Trade to Bangladesh via Kolkata port down 18%

Through February FY23, cargo handled by Syama Prasad Mookerjee Port, which includes Kolkata Port and Haldia Port, totaled 59.8 million tonnes (mt). The target for FY23 is set at 65 tons, and in FY22 the port handled 58.2 tons of cargo.

“Service between Kolkata and Bangladesh has declined slightly this fiscal year,” Minister for Ports, Shipping and Waterways Sarbananda Sonowal said in a reply to Parliament.

Bangladesh is India’s largest trading partner in South Asia, with bilateral trade between the two nations estimated at US$18.2 billion in FY22. Of this, exports from India totaled US$16.2 billion and imports US$2 billion.

Exporters usually prefer the sea route from Kolkata (port) to Chittagong (in Bangladesh) and once a month a container ship sails from the east Indian city to the neighboring country.

The main export items include cotton yarn, sponge iron, rice, silicon, electrical goods and plastic products.

Stakeholders say that due to some internal issues in Bangladesh, the LC generation has been affected, hence demand is low.

“Requests have been received from exporters to extend layovers … so that they can consolidate and ship the cargo once they receive LC from Bangladesh,” Sonowal said.

The opening of LCs there fell nearly 25 percent to US$39.46 billion (down US$13 billion) from July to January, according to reports in Bangladeshi media. The LC settlement — or import payment — for that seven-month period was $46.82 billion — up about 3 percent, indicating the impact of the global commodity price hike. Foreign exchange reserves were around $33 billion in January.

In shipping jargon, demurrage refers to the fee paid by the trader for the use of containers within the terminal beyond free time.

On the other hand, a letter of credit from banks guarantees that payment from a buyer (to the seller) will be received on time and in the correct amount. If the buyer is unable to make a payment, the bank will have to make up for it.

Exporters using the port of Kolkata for shipments to Bangladesh are currently getting a 40 percent discount on the carton rate (for both import and export).

Cargo destined for Bangladesh has coastal status, which entails lower vessel and freight related fees.

A 70 per cent waiver of the Calcutta Dock Labor Board fees for filling containers at Khidderpore Dock is also permitted.

A quantity-dependent exemption also applies to chippings and boulders that are sent to the neighboring country; and an exporter who handles more than 100,000 tons by rail gets a 50 percent waiver of local transportation charges.

Related Articles

Back to top button