Zone of Peace
Light At The End Of Nathula
9 Jun 2006
Bijoy Gurung takes stock of the situation before border trade resumes
The background for trade between British India and Tibet via Nathula and the neighbouring Jelepla was established after Colonel Francis Edward Younghusband led a military mission to Tibet in 1903-04. Subsequently, the historic trade convention signed between the colonial rulers and Tibet in 1904 made the former a key player in Central Asia.
Fifty-eight years later in 1962, the Indo-China war caused the trade relations to abruptly come to a halt; the conflict created a dead end on both sides of the border, thus heralding a period of economic atrophy in the whole Himalayan region particularly in Tibet. The closure disrupted an entire economic system that had brought prosperity to many parts of the eastern Himalayas including Sikkim, the hill areas of West Bengal, Tibet and the neighbouring areas of China. The tradition of common cultural practices, intellectual exchanges and other activities including diplomatic missions was also discontinued.
Much has changed over the last four decades on both sides of the Himalayas. Tibet is now Tibet Autonomous Region (TAR). China has become a military and economic powerhouse and is demonstrating its capitalist might on the Nathula trade issue while the Indian response to it remains jaded.
The re-opening of Nathula has been a key demand of the local authorities in Sikkim, Darjeeling Autonomous Hill Council and the TAR since the 1980s. Finally, overcoming all geopolitical bottlenecks, the memorandum between India and China for border trade through Nathula was signed on 23 June 2003 during the visit of then Prime Minister, Mr Atal Behari Vajpayee, to that country.
Following many rounds of talks between India and China over the last three years, the resumption of bilateral trade between the two countries seems to be finally in sight. Such business has the potential to bring large economic benefits to the Tibet-Himalayan border region as well as the local economies in TAR and North-east India. Currently, Lipulekh pass in Uttaranchal and Shipkila pass in Himachal Pradesh are being used for border trade between India and China. In terms of feasibility and economic returns, none can compare to Nathula. The latter is arguably the shortest route to reach the ever-burgeoning middle class populations of India and Bangladesh as well as Bhutan and Nepal ~ a target China, the factory of the world, has fixed its sights on. A Confederation of Indian Industry research paper on the impact of the opening of Nathula states that bilateral trade with China is expected to reach $10 billion within the first few years.
The required infrastructure to handle the initial trade between the two countries is being put in place on both sides of the border. A trade mart has been set up in Sherathang in Sikkim about five kilometres from the Nathula outpost with stalls for SBI, animal husbandry and immigration, staff quarters with power, telecommunication and post facilities, as well as custom offices and warehouses. The Sherathang infrastructure, covering an area of 9.5 acres, was built on a temporary basis by the Indian government in 2005. Permanent infrastructure figures in the second phase of the planning. A dry run at Sherathang was conducted successfully by the Sikkim government on 21 April and a Sherathang development agency has been constituted to look after the affairs of the trade mart.
Meanwhile, massive development and construction projects are on in TAR. The 1142-km railway line from Golmud city in Qinghai province to Lhasa in Tibet is likely to be completed this month.
The report prepared by the Nathula Trade Study Group commissioned by the Sikkim government predicts two scenarios. The first says the volume of trade via Nathula will be of Rs 206 crore by 2007 and Rs 12,203 crore by 2015. The second indicates that trade through the pass will be worth Rs 352 crore in 2010 and Rs 450 crore in 2015.
Sikkim is not a "producing" state but could serve as the location for many significant functions including assembling, packaging, branding and distribution of manufactured or semi-manufactured products meant for export through Nathula, the report suggested. Already a tourism hotspot, the state can further open up a whole new sector ~ of business tourism ~ which has the potential to develop into a very vast activity.
For Sikkim, the impact of trade through Nathula could well be sizable. As infrastructure will have to be strengthened, economic activity will grow. The present government's endeavour to become a self-sustained state by 2015 through hydropower, horticulture and tourism will be further boosted by the resumption of the border trade.
Apart from the many items that have been agreed upon for trade, experts say China is eyeing two vital resources from Sikkim: the rich repository of about 500 species of medicinal plants and human resources with regard to the mastery over the English language.
On its part, Sikkim has been organising orientation programmes for the people so that they are able to reap maximum from the trade. The Confederation of Industries of Sikkim and the Sikkim Chamber of Commerce are looking forward to trade via Nathula.
Meanwhile, West Bengal is equally upbeat about the issue. Siliguri and Jalpaiguri in North Bengal are set to emerge as transshipment points for goods arriving from Kolkata port for Tibet and China. Once trade commences, goods can be loaded in smaller containers at these two places and sent up to Nathula via Gangtok or transported to other parts of the country by rail or road.
Besides goods for the Indian market, Chinese exports to South-east Asia, Bangladesh and Myanmar can also be routed through Nathula. The Kolkata port, which is a little over 1,100 km from Lhasa, TAR, as well as the Haldia port can be easily accessed by China. Sea trade with other South Asian countries may prove to be rewarding, thanks to the easy access to Bay of Bengal. Transport costs will fall dramatically as the existing maritime trade route from China to eastern India is more circuitous and lengthy than the traditional Silk Route.
However, existing plans to use the trade route for large-scale container traffic face formidable natural obstacles; appropriate roads and allied infrastructure must be set up. With an elevation of 4,310 m above sea level, Nathula receives heavy snowfall and remains impassable for normal traffic for several months of the year. Since Sikkim has no rail links or airports, it will need more highways; currently there is only one national highway ~ NH 31A ~ which is the lifeline of the state. The construction process of an airport at Pakyong, East Sikkim, must be speeded up and taken more seriously by the Central government. The human resources issue is being looked into by the state and capacity building blitz is underway. Once the trade resumes ~ there will be a five-year cushion period for the local traders ~ it is up to the people of Sikkim to be able meet the challenge and pit wits against the Chinese.
Back to Archived Reports List