trade boosting

Phula Moi is bracing herself for next month, when trading will reopen at Nathu La, which she has visited regularly for the past four years. The 38-year-old is busy completing formalities and hopes this year’s season will be good in terms of volume and participating traders.

"I take vegetable oil, biscuits and rice from here," she explains. "The Chinese traders bring copper, which I buy. There are about 250 traders who go from Sikkim every day. We leave at 8 am and are back by late afternoon."

Nathu La, which means the pass of the listening ear, is one of the three trading border posts between India and China. The other two are Shipkila in Himachal Pradesh and Lipulekh in Uttarakhand.

In July 2006, the two countries reopened trade across the 4,300-meter high Nathu La, which is 52 kilometers east of Sikkim's capital Gangtok, as part of a broader rapprochement.

The move marked the first direct trade link between the neighbors since they fought a bitter border war in 1962.

Exports expected to grow

Under the agreement, the people of Sikkim are allowed to export 29 items and to import 15 items from China, which are exempted from duty. Exports, which registered a modest 14,000 euros in 2006, have witnessed a quantum jump to nearly 216,000 euros, and are expected to grow even more this year.

However, traders on both sides of the border want the list of tradable items to increase as they say the limitations do not cater to modern needs. They say they want business with more feasible and marketable commodities.

Indian China expert Srikant Kondapalli says that the reason this has not come about so far is because "there is a lot of suspicion on the Indian side that China will use these routes to dump goods on the Indian market."

"The Indian government has decided to oppose any free trade proposals from China because of the lack of market economy status in China. It fears a flood of Chinese goods could displace small and medium enterprises. That is one reason why the basket has not been expanded," he says.

Bolstering trade and social relations

But Sunil Rai, who lives in Changu, 15 kilometers from Nathu La, feels trade is a confidence booster. "A lot of people come from China. We all go in about eight or nine trucks. Trade is good for both communities."

He hopes that restrictions on electronic goods will soon be lifted.

Besides bolstering trade and social relations, the reopening of the route has also generated employment and improved the economic conditions of the people of Sikkim, he and the other traders argue.

After opening next month, trade will continue till the end of November when the pass will close for winter.

Author: Murali Krishnan
Editor: Anne Thomas