India: 30-40 pc DRI exports may be hit amid Bangla border disruption

The Petrapole-Benapole land port in West Bengal, the largest land border port with Bangladesh which accounts for over 70% of India's trade with the eastern neighbour, was at the centre of controversy last week.

'One-way trade'

Export of Indian goods through the border was disrupted on July 1 after a section of Bangladeshi exporters staged an agitation, an official of Federation of Indian Exporter Organisations (FIEO) confirmed.

India allowed export of goods from Petrapole on June 7 but has not allowed import of goods from across the border much to the annoyance of Bangladeshi exporters. The agitation was the result of this "one-way trade", alleged trade representatives in Bangladesh.

Land trade was affected during the total lockdown. It briefly resumed on April 29, but shut down again on May 2, following local protests. Trade restarted on June 7 and slowly rose to around 250 trucks per day from around 24 earlier. But it was "one-way trade".

Bilateral trade with Bangladesh dropped to USD 424 million in April-May, as compared to nearly USD 2 billion in the corresponding period last year.

Gradual resumption

Following a high-level meeting on the evening of July 5, trading activities slowly resumed with five trucks each from the two sides rolling into their destined territories, informed a senior official of a major steel company in Bangladesh.

Safety protocols are in place and goods from Bangladesh, mainly garments, jute items and perishables such as confectionary items, are either being shifted to warehouses along the border or loaded onto trucks for despatch.

A significant share of Indian exports comprise DRI, ferro alloys, refractory materials and car bodies. According to sources in the trading fraternity, DRI exports from India are in the region of 2 lakh t annually from the Petrapole-Benapole border alone.

Also, about 300-400 car chassis are exported from India on a daily basis. "Some 1000 trucks are waiting at the border since the time the lockdown was first announced. So traders can't load new material onto trucks now until such time as normal movement resumes," a trader told SteelMint.

Traders bear the brunt

Trucks were not allowed to even enter the border town of Bongaon in West Bengal and a long queue of trucks are waiting to enter Bongaon.

"During the lockdown ports were the only option for exchange of goods as the land border was sealed to prevent spread of infection," a major Indian sponge iron trader told SteelMint. "Due to disruption in land trade about 30-40% trade volume was directly affected," he informed.

As there are restrictions in Bangladesh concerning imports from the different land ports, the situation had spun out of control. For example, DRI can only be imported by Bangladesh via the Petrapole border and not other land borders such as Ghojadanga, he further informed.

This is due to infrastructural bottlenecks such as lack of logistics, godown facilities or labour shortage in many border regions of Bangladesh.

A leading steelmaker in Bangladesh informed that annual DRI imports from India is well over 1 mn t as about 15% of DRI is blended with ferrous scrap as feedstock in steel mills in the neighbouring country where rapid infrastructure growth is propelling the steel industry to newer heights.

Emerging alternative?

Meanwhile, the port authorities in Kolkata and Haldia started shipping services through inland waterways between Kolkata and Dhaka as well as Chittagong amid frequent disruptions in cross border trade through the land ports.

However, this is not a new option, confirmed a Bangladesh steel industry executive. "Earlier, sponge iron consignments from India have arrived via inland waterways," he said, adding that riverine trade ought to pick up during times of crises such as the present one.

"It could emerge as an alternative in the near future," he averred.