India-Bangladesh rail service to cut Chittagong congestion

India-Bangladesh rail service to cut Chittagong congestion

Containerized rail between the Indian port of Kolkata and the Bangladeshi city of Dhaka would provide a much-needed release valve for Chittagong congestion.

Bangladesh and India are testing a containerized rail service to help alleviate the ongoing congestion in the Chittagong port.

Textile shippers have welcomed the service, which will help to ensure steady supplies of cotton by cutting transit time drastically and halving costs. The service will take just 12 hours to get a container from the Indian port city of Kolkata to the Bangladeshi political and business capital of Dhaka, compared with 25 days for a container that is transshipped at Colombo for delivery to the port of Chittagong.

“The initiative is good. Collecting cotton will be a matter of time,” Bangladesh Textile Mills Association (BTMA) vice president Abdullah Al Mahmud said. “The service will cut carrying costs as well. It’s good news for textile sector.”

The trial run will take place next month, Habibur Rahman, a general director for Bangladesh Railway told JOC.com.

“We are planning at least one trip a week at the preliminary stage,” Rahman said, adding that the frequency will rise based on demand and a Bangladeshi train can haul 60 containers at a time.

“Since Kolkata is very close to us and takes only 12 hours to reach a train there, we will be able to give several trips in a week if needed,” he said. “The shippers are contacting and encouraging us to start the service. The merchants are very much interested to container train service.”

He said most of the garment factories in Dhaka area are located near Gazipur, so another inland container depot in that area may be needed to facilitate the movement of containers to factory gates.   

Officials at BTMA said the annual cotton demand of Bangladesh is nearly 6.7 million bales, of which 3.5 million bales come from India and with the majority by sea.

Mahmudur Rahman Sumon, managing director of Zaheen Spinning, a producer of cotton yarn, said he mainly collects cotton from India that arrives over land by truck

“I also import cotton by sea but that is very much time consuming,” he told JOC.com.

He said carrying cotton by container train will definitely be quicker than vessels and cut costs, “saving money and offering good lead time.”

Though India has offered Bangladesh duty-free and quota-free market access, Bangladesh has struggled to make use of it because garments make up roughly 80 percent of the country’s merchandise exports, according to IHS Markit. India is also a large producer of garments and textiles, so without other goods to export, Bangladesh has not been able to make many inroads to the Indian market.

Bilateral trade between Bangladesh and India is more than $6 billion and highly tilted towards New Delhi. In fiscal year 2015 to 2016 Bangladesh exported $689 million in goods to India while importing $5.5 billion.

Bangladesh mainly exports woven garments, knitwear, home textile, agri-products, frozen food, leather and leather products, footwear, raw jute, jute goods, and bicycle. Bangladesh imports mainly cotton, cotton yarn, cotton fabrics, vehicles, nuclear reactor, boilers, machinery and mechanical appliances, cereals, edible vegetables, iron, and steel.

Contact Syful Islam at syful-islam@outlook.com.