The Customs Yard at the Biratnagar-Jogbani Integrated Check Post (ICP) has not received a single cargo train from India in the 19 months since the railway’s inauguration, as traders continue to prefer the Indian customs yard at Jogbani due to lower costs.
Despite its grand inauguration, Nepal’s ICP has remained inactive since the first and only cargo train arrived on June 1, 2023, following a ceremonial flag-off during then-Prime Minister Pushpa Kamal Dahal's visit to India.
The facility’s prolonged underuse for cargo imports has raised concerns over its economic viability.
Trans Nepal Freight Services, which operates the yard, cites high cargo handling charges and restrictions on imports—limited to cement, coal, clinker, and fertilizers—as the key reasons for traders avoiding the facility. Laxmi Subba, Manager at ICP Biratnagar, stated that these factors make Jogbani Customs in India a more attractive option.
A study by the Chamber of Industries Morang found that transporting goods via the Indian customs yard saves traders between Rs 64 to Rs 200 per tonne. According to Chudamani Bhattarai, Director General at the Chamber’s Secretariat, Nepal’s higher transport rates and cargo handling charges have further discouraged businesses from using its own customs yard.
The cost disparity is evident in cargo transport expenses. For instance, a single boxcar carrying 2,500 tonnes of sponge iron incurs an additional Rs 160,000 in costs when transported via Nepal’s ICP. Similarly, for Galvanized Iron (GI) wire production, the Mild Steel (MS) wire rod—a key raw material—costs Rs 472 per tonne when transported via Jogbani Customs but Rs 640 per tonne through Nepal’s ICP. Importers like Sourav Sharda, Director of Sharda Group, have expressed similar concerns, stating that transporting 2,500 tonnes of Hot Rolled (HR) sheets through Indian customs saves Rs 430,000. "Why would anyone choose the more expensive option?" Sharda questioned.
Business leaders believe that making the yard cost-competitive could change the situation.
Rajendra Raut, President of Koshi Province Chapter of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), emphasized that if goods were transported through Nepal’s customs yard, loading and unloading costs could be adjusted, transport costs would decrease, and Nepali consumers would benefit from lower prices for finished goods.
Infrastructure development at the ICP is ongoing despite the operational setbacks. A public hearing on the Environmental Impact Assessment was conducted on January 3, 2025. Additionally, a 4.4-kilometer road from Hanuman Chowk to the ICP is set to be expanded to four lanes. The ICP area in Biratnagar Metropolitan City-18 will also feature a 42,040 square meter parking yard, a 200 square meter inspection shed, and a 2,000 square meter warehouse.
Meanwhile, the plan to extend the railway track 18 kilometers inside Nepal to Katahari, with Rs 4 billion in financial assistance from India, remains stalled due to unresolved land compensation disputes.
Business leaders argue that government intervention is crucial to resolving the cost disparities.
Amit Sharda, an executive member of the Morang Merchants’ Association, stated that while India and Nepal can resolve this issue, inaction from authorities has deprived Nepal’s private sector of economic benefits.
Without cost adjustments and necessary policy changes, traders are unlikely to shift from Indian facilities, leaving Nepal’s trade infrastructure underutilized.
