Border trade between India and China which was a thriving business in places like Kalimpong and Gangtok was suspended after 1956 following worsening of relations between the two countries, culminating in the border war of 1962
Amalendu Kundu from Gangtok
Eleven years after the beginning of India-China border trade through Nathula Pass in Sikkim, the main objective behind the opening of the trade route seems to have been defeated.
The Union Commerce Ministry in 2006 had declared that trade through Nathula was only a border trade for the benefit of a border state like Sikkim, not a full-fledged international trade. Accordingly, only items produced in Sikkim could be exported to China through Nathula.
But the Central policy seems to have been diluted gradually. In complete violation of the policy, now the items being sent to China are coming from all over the country. Exporters are avoiding the payment of government dues like VAT, excise duty, customs duty and sales tax. In the process, a small state like Sikkim is being denied its share of revenues and duties.
Border trade between India and China which was a thriving business in places like Kalimpong and Gangtok was suspended after 1956 following worsening of relations between the two countries, culminating in the border war of 1962. Trading between Sikkim and the Tibet Autonomous Region of China resumed in 2006. Initially the volumes were low, but thanks to the porous nature of the border in the past three years, 2014 and 2016, the volume of export, including legal and illegal trade, has jumped manifolds.
Figures available till 2012 show that there is rapid increase in export to China of items coming from different parts of the country. This violates the Central rule that only items manufactured in Sikkim could go. Under the terms of an agreement between India and China on border trade, 14 items can be exported from China to India and 29 items can be exported from India to China.
The Sikkim industry department has said in a Press release that the India-China border trade through Nathula provides a platform to introduce the state of Sikkim and its people to the world through the electronic and the print media. The importance of the Nathula border has incresed since the reopening of border trade with the Tibet Autonomous Region of China.
Border trade between the two countries was started more than a decade ago through Sipkila in Himachal Pradesh and Ganju in Uttaranchal with the same listed items as approved for the Nathula border trade, the release said. The decision of the authorities to open the border was to promote economic prosperity and people-to-people contact on either side of the border. It was a unique experiment that recreated history.
A senior Sikkim Government officer said that the border trade had, however, turned into only of ornamental value to the state as the state exchequer was not getting any revenue. “No profit has come to us. On the other hand, we are losing out on VAT, sales tax, excise and customs duty.” As such, no local product from Sikkim was being exported and the list of Chinese items being allowed for export is an obsolete one.
Taking advantage of the duty-free regime of the border trade, items manufactured in different parts of India are being sent to China through Nathula and a host of Chinese manufactured products are entering India. A section of customs and excise officials at the border close their eyes as trucks laden with unapproved items cross the Nathula border.
Kailash Agarwal, General Secretary, Sikkim Chamber of Commerce feels the two countries need to take a relook at the whole situation. Criticising the Nathula trade police of the Indian government, he said that products from eight to 10 states, Kerala, Andhra Pradesh, Uttar Pradesh, Punjab, Bihar, Maharashtra and Himachal Pradesh destinations like Simla and Dharamsala are being exported through Nathula. He feels there should be more vigilance on trucks which are coming from outside Sikkim. China needs for Tibet regular supply of food and grocery items to feed the people of Tibet Autonomous Region. The distance from Lhasa to Beijing is over 1,200 kms. These items, as well as unapproved ones, are going through Nathula to Tibet.
Traders from China are bringing to the Sherathang trade mart products like jacket, carpet, blanket, crockery; but along with them unlisted items like gold, mobile phones, and electronics goods. These are flooding the markets of Gangtok. The customs department has recently seized 5 kgs of gold and is trying to stop the import of items like mobile phones and the massive export from India of sandalwood.
Nor has the border trade helped the local people much. Only 300 local traders, especially Bhutias and Tibetians have shown their interest in the border trade. Only one Bihari from Sikkim Anil Gupta and his family members are engaged in the trade. The Agarwal family is exporting rice, basmati rice and other food items. The Sikkim Traders Association had benefitted from the sale of Chinese products like woollen goods, crockery, dolls and carpets.
Kailash Agarwal said recently, “The Centre has increased the daily limit of purchases from Rs 1 lakh to Rs 2 lakh for an Indian trader but the entry of illegal items must be chekced at Rangpo checkpost on way to Gangtok.’ The Sikkim Chamber of Commerce has
suggested that a high power committee be set up at the state level for upgradation of items of trade. People of Sikkim should be included in this committee, with representatives of traders, transporters, producers,
commerce association, the small and micro sector and banks.
He also said, “By next year the facility of money exchange should be started strictly in Stherethang trade Mart near Nathula by the State Bank of India. Exchanges should be in dollars and not in rupees. Even Chinese traders should bring dollars.” The trading stopped on November 30 and resumed in May 2017.
Figures for trading in the past 11 years show that while in 2006 the exports from India were Rs 27.89 lakh and the imports from China Rs 6.83 lakh, in 2010 the exports had crossed Rs 4.02 crore, import from China was zero. In 2011, the export was 3.7 crore and the import was again zero. In 2012, the export was about Rs 6 crore and the import was Rs 1.01 crore. But in 2014, the exports from India increased sharply to Rs 16. 43 crore while the imports from China were worth over Rs 1 crore. In 2015, the exports from India increased manifolds to Rs 60 crore while the import from China was valued at Rs 11.05 crore. In 2016 the trend was much higher with exports from India increasing to Rs 63.38 crore and imports from China Rs19 crore. But, these are official figures that do not tell the whole story. n