July 17: Nepal’s foreign trade has been severely affected by the four months long lockdown which the government imposed on March 24 to control the transmission of coronavirus. The train traffic at the Birgunj Dry port where containers from overseas and cargoes from different parts of India arrive, has decreased dramatically.

The movement decreased after containers stopped arriving at Kolkata and Visakhapatnam ports in India. As of July 16, only 17 containers, two sacks and five racks of iron have entered the port.

The statistics of Himalayan Terminal shows that in average, 70 racks of cargo have entered in the last three months. On the annual train traffic, this number is 95.

“Normally, three to four trains come to the port in a day but now hardly a train arrives,” said Bishnukant Chaudhary, CEO of Himalayan Terminal, which operates the Birgunj dry port.

According to Animesh Kumar, a senior official at the Himalayan Terminal, cargo arrivals have dropped further this week. "Not a single rack is likely to arrive on Thursday," he said.

Chaudhary said that while there used to be 25 to 30 racks on the way from Kolkata and Visakhapatnam to Birgunj, it has now dropped to two to four. The terminal said that only two containers and racks of iron from Visakhapatnam were seen on the road on Thursday. There is no pressure of containers coming to Nepal even in this port.

Laxmi Khadka, chief of the Kolkata based Nepal Transit and Warehousing Company said that not even 25/30 containers could reach the Kolkata port now which used to receive around 200 containers daily. According to the port management, not a single rack has reached Kolkata in three days.

Entrepreneurs said that the goods of letter of credit (LC) opened before the lockdown have arrived and since the number of LCs has decreased from then, its impact has seen on import. The lockdown was imposed from March 24.

Guru Poudel, director of the Foreign Exchange Management Department of Nepal Rastra Bank, said that very few LCs have been opened for about a month since then. According to him, although the process of opening LC has improved after March, the situation has not become normal. As the validity period of LC is 120 to 150 days, the importer says that the goods of LC before the lockdown have already arrived.

Ashok Kumar Temani, chairman of the Transport and Transit Committee and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) claimed that the import was reduced as the government was only trying to collect taxes from traders and not facilitating business. “Trade has become uncomfortable due to Corona. Credits from the market have not been raised. But the government is not concerned in anything other than collecting taxes and raising revenue,” he said.

Although foreign trade has declined, Temani says it will have a cyclical effect on the economy. Importer Suresh Rungta has complained that entrepreneurs are discouraged due to government policy. “The cost of most goods and services has increased due to corona. However, the government is inflexible about the old values and evaluation. Such an impractical policy would further weaken the business,” Rungta told New Business Age.

Both Birgunj custom offices fail to meet revenue targets

The Birgunj (ICP) and dry port customs at the main customs checkpoint failed to meet the revenue target in the last fiscal year. Out of the target of Rs 188 billion set for Birgunj customs, only Rs 126 billion has been collected.

Chief Customs Administrator Dhundi Prasad Niraula said that this amount is only 67% of the target. Birgunj customs had raised 72 percent of the target in FY2075/76.

Similarly, the dry port customs office has collected revenue of Rs 36.19 billion. According to customs Chief Umesh Shrestha, the collected revenue is 86 percent of the annual target. A target of Rs 41.88 billion was given to the dry port customs in the last fiscal year.

Customs officials say the target could not be met as imports were affected by the corona outbreak and lockdown in the last four months of the year. They say the government's control over imports of luxury goods and the decline in foreign trade have had an impact on overall revenue collection.