Financial Daily from THE HINDU group of publications
Tuesday, Nov 25, 2003
Industry & Economy
Nathula `Pass'port to better trade prospects with China
Ambar Singh Roy
Recently in Gangtok
TRADE in the hill state of Sikkim is upbeat on the prospects of Indo-China trade through the Nathula Pass. Equally upbeat on this score are the State Governments of Sikkim and West Bengal.
Lhasa, the capital of Tibet, is 431 km from Nathula. The Kolkata port, which is a little over 1,100 km from Lhasa, can serve Tibet and China as it serves Nepal at present.
At present, goods to Lhasa are routed through Beijing or Shanghai. Since the distance between Lhasa and Beijing is considerable, the trading community is expected to take advantage of the logistics and export goods to Lhasa through the Old Silk Route. Besides export and import of goods, Nathula - or for that matter Thegu or Tshrethang which are 10 km below - could well emerge as the immigration point for tourists at a later date. Buddhist tourists can easily access Gaya, Lumbini, Sarnath and monastries in Sikkim through the Nathula Pass. The Rumtek monastery in Sikkim is the main centre for the Karmapa Buddhist sect.
Siliguri and Jalpaiguri in West Bengal are set to emerge as transhipment points for goods arriving from Kolkata port for Tibet and China. At these two places, the plan is to load goods in smaller containers before they make their way up the hills to Nathula via Gangtok. Besides sending goods for the Indian market, Chinese exports to South-East Asia, Bangladesh and Myanmar can also be routed through Nathula.
However, appropriate roads and allied infrastructure must be built before actual trading can begin. It is estimated that Rs 400 crore would have to be invested on this score. Recently, the Governments of Sikkim and West Bengal got together to discuss how the two States can co-operate to facilitate the creation of infrastructure that would help realise the full potential of trade through Nathula. The setting up of a dry port at either Jalpaiguri or Siliguri is being contemplated.
In fact, until 1961-62, goods such as pens, watches, cereals, cotton cloth, edible oils, soaps, building materials and scooters and four-wheelers in knocked down conditions used to go from India through Nathula on mule-back. Two hundred mules carrying 80 kg of load each were used every day. In those days, it used to take 20-25 days to reach Lhasa from Gangtok. On the return journey, the mules would carry silk, raw wool, musk pods, medicinal plants, country liquor, Tibetan precious stones and gold and silverware.
While initially the barter system was followed, payments through banking channels took off later. The other point thorough which trade with Tibet used to be conducted was from Jelepla near Kalimpong in West Bengal.
For Sikkim, the impact of trade through Nathula could well be sizable. Infrastructure will have to be beefed up which means that economic activity there will receive a boost. Warehouses will have to be built and the transport business will receive a shot in the arm. At present, the State's earnings come mainly from tourism, online lotteries, earnings from sales of liquor and cardamom. Of India's annual production of 5,500 tonnes of cardamom, Sikkim alone produces 4,500 tonnes.
According to Mr K.B. Chhetri, Sikkim's Secretary of Industries, pre-operative work on trade through Nathula has begun. A report on the status and prospect of trade through the pass is under preparation and is expected to be ready within a month. "The expectations are very high and trading through Nathula will make a lot of difference to our State," he said.
Says Mr Motilal Lakhotia, a Gangtok-based businessman who regularly traded goods through Nathula from 1954 to 1961: "The potential of trade through Nathula is huge. The southwest part of Tibet is relatively backward. Besides other items, building materials and fuel can be accessed from Kolkata port. Import of high-volume, cheap Chinese goods from China will also become legal," he said.
The Confederation of Industries of Sikkim, too, is looking forward to trade through Nathula. Its treasurer and spokesperson, Mr R.K. Mittal, said trade and industry in Sikkim were "upbeat and optimistic."
According to Mr Mittal, China could well use Nathula for routing its exports to the Gulf countries. "This would reduce the time taken for consignments from China to reach the Gulf countries. And, as such, inventories-in-transport would get reduced as well," he said, adding that the strengthening of the infrastructure would have to be accorded topmost priority.
A Confederation of Indian Industry discussion paper on the impact of the opening of the Nathula Pass states that bilateral trade with China is expected to grow to $10 billion within the next 2-3 years from $5 billion in 2002. The discussion paper states that: "West Bengal is well placed to ride on this development of immense geo-political and economic significance. Nathula presents Bengal the opportunity of once again being a centre of economic activity in South Asia."
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