The Hindu Business Line : A passage to China

It is clear that the opening of the border-trade point between India and China at Nathu-la in Sikkim will be of great symbolic value as it will be a resurrection of one of the Silk Routes of yore, which opened for China the road to reach the markets of distant Europe and gave the Continent a passage to the mysterious, unscrutable Orient. But beyond this, it will still be quite a while before the opening of the pass for trade purposes yields any substantial returns for the two countries despite the potential the event has for future bilateral trade and development of the contiguous region.

As regards the trade potential of Nathu-la, it has been argued — not without justification — that in the event of the route becoming efficient, it would open up a gateway for trade and faster development for the vast under-developed regions of southwest China where, among other things, foreign direct investment is far lower than in the eastern and coastal parts. Indeed, it has been pointed out that, for this region, the transport costs via the Nathu-la-Siliguri-Kolkata port route would be far lower than the eastern coastal alternative, which could facilitate greater commercial exchange with the world at large. For the Indian side, there is no question that proper transport arrangements between Siliguri, Gangtok and Nathu-la would help the economies of the North-Eastern states as well as the Kolkata port itself by substantially expanding its hinterland. According to Sikkimese estimates, the value of bilateral trade through Nathu-la could average around Rs 500 crore a year, a second highly optimistic estimate putting the figure at as high as around Rs 12,200 crore ($26.5 billion) in 2015 (the current annual India-China trade exchange is around $20 billion).

Having said this, the point will have to be made that all this is in the distant future in view of the fact that the ground realities at Nathu-la — on both sides of the border — are still undeveloped to support even the beginnings of such a process. Not only are the two trade marts on either side of the border — Sherathang on the Indian side and Renqinggang in the Tibet Autonomous Region of China — incomplete (in fact, the Chinese cited this for not agreeing to begin border trade late last year), the road link with Gangtok is still in a rudimentary state considering what a full-fledged trade exchange would demand. What this means is that only the skimpiest of border trade arrangements involving traditional items can be set in motion at the moment once the green signal is given, which is expected any time now.

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