The Hindu Business Line : Local impact

There is little doubt that, symbolically, the opening of the Nathu-la trade route between India and the Tibet Autonomous Region of China means a lot, the most important point perhaps being the fact that, by agreeing to such a step, Beijing has conceded the long-established point that Sikkim is part and parcel of the Indian republic. This apart, the reopening of the trade route, after being closed for more than four decades, by itself, is a major development for the local economy. According to a Sikkim Government report, the daily trade exchange in the late-1950s involved the crossing-over of at least 1,000 mules and 700 people, the annual trade exchange reportedly totalling around $30 million (at current currency rates).

However, the point needs to be made that, beyond this, there is, as of now, nothing more to the opening of the Nathu-la trade point. This is certain to dampen the enthusiasm of those who have been expecting nothing less than the moon vis-à-vis the impact of the event on India-China trade (it touched more than $13 billion in 2004 and is climbing fast). Rather than bilateral trade, in all likelihood, the real contribution of Nathu-la will be to promote India's border exchange with China, and that too as applicable to the requirements of the local region on either both side of the frontier. On the Indian side at least, apart from the local flavour of the 44 items that can be traded, the exclusive nature of the exchange is underscored by the fact that no Indian citizen will be allowed to participate in the commerce unless he is a Sikkim-subject certificate holder or a permanent resident of the State. Not surprisingly, the entire Nathu-la initiative is being described as a personal triumph for the Sikkim Chief Minister, Mr Pawan Chamling, his immediate objective being to give a boost to his State's economy, which is a legitimate enough goal but with limited utility.

Perhaps this explains why West Bengal, which formed an important part of the border trade route historically, has been excluded from the Nathu-la scheme of things as of now. This is as it should be in view of the fact that there is a long way to go, especially in terms of infrastructure, if Nathu-la is really to make an impact on India-China bilateral trade. While Mr Chamling's laudable dream of transforming Sikkim into another Singapore (based on the Nathu-la opening into China) is still far into the future to be clearly seen now, it will do no one any harm to strengthen the border trade logistics which, among other things, would enable exploitation of the full potential of the exercise, though localised for the time being.

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