It is an opportune time in the history of both Nepal and India that the two countries have strong governments and both remain committed to widening and deepening cooperation in multiple areas for mutual benefit. In both countries, economic growth rates are in upward trends; development and prosperity have become national agenda; and development drives are delivering results. We need to fully tap this opportunity for mutual benefit.
Inaugural Address by
Rt. Hon. Prime Minister Mr. K P Sharma Oli
at the First Nepal-India Logistics Summit organized by
Federation of Nepalese Chambers of Commerce and
Industries (FNCCI) and Maritime Gateway
(28 July 2019, Kathmandu)
________________________________________
President of the Federation of Nepalese Chambers of
Commerce and Industries,
Representatives of Maritime Gateway and
Nepal Freight Forwarders Association,
Distinguished delegates,
Ladies and Gentlemen:
First of all, I would like to express my sincere thanks to the Federation of Nepalese Chambers of Commerce and Industries and Maritime Gateway for hosting this first ever Nepal-India Logistics Summit in Kathmandu in association with Nepal Freight Forwarders Association.
I am delighted to speak a few words on this important theme of “Transforming Logistics Landscape”. The theme of the summit bears great relevance in the context that Nepal and India have a significant volume of trade, investment, tourism and people to-people movement for which smooth and quality logistics, including easy transit facilities, is quintessential.
It is the smart logistics that plays a crucial role in making trade and transit arrangements easy, hassle-free and cost effective.
Distinguished Delegates,
Nepal and India share age-old multifaceted ties. Our relations are taking new heights, especially in the changed political and economic milieu. Our two countries are not only immediate neighbours but also close friends. As two independent and sovereign countries, Nepal and India are bound to interact and engage more and more, both at the level of government and people, based on sovereign equality, mutual trust, respect and cooperation.
In short, we are good neighbours, and we should be good neighbour!
India is Nepal’s largest trade partner, both in terms of export and import. However, Nepal’s trade deficit with India is very high. Import and export data of the last fiscal year show export worth of Nepali Rupees 48.45 billion and import 863.20 billion, with a deficit of 814.75 billion for Nepal. Such a scenario of trade between the two close neighbours does not depict an ideal trade relationship. We need to rectify this situation as early as possible.
Trade is an engine of growth. Without trade, a country cannot develop and prosper. So, trade remains at the core of country’s external engagement.
While market access of Nepali products to India remains a crucial issue, we have to think in the larger perspective of enhancing Nepal’s overall production capacity. This cannot be done without investment.
We invite Indian and other investors to take advantage of Nepal’s liberal and attractive investment regime. We allow investment in almost all sectors with a very short negative list.
However, investment does not come automatically.
Cognizant of this fact, the Government of Nepal has taken a number of policy, legal, institutional and administrative measures to improve the investment climate in the country.
The enactment of a comprehensive Foreign Investment and Technology Transfer Act, the Public Private Partnership and Investment Act and the establishment of One Stop Service Centre are some of the far reaching initiatives taken by the Government to attract investment.
These developments have started to show positive outcome.
The Investment Summit earlier in March witnessed a record number of interested investors looking for business opportunities in Nepal.
We are not confined to these initiatives alone. Our reform process will continue with even greater zeal and speed.
We will be enacting soon Industrial Enterprises Act and Intellectual Property Act to further improve investment climate in the country. We will also intensify negotiations on the agreement on the avoidance of double taxation with interested countries and on concluding bilateral investment treaty.
The most important thing is policy stability and consistency that has come with political stability and a stable government.
Uncertainty and confusions that characterized our business environment in the past have now been replaced by certainty and clarity.
We have development-oriented and business-friendly government whose sole motto is to promote faster economic growth and achieve prosperity for the people of Nepal by taking the private sector on board.
Economic transformation is our topmost agenda. ‘Prosperous Nepal, Happy Nepali’ is our national aspiration and we believe that this is achievable within a reasonable period of time.
In the development journey, our immediate goal is to graduate from LDC status and, the medium term goal is to achieve the status of middle income country by 2030 together with the realization of SDGs.
Despite various odds, we have been able to register over 7 percent economic growth in the country. Inflation rate is under control and other macro-economic fundamentals remain sound.
Industrial relations have improved with labour market flexibility and the implementation of social security. Huge demographic dividend and abundant natural resources offer promising environment for rapid and sustainable development in our country.
What does it mean for us?
This means that Nepal is ready for business and welcomes your participation.
This also means that Nepal stands as one of the most attractive lands for investment.
I sincerely appeal to you all to seize the opportunity and invest in Nepal.
Investment is not confined to a handful of areas.
Opportunities are vast and attractive. Hydropower, agriculture, tourism, IT, manufacturing, mines and minerals, physical infrastructure and social sectors are some of the sectors where investment is highly profitable.
Dear Friends,
When we talk about logistics available in our two countries, what I find is that the existing transport infrastructure, communication links, trade facilitation measures, transit routes and facilities, and customs clearance procedures are in need of improvement if they are to reach the global standards.
Some improvements have been made. But that is not enough. Much more is yet to be done.
Needless to say how critical it is for a landlocked country like Nepal to be connected in neighbourhood, in the region and with the rest of the world.
Despite improvements made over the years, Nepal is still bearing the brunt of high logistic cost in the transit transport of goods, both export and import.
Nepal cannot afford this.
Only way to reduce this high cost is to upgrade and streamline connectivity means, both hard connectivity of infrastructure, and soft connectivity in terms of administrative procedures.
Connectivity remains a topmost agenda in our bilateral cooperation framework.
You may recall, when I met Prime Minister Modiji in April 2018 in New Delhi, we inaugurated the crucial Integrated Check Post at Birgunj and witnessed the ground-breaking ceremony of the Motihari-Amlekhgunj cross-border petroleum pipeline, which is going to be operationalized soon.
In the same meeting, we also agreed to take the new initiatives namely, connecting Kathmandu with the border city of Raxaul by railway line; and developing inland waterways through rivers from Nepal to India.
We have witnessed progress on these crucial components of connectivity. Preliminary study on railway connection has been done and the next step would be to prepare a DPR. Other ongoing railway projects are nearing completion and some of them are ready for operation.
I am happy that my vision for inland waterways is being translated into reality.
There exists an organic linkage between the mighty Himalayas and the vast oceans in ecological terms. By promoting waterways, we would be building economic and commercial linkages between them. The whole idea is to greatly facilitate the movement of goods, services and people and promote overall connectivity.
A Shipping Office has already been established in Nepal. Technical experts from both sides have been studying other details for making waterways operational in the rivers of Nepal and India at the earliest possible time.
It will be a game changer in our transport transit system. It will not only reduce cost of transit transport but also diversify transit transport options. It will benefit both of our countries.
This is the kind of innovation and dynamism we want to inject into our cooperative partnership.
Dear Friends,
Since we are discussing the ways to improve logistics conditions, let me quickly make the following observations.
Road connection between Nepal and India is much better today as compared to the situation some years back.
Thanks to the massive infrastructure drive in India in the past few years, roads in northern Indian states of Bihar and Uttar Pradesh are being upgraded.
Roads have been widened on our side also. Travel time of cargo trucks has been cut short.
However, severe bottlenecks still exist when it comes to the quality of roads connecting north India’s national/state highways to key points at Nepal-India border.
Cargo trucks still queue for hours and creep on these poor stretches.
Gorakhpur-Sunauli road stretch is far better today so is Lucknow-Nepalgunj stretch. We will have to work soon on a new road connection of Nepal’s far west province with nearby Indian national highways, as we build a four-lane motorable bridge over Mahakali river, linked to our East-West highway.
Bilateral motor vehicle agreement of 2014 is in operation. It has the potential to facilitate movement of people across the border in a smooth manner. However, we should have a reciprocal arrangement of granting permission at border points.
In view of the changing dynamics of trade and transit, we have initiated review of both transit treaty and railway service agreement.
Further simplification of transit process would bring positive impact on economic growth and development of Nepal.
Transhipment of consignment up to land ports in Nepal; full implementation of electronic cargo tracking system; diversification of railway points in Nepal; operationalization of soon-to-start Nepal railway for transit transport; and access to new ports in India (we have requested the Government of India to provide Dhamra, Orrisa and Mundra, Gujrat ports) are some of the key issues requiring thoughtful consideration by the Government of India. We are hopeful that these will be realized soon. Nepal, on its part, is ready to take the needful action.
On infrastructure side, it will be ideal to have dedicated freight corridor between ports in India and land ports in Nepal, both dedicated, uninterrupted rail and road corridors.
On administrative aspect, it would be easier for traders if the operation hours of customs on both sides would be extended.
Dear Friends,
Going beyond the bilateral arrangements, we must also think how can we tap the sub-regional and regional potentials for enhancing connectivity.
Bangladesh Government has permitted Nepal to use the facilities at Mongla Port since September 1997, following the opening of Kakarbjitta-Phulbari-Banglabundh transit route. It has also permitted additional rail corridor to Nepal via Rohanpur-Singhabad for transit. However, these transit facilities with and through Bangladesh for Nepal’s international trade are yet to be operationalized.
I am of the view that trilateral transit arrangements involving Nepal-India and Bangladesh will change the logistics landscape of our sub-region. We can explore the possibilities of utilizing inland waterways in this sub region going beyond the road and rail networks.
BBIN framework also offers an opportunity to improve connectivity and logistics arrangements. Pending works should be expedited to advance meaningful cooperation under this framework.
Both SAARC and BIMSTEC have important connectivity agenda under their respective regional cooperation frameworks. Realizing regional potentials of connectivity will help transform regional development landscape. Deeper integration in core areas including connectivity must receive our priority.
Dear Friends,
While physical connectivity in terms of road, railways and water ways is always important, we must also think of enhancing connectivity in terms cross-border electricity and air connectivity to promote trade and investment.
The bilateral Power Trade Agreement of 2014 was a milestone, paving the way for market access for independent developers and traders to trade electricity in the vast Indian market. The Government of India has taken important steps for the operationalization of the Agreement including through the issuance of Revised Guidelines on cross border trade of power and procedures of business.
Our desire has been that unhindered power trade be made possible at least among the BBIN Countries.
Transmission infrastructure is the highway for electricity trade. The crucial 400 KV Dhalkebar-Muzaffarpur cross-border transmission line is in operation, enabling the supply of electricity. Several smaller radial mode cross border transmission lines are also in operation. Joint Technical Team has done the mapping of need of cross border transmission lines at 7 different cross border points in view of the hydel projects that are in pipeline in Nepal. The new Butwal-Gorakhpur cross border transmission line is our immediate priority.
The energy banking System has already been in operation and Nepal has already started to supply wet season surplus electricity to India.
Air connectivity plays an important role in promoting trade, investment, tourism and people-to-people contacts.
Kathmandu is connected with India’s five major cities. As we are adding two regional international airports as well as upgrading the existing ones and in view of the increased travel and tourism between our two countries, there is scope for more air linkages between the major cities of Nepal and India.
Nepal has requested the Government of India for four additional air entry routes to ease air traffic congestions. We are hopeful that this will be realized soon.
Distinguished Delegates,
Our logistics sector faces numerous challenges. Ensuring international standards is a big task. How to expand connectivity in roads and railways and improve quality is a relevant question, as it requires lots of work in legal and infrastructural sides, incurring financial costs as well.
Adaptation to a new technology for automation and digitization is another work deemed essential. If we want to improve the logistics for efficient trade and transit, we have to go ahead with it without further delay.
At a time when we are having a logistics summit here, it is appropriate that we come up with a realistic plan as to how the logistics could be improved to the best level possible.
I have some suggestions to make:
To begin with, works relating to upgrading of infrastructure of roads and railways must be accorded high priority, as connectivity is the lifeline of business, trade, investment and peoples' movement.
Reform in customs and administrative procedures is a must in order to facilitate smooth and fast movement of cargo. Hassles at ports and border points, and in between them, need to be totally eliminated.
Bilateral treaties on trade and transit should be timely revised to accommodate required changes in this sector. Laws of both countries also need to be adjusted to allow improvement in the logistics.
Delivery of cargo from ships at Kolkata and other Ports directly to Nepal-bound trucks can phenomenally help reduce congestion in the port, cost of transportation and saving of time.
Similarly, use of modern technology for automation and digitization is equally important, as it will make trade, transit, connectivity, and movement of peoples smooth, less costly and time-saving.
Both countries should establish efficient testing facilities for their export products close to their borders along with smart certification services to ensure the delivery of qualitative and hygienic products.
Besides, there is a need to connect new markets with products of global preferences in order to maximize benefits, availing the improved logistics.
Finally, trade between the two countries must be balanced with a win-win situation for both of them.
Ladies and Gentlemen,
I am confident that we can move forward with dedicated efforts in these areas. Both the public and private sectors of the two countries must work hand-in-hand for this purpose.
It is an opportune time in the history of both Nepal and India that the two countries have strong governments and both remain committed to widening and deepening cooperation in multiple areas for mutual benefit. In both countries, economic growth rates are in upward trends; development and prosperity have become national agenda; and development drives are delivering results. We need to fully tap this opportunity for mutual benefit.
With these words, I would like to conclude my statement here. I hope this summit will come up with important outcomes for enhancing our logistics sector, thereby making trade, transit and connectivity between Nepal and India smooth, efficient and effective.
I wish the summit all success!
Thank you for your kind attention.
Kathmandu, July 28, 2019
