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Bhutan’s exports to Bangladesh put into frying pan by local syndicate and pushed into the fire by WB Govt

Bhutan’s trade statistics makes for some depressing reading as our imports far exceeds our exports, but the lone bright spot is our trade with Bangladesh which is the only country with which we have a positive trade balance.

Smooth until 2013

It all started in the late 1980’s when Bhutan started exporting apples and oranges to Bangladesh, and over the years grew to include cardamom, ginger, dolomite, limestone, boulders, processed food etc.

What helped the trade was the close location of Bhutan, Bhutan having products that Bangladesh wanted and a very positive political attitude from Bangladesh to Bhutan since Bhutan was the first country in the world to recognize Bangladesh in 1971.

It was all going smoothly until 2013 when an internal issue cropped up in Assam whereby a trade route there got closed for a while and all the traffic got diverted to the Changrabandha Indian Land Customs Station (LCS) through which around 70 percent of Bhutan’s exports go to Bangladesh.

This led to crowding and trucks carrying Bhutanese exports had to wait longer and longer to get across.

Before 2013 trucks with Bhutanese exports could cross either on the same day or within 2 days, but with the diversion of the Assam route the waiting time went up to 9 to 10 days till 2015.

The Assam route was eventually reopened, but from 2016 onwards there has a huge jump in boulder exports from Bhutan and that led to huge crowding and from then on trucks would have to wait 30 days to even 45 days to cross over.

The syndicate starts extorting and delaying

It was around this time that a local syndicate started forming in Changrabandha that wanted to effectively start extorting the trucks coming from Bhutan.

This syndicate started making money in two ways. The first way was that they owned the parking spot in Changrabandha which charged Nu 130 a day for the trucks and so a truck being held up there for a month would have to pay Nu 3,900.

The other way the syndicate made money is that if Bhutanese exporters hired Changrabandha trucks then these trucks would be given first preference to go to Bangladesh with trucks even making two trips in a week.

However, these trucks are limited in number, and so many Bhutanese exporters used trucks from other places and their consignments would get held up.

The General Secretary of the Bhutan Exporters Association (BEA), Tshering Yeshey, said that if it was just the syndicate that involved the local transport association, export association and others then they would not have such powers, but they seemed to have the backing of some influential and powerful people.

No help from authorities on either side

Tshering said he made several trips to meet the Sub Division Officer who is the highest official there and also the Superintendent of Police, but despite assurances nothing would change.

He said an attempt to get a separate parking spot that would have first come first serve basis ended in violence as the local syndicate members resorted to violence and even stoning vehicles.

He said the Bhutanese government was informed of the developments, but the BEA was encouraged to handle the matter at their level.

The Changrabandha harassment and extortion became one more trade barrier in addition to other bribes and offerings that Bhutanese Exporters were forced to pay.

Suvidha and WB Govt enters the scene

A 12 July 2022 notification by the Transport Department of the West Bengal State Government said that transporters and exporters from all over the country (India) exporting their goods to Bangladesh are facing a backlog of large numbers of trucks waiting to reach the border check posts and other malpractices.

It said the Information Technology and Electronics Department of the Government of West Bengal will introduce an ‘Online Queue Management System,’ where trucks ferrying products to Bangladesh through the Indian Land Customs Stations (LCS) have to register online and pay the fee.

There are 8 LCS through which goods are exported to Bangladesh of which Bhutan uses three which are Jaigaon, Changrabandha and Fulbari and interestingly the system has so far been first operationalized in Changrabandha and Fulbari.

The BEA GS said in July itself they alerted the Ministry of Economic Affairs of what was coming.

They also alerted the Economic and Finance Committee of the National Assembly.

Then from 26 September 2022 it was started as the ‘Suvidha’ online portal with the initial charge being Nu 10,000 per truck booking.

The BEA approached the MoEA which directed it to the Ministry of Foreign Affairs which took up the matter through the Bhutanese Consul General in Kolkata, and it was reduced to Nu 2,000 per truck.

Tshering said that initially the assurance was that for Nu 2,000 per truck, could get entry within 72 hours.

Though hesitant about how the West Bengal government could charge such an amount despite a Free Trade Agreement, the BEA and exporters agreed hoping it would save them time and money.

Frying pan into fire

However, the export problem jumped from the frying pan into the fire as from 4 January 2022 the Transport Department of West Bengal through a notification significantly jacked up the prices for Bhutan.

An official said that the West Bengal government said they received complaints from Indian truckers who are paying higher rates on why Bhutan was being given an exception which is why the same charges were applied on trucks carrying Bhutanese exports.

As per this, vehicles carrying perishable items would have to pay Nu 3,000, vehicles carrying boulders above 6 wheeler to 10 wheeler have to pay Nu 5,000, vehicles carrying stone chips up to 12 wheeler would pay Nu 7,000, vehicles of 14 to 20 wheeler carrying non perishable items would pay Nu 12,000 and vehicles of 20 wheeler and above carrying non perishable items would have to pay Nu 15,000.

The Nu 5,000 category hit the Bhutanese boulder exports the hardest as this is the category of trucks they use.

However, the charges up to Nu 15,000 per truck would also apply for Bhutanese exports using bigger trucks.

Passing the buck?

The BEA approached the Ministry of Industry, Commerce and Employment (MoICE) who asked them to approach the Ministry of Foreign Affairs and External Trade (MoFAET) who is now taking up the issue.

Tshering complained saying that in fact the MoICE should be involved fully in this and be giving the data and support to the MoFAET, but it is instead the BEA giving all the data and information.

The MoFAET is pursuing the matter through its Consul General office in Kolkata, but a problem here is that Bhutan’s earlier Consul General had come back and a new one is not yet recruited.

Tshering said the Indian officials are very conscious of hierarchy and they will only deal with the CG and not any junior official there and even a CG appointed there takes some time to develop contacts.

The MoFAET minister Dasho (Dr) Tandi Dorji said the matter is being pursued through the CG office and a CG will be appointed soon and he said while it is a decision of the state government of West Bengal the central government in Delhi is also being informed.

BCCI gets some assurances

So far only the Bhutan Chamber of Commerce and Industry (BCCI) President Tandy Wangchuk seems to have got some results.

The President had previously gone to the global investor summit in Kolkata and met with the West Bengal Chief Minister and also the Chief Secretary.

Using this link, the BCCI President called the Chief Secretary who forwarded him to a senior official in the Transport Department.

The BCCI President said the senior official told him that exceptions can only be made on any two items and so far he has said dolomite and limestone and a notification may soon come out.

Violation of Free Trade Agreement ?

Tshering said that in 17 January they had written to the Prime Minister on the issue.

The BEA letter said the Suvidha App and fee is a violation of the Article 1 of the ‘Agreement on Trade, Commerce and Transit between RGoB and GoI of 12 November 2016’ which says ‘There shall, as heretofore, be free trade and commerce between the territories of the RGoB and GoI.’

It says it also against Article-5 which states, ‘All exports of Bhutan to and from countries other than India will be free from and not subject to customs duties and trade restrictions of the GoI.’

There is some hesitation within the MoFAET to quote this agreement as Bhutan has started charging fees for Indian vehicles in Bhutan.

However, this view within the MoFAET may be ignoring two things. The first is that this is to do with trade and commerce as Indian goods trucks entering Bhutan with goods do not get charged such rates.

Secondly, the Indian Foreign Policy which has evolved with time does not believe in following reciprocity with its smaller neighbours, and so while Bhutan may take some steps to protect its interests it does not mean the agreement does not hold water on such matters like Suvidha app.

Questions

Tshering who has been handling export issues for two decades has a question and two views.

The question is that why Bhutanese trucks going via Fulbari through which around 30 percent of exports happen to Bangladesh are not being charged using the Suvidha app. He asks is it because the same part is used by Nepalese trucks and they do not want to charge the Nepalese trucks.

Tshering who is very frustrated said that the fees could be because people at the local or state level are getting jealous of the increasing exports of Bhutan to Bangladesh and hence want to hamper it.

He said that due to friendly ties Bangladesh in its trade agreement with Bhutan has given 16 more items to export, but this would all be useless if the issue cannot be resolved.

He said the government should admit if they cannot do anything as there is no point keeping exporters and farmers in the dark, and so the Bhutan-Bangladesh trade will come to an end.

While the Suvidha app is very much a decision of the state government the app website claims that ‘the portal has been created as an initiative of Government of West Bengal in coordination with Land Ports Authority of India, Indian Customs (CBIC), and Border Security Force (BSF) for quick clearance and smooth movement of Vehicles at various ICPs of West Bengal.’

The Land Ports Authority, CBIC and BSF are all central government agencies.

The website lists a single mobile number to contact it, but it was switched off when the reporter called it on Friday afternoon.

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