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Transporting goods by road in the SAARC region

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Cross-border trucking: India and its neighbours

The Himalaya mountains are located to the north and the Indian Ocean is a natural frontier in all the other directions: the South Asian country of India offers perfect conditions for air and ocean freight – or at least that is what you might think. It is also correct, as far as global trade is concerned. However, a different form of transport is increasingly becoming the norm when moving goods to the direct neighbouring countries of Bhutan, Nepal and Bangladesh – cross-border trucking. What makes overland truck transport services so efficient despite the huge distances involved at times?

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At a glance

  • A glimpse of India’s economic power
  • Export volumes in the BBIN region
  • Initiatives to expand infrastructure
  • Why cross-border trucking?
  • Logistical expertise for reliable transport services

India’s economy is growing all the time: the South Asian country is not only an absolute giant in terms of its population numbers and surface area. India captured sixth place in the rankings for the 20 countries with the largest gross domestic product (GDP) in 2020. Its most important business sectors include agriculture, the industrial segment – with a major focus on production and the textile industry – and the services sector. Statista expects India’s GDP to increase from USD 2,446 billion to USD 4,393 billion by 2026. This development is making India an important trading partner around the globe, particularly for the USA, the United Arab Emirates and China. However, other countries place great emphasis on close trade with India too.

An important exporter for Bhutan, Nepal and Bangladesh

India, together with seven other countries, is part of the South Asian Association for Regional Cooperation (or SAARC). This also involves Afghanistan, Bangladesh, Bhutan, Nepal, the Maldives, Pakistan and Sri Lanka. Its goal is to promote economic and technical cooperation, particularly with a view to cross-border trade and customs clearance. India is one of the most important trading partners, particularly for its direct neighbours – it is the second most important importer for Bangladesh after China, for example. According to the OEC, Indian exports to Bangladesh amounted to USD 7.91 billion in 2020. The most important goods are raw materials, textiles, chemicals, vehicles, animal feed, food and agricultural products. Exports to Nepal amounted to USD 5.85 billion; refined petroleum accounts for almost 14 per cent of this figure. Vehicles, food and electronic white goods are other important export items. Conversely, India is the most important export destination for Nepal and accounts for almost 70 per cent of its total exports. About 23 per cent of Nepal’s exports to India involve soybean oil. Bhutan also exports goods almost exclusively to India and these mainly include iron alloys, iron semi-finished products and minerals. The Kingdom, in turn, imports items such as crude oil, iron reduction products, charcoal and vehicles from India and the total value of imports in 2020 was USD 623 million.

Economic initiatives strengthen trade in South Asia

One of the major endeavours being pursued by the countries of Bangladesh, Bhutan, India and Nepal, which jointly make up the so-called BBIN region, is to strengthen their infrastructure. The SASEC Road Connectivity Project is one of the latest developments and it is designed to strengthen trade and the economy via a road network. It will improve the subregion’s connectivity by linking India with Nepal and Bhutan via Bangladesh. Any expansion of the infrastructure pays off: as Nepal and Bhutan are land-locked countries, it is only possible to reach them by air or road. At first glance, transporting goods by air seems to be the ideal solution. After all, it is the quickest form of transport and the distances for consignments from Indian cities such as Mumbai and Chennai are still enormous – even if they are neighbouring countries. However, road transport services using trucks makes more economic sense – and there are many reasons for this.

Cross-border trucking as the most efficient means of transport

Cross-border road transport services by truck are also known as cross-border trucking. It outstrips other means of transport because there are fewer restrictions on the different types of cargo that can be carried. Dangerous goods and large-scale items do not pose a problem. When compared with air and ocean transport services, less effort is required in terms of documentation, certification and customs clearance as well. However, the freight costs and the transit times are the pivotal issues for ensuring that cross-border trucking is the most efficient solution within the BBIN region: the overland route from India to Nepal and Bhutan takes between five and eleven days, depending on whether the transport service sets off from Mumbai, Delhi or Chennai. It only takes two days by air, but the cost is on average 22 times higher than for consignments transported by truck.

Airfreight from India to Bangladesh is subject to similar times and costs. Since it is a neighbouring country with a maritime coastline, ocean freight might be an alternative to air cargo. However, goods take about 15 – 20 days to reach their destination port using this means of transport. Cross-border trucking is also an impressive alternative in comparison as it provides much greater availability, both in terms of vehicles and in terms of containers. The transit time is also more dependable as it is possible to offer door-to-door services. These benefits and Bangladesh’s geographical location, which is surrounded by land on three sides – mainly by India – despite its coastline, make road traffic an essential element in logistics and transporting goods between the two countries.

Professional handling by logistics specialists

A reliable logistics specialist is absolutely essential to ensure that transporting freight by cross-border trucking is a success story. A well-developed network in the countries enables customers to deliver consignments to Bangladesh, Nepal and Bhutan by road within very short lead times. Branches all over India with direct road connections guarantee transport services that do not require any transshipment – that is to say, the cargo does not have to be handled more than once.

„Our major focus is on providing services to customers with value added, such as direct deliveries and rapid customs clearance. This is possible if you have an experienced team on both sides, which is able to provide tailor-made solutions for specific requirements.“
Ishan Varshney | Manager – Domestic Freight
Rhenus Logistics India P. Limited

Having a real-time overview via GPS and CCTV guarantees the safety of the freight and enables customers to enjoy end-to-end tracking for their consignment. Professional cargo handling using straps and airbags safeguards the goods in transit. Smart locks prevent theft if high-value cargo is involved. The service provider should also have the necessary expertise for handling customs clearance. This includes completing all the formalities, such as preparing the customs papers and the certificates of origin as well as EDI registration for the recipient with the Indian customs authority. Companies can then guarantee that their deliveries from India to Nepal, Bhutan and Bangladesh are completed smoothly and on time.

Would you like more information?

Are you planning to export goods from India to Bhutan, Nepal or Bangladesh? This takes you to our checklist that includes important stipulations and measures.

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Rhenus India offers tailor-made and seamless logistics solutions to SAARC countries.

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