$5,000 transactions likely on each trading day

Ambar Singh Roy

Gangtok, July 5

Forty-four years after trade through the "Old Silk Route" was halted following the Indo-China war in 1962, the trading community in the hill-state of Sikkim is visibly excited over the scheduled opening of trade between India and the Tibet Autonomous Region (TAR) of China through the Nathula Pass from July 6.

From tomorrow, Nathula - at 14,400 ft above sea level - will become the third border trading point between India and China, the other two being Gunji in Uttaranchal and Namgaya Shipkila in Himachal Pradesh. The agreement to open trade through Nathula was signed by the former Prime Minister, Mr Atal Bihari Vajpayee, during his visit to China in 2003.

A total of 29 items can be freely exported from India through the border trade with China. These include agricultural implements, blankets, copper products, clothes, cycles, vegetables, cigarettes, spices, local herbs, watches, shoes, etc. Several other items proposed for inclusion in the freely exportable items to TAR and China awaits the approval of the Government of India.

Among the 15 items that have been exempted from payment of duty when imported into India from China are goat skin, sheep skin, horses, sheep, goat, borax, butter, common silk, yak tail and yak hair, the last two items having religious significance for Buddhists.

Trade mart

On the Indian side, a trade mart has been set up at Sherathang, a few kilometres below the Nathula Pass. On the Chinese side, the trade mart is located at Rinchangang in TAR.

Because of the harsh weather at Nathula, trade through the pass would be open for four days a week four months of the year, between June 1 and September 30. Trade through Nathula will be carried out from 7.30 a.m. and 3.30 p.m. IST Mondays through Thursdays. Indian traders can go about their business on the basis of a "trade pass" that will be issued by the district collector of East Sikkim and, for the Chinese, by his counterpart in TAR.

The State Bank of India's main branch at Gangtok has set up a "satellite office" at Sherathang to provide trade-related transaction services. Says Mr Ranajoy Ghosh, SBI's Assistant General Manager in-charge-of the Sikkim region: "We will provide on-the-spot trade-related transaction services. We will also issue and encash foreign exchange for facilitating transactions that are permitted by the Government. As the trade volume increases, we will augment our services commensurately," he told

Business Line


According to Mr R.K. Mittal, spokesperson of the Confederation of Industries of Sikkim, though the border trade with Sikkim would be a "small beginning", the prospects and expectations on this score were very high. According to him, transactions to the tune of $5,000 were expected to be concluded on each trading day.

Mr Mittal feels that the "historical event" would be a "great morale booster to trade and industry in this part of the country". He is hopeful that the route will be opened for tourism at a later date.

For Mr Motilal Lakhotia, the opening up of Nathula for border trade would be a nostalgic moment. He regularly traded goods through the pass between 1954 and 1961. "I am delighted to be able to trade through Nathula after nearly 45 years. The economy of Sikkim has suffered so much after trade through Nathula stopped," he says.

According to Mr Lakhotia, more items should be allowed for trade through Nathula. The route should also be opened for tourism. "Let the country benefit," he says passionately.

And what better day to commence trade between India and TAR of China than July 6, the birthday of the Dalai Lama.

(This article was published in the Business Line print edition dated July 6, 2006)
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