The government has been considering opening a liaison office at Vishakhapatnam Port on India’s east coast in a bid to speed up paperwork and customs clearance.

Nepali traders have been reluctant to use Vishakhapatnam, which was recently cleared for Nepal’s third country trade, because of the lengthy documentation procedures there; and officials hope that eliminating hassles will encourage them to route their shipments through the port.

Currently, traders have to wait for a long time to have their documents like letters of credit (LC) and cargo clearance documents processed mainly due to the absence of a Nepali government office at Vishakhapatnam Port.

“In order to make things easier for traders, we are holding talks with Indian authorities about opening a contact office at the port,” said Commerce Ministry spokesperson Rabi Shankar Sainju.

Two years ago, India had allowed Nepal to use Vishakhapatnam Port to trade with third countries. However, traders are still sticking to Kolkata Port, the traditional transit route to the sea, due to the slow documentation process at Vishakhapatnam and lack of clear modalities on handling consignments at the new gateway.

Traders have been requesting the government to open a consulate at Vizag, but progress has been slow on this front. “Due to delays on the proposed consulate, the ministry has aimed to open a small unit there for now,” Sainju said.

Visakhapatnam is a deep water port where big vessels can operate, making possible transportation of bulk cargo. The downside of Visakhapatnam Port is the distance from Nepal, which is around 1,436 km. In contrast, Haldia Port is located about 704 km from Nepal.

Despite the longer distance, using Vizag is expected to reduce the cost of third country trade due to the possibility of sending bulk cargo and the low freight rates charged by shipping lines serving the port.

“Traders are given five to six days to send the empty containers back to Vizag after they have been unloaded at Birgunj Dry Port,” said Sainju, adding that this allows traders to avoid delays and save on demurrage charges.

In October 2016, Nepal Rastra Bank allowed commercial banks to open LC for goods coming into the country from Vizag. However, processing takes several days due to the absence of a concerned office at the port.

According to the ministry, banks need to send the LC via the central bank to the Nepal Embassy in Delhi, but they wait until they have collected a pile of documents and send them once a week, which means a lot of time.

Likewise, traders importing goods through Vizag have to go all the way to the Nepal Embassy to get their clearance approval. Moreover, they complain that Vishakhapatnam Port is inefficient due to lack of infrastructure.

“The establishment of a liaison office will speed up paperwork and eliminate many hassles as traders will not have to make trips to various offices to obtain clearance and approval,” Sainju said.