NEW DELHI: In a move that has major ramifications for trade with China, which is emerging as the country’s largest trade partner, the commerce and industry ministry is planning to open up bilateral trade through Nathu La in a big way. Instead of just border trade, the ministry wants to move a step further and go in for full-fledged exports and imports — called MFN (most favoured nation) trade — in global business parlance. In other words, rather than duty-free trade in a small number of items, import and export through Nathu La will now be opened up for all types of goods. Then, such trade will be subject to normal Customs duties applicable on them instead of duty-free status enjoyed by border trade. However, goods can move on their own without the need to be accompanied by the owners, which is the norm for the border trade. The liberalisation move is expected to provide a new dimension to trade through Nathu La. Once it kicks in, imports from China for other parts of the country like Bengal and the North-East can be routed through Nathu La. What’s more, China can import goods from other countries through the Kolkata port for supply to regions adjoining the mountain pass. The commerce and industry ministry’s plan to open up trade through Nathu La is based on a study conducted by the National Council of Applied Economic Research (NCAER). Jairam Ramesh, minister of state for commerce, had mooted a study following a visit to the mountain pass last year. NCAER’s recommendations, submitted to the commerce department, would now be discussed with the ministries of external affairs and finance, it is learnt. When contacted by ET, Mr Ramesh said: “There is very little scope for trade if we persist with border trade alone. What we have seen so far is export of rice from India and import of yak wool from China. This is not adequate. Full-fledged trade through Nathu La would help not only Sikkim, but also north Bengal and neighbouring regions.” Now trade through Nathu La takes place only between July and September, Mr Ramesh added while explaining why the benefits are limited so far.
“Nathu La is a key trade post that we have opened with China. It is important to make it function successfully to the benefit of not only Sikkim but also other parts of India,” he added. “India and China are WTO member countries and extend MFN treatment to bilateral trade. The possibility of making Nathu La a regular trading point between the two countries needs to be considered. This would provide growth and prosperity to the populations living on both sides of the border through many forward and backward linkages... ” says the NCAER study. In the interim, expansion of the list of commodities permitted to be traded through the mountain pass is necessary. Infrastructure is another reason for worry, especially on the Indian side. “There is a need for a modern Customs post and other support infrastructure on the Indian side. The road from Sikkim to Nathu La also needs to be maintained in a good condition to support flow of goods,” Mr Ramesh said. It is felt that opening up Nathu La for full-fledged trade would also boost flow of tourists to both countries. That apart, the government can keep a check on goods smuggling at the border and inflow of Chinese items through other countries. “Open trade would act as a safety valve to minimise informal Chinese imports entering India through certain other routes, including one through Nepal,” the study says.
(courtsey:G GANAPATHY SUBRAMANIAM TIMES NEWS NETWORK)
