Millennium Post

Indo-China trade to go up

While investors and business circles grumble over the tardy pace of growth in Indo-China bilateral trade through the Nathu La Himalayan outpost, Beijing is apparently not too keen to launch any export promotion initiative just yet. In the context of India’s large trade deficit vis-à-vis China, the reverse trend at Nathu La, where China imports far more from India than it exports, strikes most observers as an oddity.

In statistical terms, the volume of trade has increased considerably. In 2006, when movement between the two countries was resumed linking Sherathang, Nathu La in Sikkim with Rinqinjing, once part of the Tibet autonomous area (TAR) which is currently Southwest China, there was a trade turnover of Rs 20 lakh only! And there was nil import from China that year.

However, by Jan 2015, the figure had risen to Rs 17 crore according to one source, clearly indicating that there was considerable scope for achieving larger targets. However, existing rules and restrictions do not exactly make the process of doing business easier. There are 29 items that Indian businessmen and suppliers can export to China and only 15 that their Chinese counterparts can export to India.

Unpleasant memories die hard. Given the sensitivities in diplomatic exchanges and other forms of contact between the two countries after 1962, it is natural that the movement, clearance, and sale of each consignment is subject to very thorough checking on both sides. The high altitude and the rugged mountainous terrain, rule out the movement of heavy items.

In view of the prolonged harsh winter conditions, all activity relating to the movement of goods can be carried out only between May to November 30. In India, there is a hefty fee for securing the initial permit to trade and weekly permit renewals for vehicles, in addition to rigorous mandatory checking by Customs and other staff.

In terms of infrastructure, however, China is far better placed, with effective road and rail links available from Rinqinjing to the interior. This suggests that China could export far more goods and items if it wanted to. As for India only recently the widening of the existing road has been taken up. However a local hub is being set up to arrange better accommodation and other facilities for visitors and delegates from China.

By 2010, India sold items worth only Rs 9.85 million. Sikkim based traders and businessmen have requested the central government to include more goods for export to China and discuss the issue with Beijing to increase trade. A similar demand has been made from the Chinese side as well and the issue could soon be taken up officially.

Among items that India exports are agricultural tools, molasses (gur), misri (sugar product), tobacco, snuff, spices, canned food, herbs, utensils milk products and livestock such as goats, sheep and horses. From China, blankets, carpets, readymade clothes and quilts are exported.

A press release by Sikkim Government claims a much higher figure for bilateral trade than before. According to it, goods worth Rs 47.35 crore were exported till Oct 2015 and items worth Rs 7.23 crore imported from China. Some 70 –odd delegates from China participated in a joint meeting held at Sherathang recently, where various issues were discussed, with a view to initiate necessary measures from both sides. Defence officials were also present.

Intriguingly, Chinese media presents a more optimistic picture of the present volume of trade through Nathu La, an area which formed part of the earlier historic silk trade route that China is currently working hard to revive. Chinese ambassador to India, Mr. Le Yuchen admitted that the level of existing trade was “inadequate” but hoped that it would increase once China started investing in Indian projects.

In this context, the proposal from a prominent Chinese businessman to set up an industrial township in Haryana acquires special significance. The development follows recent talks between Indian Prime Minister Narendra Modi and the Chinese President Xi Jinping.

A typical recent report in a Chinese website on the state of affairs at Nathu La makes interesting reading. It says the volume of bilateral trade has risen by “54 times since 2006”. According to this source, China had imported 72.4 million yuan worth of goods but its exports were “meagre”, at 14.5 million only.

In West Bengal, a Chinese firm has announced plans to invest around Rs 150 crore initially to assemble buses locally, with plans to later begin full-time production of vehicles.
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