The India-China road to -
somewhere By Shehla Raza Hasan
KOLKATA - Dignitaries from China and India
braved freezing rain to mark the official opening
of the Nathu La Pass this summer, an event
considered a landmark in the gradual rapprochement
of the two countries.
The pass, which
crosses the Himalayan Mountains at more than 4,000
meters from the Indian state of Sikkim into Tibet,
had been
closed since 1962, when India
and China fought a brief frontier war.
But
its opening may have more immediate symbolic than
practical value. Although there are optimists who
think two-way trade over this land bridge may
eventually grow to be worth millions of US
dollars, the results so far have been
disappointing. Businessmen from eastern India are
left looking for alternative and better routes for
trade.
Last year, the Nathu La Trade Study
Group, commissioned by the Sikkim government,
predicted a US$4.57 million trade flow by 2007,
$78 million by 2010 and $127.5 million by 2020.
Almost two months after the opening,
reports show that Chinese exports are pegged at
about $12,500 per week and Indian exports slightly
higher than that. However, it is probably
premature to judge success by these figures at
such an early date.
Truckers on the
Siliguri-Nathu La route alone, said the report,
could expect to earn annual revenues as high as
$3.1 million at present freight rates, even if the
traffic volume were as low as 100 trucks a day.
Industry bodies cite several reasons
behind the poor initial showing:
Lack of infrastructure: Poor
roads and communications, lack of banking
facilities and lack of container depots need to be
addressed before the envisaged brisk trade can
take off.
Need to expand basket of
permitted items: The list of 29 items from
the Indian side and the 15 items from the Chinese
side permitted do not cover a substantial
high-return-high-value range of goods and
services. Industry bodies feel that these lists
have to be expanded, and such items as livestock
should be dropped.
Limited seasons:
Trade through Nathu La can only be done
for a limited period during the year when good
weather conditions permit. This is the chief
reason the pass can never develop into a major
land route between India and China.
Speaking to Asia Times Online, Nazeeb
Arif, secretary general of Indian Chamber of
Commerce, the largest chamber in eastern and
northeastern India, said: "Owing to all these
handicaps, there is a strong need to tap
alternative land and sea routes for Indo-China
trade. The Nathu La Pass can at best be an
important trading post for the local market and
the Tibetan autonomous region and not for India
and China as a whole."
He pointed out that
the location of the pass is not ideally conducive
to India-China trade as it opens into Tibet, and
further north to the northwestern provinces of
China, which, from an Indian business perspective,
is not very exciting. It should be noted, however,
that a railroad linking Tibet with the rest of
China opened only a few weeks before the pass was
reopened (see Tibet railroad shows signs of
strain, August 16).
Many think
a land route along the old Stilwell Road in Assam
state through Myanmar and on to Kunming, China,
would be more interesting to Indian businessmen as
it would provide a direct route to the bustling
commercial heartland of southeastern China.
The Stilwell Road stretches for about 61
kilometers on the Indian side. The major portion,
1,033km in length, lies within the jungle-covered
mountains and swampy valleys of northern Myanmar's
Kachin state, while in China it is 632km. The
northeastern Indian state governments have been
urging the federal government to impress upon
Yangon the need to reopen the Stilwell Road.
Along with the land route, there is a
growing demand to open up more sea routes. The
Indian government, to step up trade in the
landlocked northeastern states, is urging Myanmar
to open the port of Akyab (Sittwe) on the Bay of
Bengal to Indian goods.
Another
alternative would be permission to transit goods
through the port of Chittagong in Bangladesh to
reach the Chinese and Southeast Asian markets.
The recent provision for building a
deepsea port off the coast of West Bengal has been
made with an eye on the rapid economic development
in the state and the need to reach out to Chinese
and Southeast Asian markets. The project is still
in the pre-feasibility stage and not yet even on
the drawing board. Once this port becomes
operational, any of the other alternatives will
seem redundant.
India-China trade amounts
to $17.4 billion and is growing at an annual rate
of almost 38%. This figure is likely to surpass
$20 billion before 2008. Currently, more than 90%
of trade between China and India transits by sea
via Tianjin - a port city some 120km from Beijing.
Shehla Raza Hasan is a freelance
writer based in Kolkata.
(Copyright
2006 Asia Times Online Ltd. All rights reserved.
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