Bihar's First-Ever Dry Port Sends Leather To Russia, Opening Doors To Global Trade Near Patna

Bihar made history on Monday (21 October) with the inauguration of its first-ever dry port at Bihta, near Patna.

Inaugurated by Industries Minister Nitish Mishra, the dry port’s first export — a consignment of leather shoes to Russia — is being seen as the state’s big initiative in expanding its global trade footprint.

A dry port is essentially an inland facility that handles cargo, usually connected to a seaport by rail or road. It plays a key role in international trade by offering storage, inspections, and customs clearance, all under one roof.

Inland ontainer depots (ICDs) and ontainer freight stations (CFSs) are two common types of dry ports that streamline the export-import process.

Currently, most CFSs are situated within 50 kilometres (km) of ports, primarily in western and southern India, while ICDs are concentrated in the northern hinterland. In the eastern part, except for West Bengal, the population of ICDs/CFSs is sparse.

Access to ports is crucial for any state engaged in international trade, as landlocked regions often bear the disadvantage of higher trade costs and limited access to direct maritime transit routes.

For Bihar, being landlocked poses a distinct challenge, as the nearest seaport in West Bengal lies at a considerable distance.

Currently, Bihar's exports rely on ports located in other states, such as Haldia in West Bengal, Visakhapatnam in Andhra Pradesh, Nhava Sheva in Maharashtra, and Mundra in Gujarat.

The inaugural dry port at Bihta is set to transform this situation by enabling micro, small, and medium enterprise (MSME) units to book consignments directly from this facility and offering customs clearance locally.

As Minister Mishra remarked, "With customs clearance now available in Bihta, exporters in Bihar will be able to establish themselves in the global markets and participate competitively."

On The Offer

The Bihta dry port, sprawling across seven acres, is a public-private partnership (PPP) venture operated by Pristine Magadh Infrastructure Private Limited in partnership with the state's industry department.

It has been approved as an inland container depot by the Department of Revenue, Ministry of Finance.

Under the state’s export policy, MSME units booking through this ICD will benefit from a 1 per cent 'free on board' value as export subsidy, designed to enhance local businesses’ competitiveness in global markets.

In fiscal year (FY) 2022-23, Bihar's exports totalled Rs 20,000 crore, predominantly facilitated by external ports. The new ICD will help retain and enhance these figures, directly contributing to the state's economy.

Tapping Into Global Markets

Despite accounting for nearly 2.8 per cent of the nation’s gross domestic product (GDP), Bihar currently languishes at a miniscule 0.05 per cent of India’s merchandise exports.

However, the state has a unique locational advantage owing to its proximity to markets of South Asian and Southeast Asian countries such as Bangladesh, Myanmar, Bhutan, Nepal, and others.

It is also well connected to the rest of India and international markets through projects such as the SAARC Corridor, Amritsar Kolkata Industrial Corridor, and Eastern Dedicated Freight Corridor, placing it in a strong position to expand trade.

Traditionally known for agro-based exports, Bihar is now focusing on other traditional sectors such as handicrafts, handlooms, textiles, leather, and processed food products to enhance its export potential.

Recent investments in leather manufacturing further signal a shift towards higher-value exports, with Mishra noting, “Leather and garment have vast export potential in the state. We are increasing our land bank to encourage more and more investments.”

The Bihta ICD is just one of Bihar’s initiatives to improve export competitiveness. Earlier this year, the central government approved the development of two special economic zones (SEZs) in industrial areas of Kumarbagh (West Champaran district) and Nawanagar (Buxar district).

Unlike neighbouring Jharkhand, which has two approved SEZs, including the Rs 14,000-crore Adani Power project, Bihar currently has none, making these new SEZs a vital step towards levelling the playing field.

Additionally, the state government in March this year approved the Bihar Export Promotion Policy 2024 for goods manufactured in the state. The policy provides for an export subsidy to bear the cost of moving goods to the nearest port and a performance-based incentive for businesses achieving more than 50 per cent year-over-year export growth.

For India's third-most populous state, which has been reeling under geographic constraints and negative perception, the opening of the first ICD is a signal that it is at the stage of coming out of its teething problems.

Whether this will propel Bihar towards its ambitious target of entering into the top 10 industrialised states in the next three years and progressing to the top five in as many years remains a question only time can answer.