer goods (FMCG) and fabrics took just three-and-a-half hours to reach Benapole in Jashore from Kolkata.

MGH Logistics, a concern of MGH Group in Bangladesh, facilitated the trade. Exporters from the Indian side were Procter and Gamble, Arvind Ltd and Vardhaman Textiles Ltd.

"Initially, we will try to run one train a week. If the demand rises, we will do more," said Subash Deb, a director of MGH Group.

Businesspeople said the advantage of containerisation is that any exporter can move even one container (20 tonnes), and it is possible to aggregate traffic of various exporters and send by one train. Containerisation has other benefits too, such as minimal customs checks at borders as well as safety and security of cargo.

Bangladesh imported goods worth nearly $10 billion from India in 2019, while its export was less than $1 billion, according to the central bank data. Majority of these trades happened through the Benapole-Petrapole border, making it a congested point.

A truck would often have to wait for 12 hours or more at each border, pushing transportation cost up by 50 percent.

Kazi Waliul Haque, assistant executive engineer of Bangladesh Railway and in-charge of Jashore, Khulna and Benapole, confirmed The Business Standard about the arrival of the permanent container train.

"Around 12:30pm on Sunday, the train reached Bangladesh. The authority concerned is working on the delivery of the goods," he said.

Md Azizur Rahman, commissioner of Benapole Customs, told The Business Standard that a customs team was working on those imported goods abiding by a standard operation procedure.

"Our officers are ready regarding assessment and inspection for the earliest delivery of those goods," he said.

The Container Corporation of India Ltd and Bangladesh Container Company Ltd had signed a memorandum of understanding to start the service in 2017. In 2018, a container train arrived in Bangladesh through Gede-Darshana as a trial, but the movement did not start on a regular basis.

Also, the list of goods permitted through that crossing was insufficient to make economic sense.

Onions, fly ash, chilies, ginger and turmeric are imported through rail wagons. From this July, parcel vans and containers were also added to this product mix.

The first rake of parcel vans containing chilies from Guntur (Andhra Pradesh) was made over to Bangladesh on July 13.

The National Board of Revenue (NBR) of Bangladesh in June this year permitted container trains on Benapole-Petrapole route to facilitate the transport of essential goods between two countries amid disruption of import and export activities owing to the pandemic.

The Indian High Commission in Dhaka requested the Bangladesh authorities to facilitate export of essential goods to Bangladesh through the route.

A technical committee headed by an additional secretary of the commerce ministry also recommended the route and advised introducing side-door container trains.

According to the NBR permission clause, container trains should be side-door ones. The continuation of the service will be reviewed when the Covid-19 pandemic situation will become normal.

The advantage of parcel vans is that it can be suitable for a wide range of products such as agricultural products, FMCG, yarn and milk powder. A shipment of even up to 500 tonnes can be conveniently made over in parcel vans whereas in case of wagons, at least 2,000 tonnes are required.

With the introduction of parcel vans, it is expected that new cargo, which was not being moved by rail, can be transported to Bangladesh by rail, sources said.

The Indian High Commission in Bangladesh, on its verified Facebook page, said the permanent container train service, apart from freight and parcel trains, will boost India-Bangladesh trade.

Last week, the two countries also marked another partnership with the trial run of transhipment of Indian goods through Bangladesh to India's north-eastern states using Chattogram port last week.