China fears may not stop trade expansion through Nathu La

The paranoia about Chinese goods and spies swamping West Bengal and the vital Silliguri corridor...

The paranoia about Chinese goods and spies swamping West Bengal and the vital Silliguri corridor notwithstanding, the UPA Government wants to expand border trade through the Nathu La Pass to reach out to the Tibet Autonomous Region. It also hopes to move towards granting the most favoured nation status to China in the next three years.

A draft Cabinet note, which was circulated to the Ministry of External Affairs, Home Ministry and Defence Ministry last month, seeks approval for expanding the list of commodities traded at the 14,000-ft-high pass from the existing 18 to 600, with both countries building capacities to facilitate movement of 200-300 trucks.

The trade target, as envisioned by the Commerce Ministry, is around a billion dollars by 2015-16. Beijing is reportedly in agreement on this.

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Although both countries agreed to open Nathu La for trade during then prime minister Atal Behari Vajpayee’s visit to Beijing in June 2003, the Changgu-Renqinggang trade post was formally opened last May. At present the total trade is worth a measly Rs 18 lakh and it is confined to exotic commodities, including Yak’s tongue.

However, the Commerce Ministry’s draft note has attracted a lot of flak from the MEA and the internal security establishment — as was evident at a meeting chaired by the Home Secretary last month. The objections included that China might use the opportunity to swamp West Bengal with goods and increase activity in the vital Silliguri corridor; and that it might compete with India for influence in Bhutan.

But the Commerce Ministry’s argument is that already China has a trade surplus of over $8 billion via Indian ports, and border trade of merely 200-300 trucks will not make matters worse. The ministry pointed out that each ship of Chinese goods is equivalent to 20,000 trucks.

On the Bhutan issue, the ministry believes that Chinese goods are already available in Thimpu, and New Delhi, with more than 50 years of close bilateral relationship with the Himalayan kingdom, should not be fearful of Chinese influence.

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On the contrary, the Commerce Ministry believes that expansion of Nathu La trade will allow India to reach out to the Tibetan people and revive the historic Calcutta link of the past.

According to the note, a holding point 2 km west of Nathu La will be built with a capacity of 1,000 trucks. It is at this place that goods brought in by Chinese trucks will be transferred on to Indian vehicles under the close supervision of Customs and other revenue enforcement agencies. A similar mechanism will be available on the Tibetan side of the border for Indian trucks.

As there is a single all-weather road to Nathu La, the Commerce Ministry does not envisage any difficulty in monitoring the trucks or traders coming from Tibet.

While the work on holding points has already begun, comments from the Home Ministry, Defence Ministry and MEA are still awaited before the note is put up before the Cabinet.