Nepal will now be able to use India’s Vishakhapatnam Port for its trade with third countries, with the two countries signing a Letter of Exchange in New Delhi on Saturday.

India has so far been providing a single transit route to the sea—the Kolkata Port. 

India had agreed in principle to allow Nepal to use the Vishakhapatnam Port in 2009, but a final agreement was delayed after Nepal opposed the double lock system that India implemented on Nepal-bound cargos. 

The Nepal-India Transit Treaty has stipulated a single-lock system which means that Nepal-bound third country imports enter via Kolkata with a one-time lock put on the container by the shipping agent or the carrier authorised by the shipping company. “Nepal initially opposed  the double lock system, but later agreed to the provision after finding this would not result in procedural delays,” said an off-icial of the Commerce Ministry.

The opening of an alternative transit route is expected to ease trade with third countries. Former Commerce Secretary Purusottam Ojha said the latest agreement has enabled Nepal to diversify its transit corridors. 

“One of the main benefits of getting access to an alternative sea port is it would help reduce traffic congestions that Nepal-bound cargos face in Kolkata,” he said. 

Due to heavy traffic at Kolkata port, Nepali traders end up paying more detention charges for failing to move goods in time. 

Ojha said as Vishakhapatnam is a deep sea port, big vessels can operate there, which will make it easier for Nepali traders to import bulk cargo.

To support the movement of goods between Nepal and the Vishakhapatnam port, the two countries have also signed a separate Letter of Exchange on rail transport.

Ojha said India should allow Nepal to set up a consular general office and the office of Nepal Transit and Warehouse Company at the port to help Nepali traders. 

The two countries also signed another Letter of Exchange on transit, enabling Nepal to do trade with Bangladesh without restrictions from India.

Currently, trucks carrying Nepali goods (not less than 25) can travel to Bangladesh through India only in the day time and under Indian police’s escort. “We will now be able to transport goods between Nepal and Bangladesh based on documents,” said a senior official of the Commerce Ministry.

The two sides also signed another Letter of Exchange on rail transit, under which India will offer rail transit facility through Singabad for Nepal’s trade with and through Bangladesh.