Procedure for Export via Land Customs Stations to Nepal, Bangladesh & Bhutan

Customs Procedure for Export of Cargo in Containers and Closed bodied Trucks from ICDs/CFSs through Land Customs Stations (LCSs) for Export to Nepal, Bangladesh, Bhutan Adoption of ECTS Seal.

Electronic Cargo Tracking System (ECTS) that enables real-time monitoring of goods in transit is proposed to be introduced for land route Exports to neighbor countries like Nepal & Bangladesh. This has been observed to be a much more efficient e-solution in terms of cost and time since it uses superior technology to provide cargo visibility for real-time monitoring of transit goods.

Globally, transit trade is an important element in the economic movement. The transit trucks / containers are considered as one of the most dangerous means of smuggling inside any country. So, truck / container monitoring has become inevitable for government in any country. ECTS – an advanced technology employs to facilitate better reporting on movement of Inter-Country Transit truck / container in the country and very popular in land locked / transit countries. Even countries like Uganda, Kenya, Zimbabwe, and Tanzania are also adopted the system.

How does ECTS work?

• ECTS uses GPS (Global Positioning System; provides co-ordinates to give cargo location on the map),GPRS(General Packet Radio Service; GSM data system for sending data to the server) & RFiD(Radio Frequency iDentity; provides the security of cargo), an effective tracking technology.
• Targeted units, box body trucks and containers ferrying transit goods are fitted with a tracking device which sends the seal status, truck location and any violation information on real time basis
• Once the seal is activated, cargo is monitored from start to destination
• The truck / container is expected to move along gazetted geo-fenced routes
• Everything that happens to the cargo is recorded and reported simultaneously with every incident being time stamped together with the location of occurrence
• Any violation of tampering with the seal is detected and reported immediately and alerts are sent both via e-mail and SMS to pre- defined persons

What are the benefits of ECTS?

• There is reduced cost of doing business- Transit time shall be reduced- Real time monitoring has left no room for time wastage on transit routes- Reduces transit monitoring operations costs
• Real-time Monitoring of Transit Cargo – Ensure Safe and secure arrival of the goods to their destination
• Expected to reduce high Demurrage and Detention charges
• The transporters, clearing and freight forwarders have an opportunity to efficiently monitor their respective businesses in the logistics supply chain
• Ability to see the location of their trucks all the time using their mobile devices
• ECTS provides a system report as evidence of arrival at destination
• Transporters can monitor the effectiveness of their drivers i.e. speed, location of parking, diversion from agreed routes
• Increased turnover due to reduced customs physical controls, hence more income Increases the efficiency of cargo handling procedures.
• Increases cargo through put by eliminating physical escorts for transit goods.
• Detection of any Pilferage of Cargo or Dumping of Smuggled goods – To put an end to the many high risks encountered in escorting transit cargo

Back-Ground Behind the Move :

Earlier, the Board had issued Circular 18/2002-Cus dated 13th March 2002 as amended by Circular 61/2003 dated 18th July 2003 with a view to decongest border points, minimize interventions at the border and provide speedier clearance to exports to neighboring countries. The references received have highlighted the need to revamp the procedures for providing improved clarity, taking into account EDI facilities, and ensuring uniformity in implementation by commissionerates.

India-Nepal MOI :

A Memorandum of Intent (MOI) on India-Nepal Electronic Cargo Tracking System (ECTS) Pilot Run was signed by the Governments of India and Nepal to facilitate movement of traffic-in-transit belonging to Nepal from the port of arrival in India to Nepal. The India-Nepal ECTS system pilot project aims to demonstrate the benefits, especially in terms of reduced costs and time as it speeds up cargo clearance at border crossings.

The pilot project will be supported by the Asian Development Bank (ADB) under the South Asia Sub regional Economic Cooperation (SASEC) Trade Facilitation Strategic Framework, and its success will serve as the basis for its use in other SASEC corridors as well as in inland movement of cargo.

Currently clearance is done through physical inspection and it is time-consuming as well as costly for business. Electronic Cargo Tracking System uses technology such as satellite positioning systems, cellular communications, radio frequency (RF) identification, web-based software and others, to ensure the security of cargo and avoid any interference in transit.

ECTS pilots have already been done along the Kolkata- Jaigaon- Phuentsholing route between India and Bhutan, and for inland transshipment in India. The ECTS will control the turnaround time of the shipping line containers and is expected to reduce the high demurrage and detention charges being incurred by the Nepali importers due to delay in returning the containers to the shipping lines. Shipping liners normally provide 21-day turnaround period, which means that the Nepal-bound cargo containers that leave the Kolkata port must be returned to the shipping liners within 21 days after unloading the goods in Nepal. However, traders are often slapped demurrage charges as they miss the deadline of the shipping liners due to delay from Indian Railway, congestion in dry port, among other reasons.

To end this perennial problem, the Ministry of Commerce (MoC) is going to introduce ECTS, which will monitor the Nepal-bound cargo containers.

Traders would have to pay for $45 per container to obtain this service and those willing to take this service would have to inform the Kolkata customs during the Customs Transit Declaration at the port customs office. The port customs places additional locks on Nepal-bound cargoes to ensure that the goods imported for Nepal are not sold in India. However, the port will not place additional lock on those cargo containers that take ECTS service. Moreover, the provision requiring purchase of additional insurance in India on import of sensitive goods will not be compulsory thereafter and expected that the cost and time of international trade will be minimised once the system comes into implementation in full-fledged manner.

The Kolkata port customs, consul general of Nepal in Kolkata and the border customs points of India and Nepal would be able to simultaneously monitor the containers in which the electronic device are installed.

After this system comes into force, the Indian government will also allow the movement of Nepal-bound cargoes to the nearest rail head at Jogbani. Nepal has also proposed allowing ferry of Nepal-bound cargo via rail to Nautanwa (nearest rail head from Bhairahawa). Currently, Indian Railway can ferry Nepal-bound cargoes via rail to the only rail linked Inland Clearance Depot (ICD), Birgunj. After enforcement of the ECTS, Nepal-bound containerised cargoes can be ferried to Jogbani from Kolkata and then to Nepal via road, which will lower the transportation cost because rail transportation cost is cheaper.

The Board has also taken into consideration the upcoming bi-lateral project being implemented under the auspices of the Asian Development Bank, pursuant to the Memorandum of Intent signed between India & Nepal dated 6th June 2017. Under the project, transit cargo from Kolkata to Nepal and vice versa shall be transported under Electronic Cargo Tracking System (ECTS). As a part of the project, facilities for locking / unlocking ECTS seals will be provided at Kolkata Port and at the border points of Raxaul, Jogbani and Sunauli. Commissioner of Customs, Kolkata (Port) shall be issuing a public notice regarding the procedures to be followed for ECTS services w.e.f. 1st February 2018.

India – Bangladesh bi-lateral Discussions

During the course of review of the subject circular, cognizance has also been taken of the Note Verbale from the High Commission of Bangladesh in India as well as bi-lateral discussions during the Joint Group of Customs meeting in Dhaka on 23rd – 24th August 2017 seeking that India operationalize cross border trade by road through Gede LCS as a means of decongesting Petrapole border and providing speedier clearance.

Board’s Decision to Leverage the Introduction of this New Technology : Circular No. 52/2017- Customs dated 22nd December, 2017

Now, the Board has decided to leverage the introduction of this new technology being provided under “Managed Service Provider” system to monitor and facilitate transshipment of consignments sealed at ICDs/CFSs and destined for export to Nepal or Bangladesh. Exporters opting to avail the facility for export of goods to Bangladesh or Nepal may do so through the following ICDs / CFSs:

Electronic Cargo Tracking System (ECTS) Operating Procedure

The exporters will be required to bring goods meant for export to the designated ICD/CFSs, and file a Shipping Bill on EDI. The Shipping Bill shall be assessed as per EDI/RMS procedures. Three copies of the Shipping Bill shall be printed (including one transference copy). The original of the Shipping Bill shall be retained by the ICD while one copy (transference copy) shall be carried with the cargo by the driver in a sealed envelope to the LCS of exit. The goods to be exported shall be stuffed in a closed body truck or container, as is convenient to the exporter, and sealed with ECTS seal. The ECTS seal number shall be recorded in all the copies of Shipping Bill. The custodians shall be responsible for obtaining the ECTS seal from the MSP managing the transit project for Nepal cargo for this purpose.

At the LCS, the transference copy of Shipping Bill shall be submitted by the driver to the proper officer of Customs. The Customs Officer shall verify the trip report through the ECTS web application and where no alert of any unauthorized un-sealing is found, he shall record the same in the transference copy of the Shipping Bill and put his name, signature, date and retain the same at the LCS for record. The officer shall remove the ECTS e-seal and allow the movement of the container/close body truck, as the case may be, across the border for export. Simultaneously, the originating ICD/CFS shall view the same trip report on the ECTS web application and where no alert of any unauthorized un-sealing is found, he shall take a print of the same and attach it with the original Shipping Bill along with his name, signature and date.

In case the Trip Report Indicates any Unauthorized Un-sealing

In case the trip report indicates any unauthorized un-sealing, the matter shall be brought to the notice of the Deputy/Assistant Commissioner/Superintendent of Customs and such container/truck shall be subjected to 100% examination. If any deviation from the Shipping Bill or invoice is detected during examination, adjudication proceedings may be initiated. The Assistant/Deputy Commissioner of Customs at the originating ICD/CFS may take appropriate action under the Customs Act including raising a demand on the custodian, equal to the export duty, Drawback and/or any other export incentives, in respect of the export goods, in addition to any other action that is required to be taken against the exporter. The matter shall also be reported to the jurisdictional Commissioner of GST for recovery of taxes.

Based upon experience gained from the pilot project, the facility shall be expanded to all other ICDs in the bordering states of Uttar Pradesh and West Bengal and following land customs stations on a date to be specified:

India-Nepal border

(a) Nepalgunj,

(b) Panitanki.

India-Bangladesh border

(a) Ghojadanga

(b) Mahadipur

(c) Dawki

India-Bhutan

(a) Jaigaon

(b) Darranga

Circular 18/2002- Cus dated 13th March 2002 as amended by 61/2003 dated 18th July 2003 shall stand superseded with effect 1.2.2018

Comments :

Though very late to adopt such advanced technology for trade between our neighbour countries, this is a good move aiming at furtherance of trade and improve the easy of doing business and reduce cost & time with more visibility of transactions.

The facility need to spade to all other ICDs as well.