Trade is only the beginning of the story

The likely reopening of the Nathula trade route will be a major addition in the basket of confidence-building measures between India and China. Besides the strategic and commercial gains for the country, Sikkim, eastern and north-east India have much to celebrate in this new vista of cooperation. This is the first major cross-border opening for the region as a whole which could bring in massive gains in terms of exchange of goods and services. If integrated with tourism activities, particularly the Buddhist circuit, this could be the world’s most magnificent eco-tourism sojourn interspersed with nature, culture and economics.

Nathula is the most viable and shortest possible route (around 590 km between Gangtok and Lhasa) to the whole of western China. The other routes—including the Shipkila in Himachal Pradesh and Lipulekh in Uttaranchal opened in the early 1990s—are comparatively very hostile and rugged.

The reopening of Nathula coincides with the “develop-the-west” campaign launched by the Chinese government since 2000. China’s western region covers two-thirds of the nation’s territory, with a population making up nearly 23 per cent of the national total. It comprises nine provinces and autonomous regions with plenty of land and natural resources, including Gansu, Guizhou, Ningxia, Qinghai, Shaanxi, Sichuan, Tibet, Xinjiang and Yunnan.

After eastern China’s 14,000-km coastlines brought fortunes to the country in the last two decades, it is now western China with 3,500-km land frontier lines that will become the second golden area of reopening. The completion of the 1,142-km railway line — an engineering feat — connecting Lhasa with mainland China through Golmud city in Qinghai adds a much larger dimension to this reopening.

Successful conduct of business through this route could generate the scope for a range of such openings between the neighbour-locked north Bengal and whole of the north-east and the neighbouring countries. This includes the Stilwell Road built during the Second World War that connects Assam with Kunming (China) via Myanmar. The ports of Calcutta and Haldia could be used more elaborately.

Such scientific opening of borders for economic and commercial purposes could, in fact, steadily replace the dominant security debate by the development discourse in the conflict-torn north-east region. This is the way to realise the larger goals of India’s Look East policy and consolidate sub-regional groupings like South Asia Growth Quadrangle (SAGQ) and Bay of Bengal Initiative for Multi-Sectoral Techno-Economic Cooperation (BIMSTEC).

It would be particularly naïve to expect traditional items like yak tail and goat skins to dominate the trade exchange through the Nathula route. Even Tibet is no more a market for religious or cultural items alone. It is a growing market that absorbs cement to latest cars and from yerchagon bu to tulips. The composition of products could, in fact, be much varied than the existing exchange at the bilateral national level as this route could cater to very specific needs and demands in a much quicker and cheaper manner than other national routes.

It will be a mere historical negation and impractical assumption to think this trade as limited interaction among the communities that inhabit the borders. This was the assumption in the border trade between Nepal and Tibet at Khasa and India and Myanmar at Moreh (Manipur). However, the actual volume, composition and direction of trade in these routes have far surpassed the local communities and local products. They do not at all reflect the border trade phenomenon.

Restrictions have only encouraged the illegal and surreptitious aspects of trade. However, given the level of infrastructure on the Indian side and the wretched condition of the road particularly the 50.6-km stretch between Gangtok and Nathula, it would be highly unrealistic to expect brisk trading instantly.

Tourists are likely to make a beeline to watch how trade actually takes place at the cross-border marts at Sherathang (India) and Renqinggang (China). The trade corridors, therefore, need to be highly regulated and their activities synchronised to ensure unhindered tourist flow. The income effects on roadside hotels and restaurants, handicrafts and transport and communication and many other backward and forward linkages are likely to be immense. Sikkim could gradually emerge as a dry port.

As usual, there are status quosists with insurmountable mindsets. Their arguments against reviving this traditional trade route vary from security to influx of Tibetan refugees and flooding of local markets by cheap Chinese goods to environmental concerns. It was the same mindset that literally maginalised India in Myanmar where it once had unparalleled historical strongholds, political and social constituency and substantive economic influence. India should have long harnessed these huge cross-border opportunities. Prime Minister Manmohan Singh’s well-acclaimed plea for cross-border infrastructure projects in the last SAARC Summit in Dhaka belatedly yet definitely recognises this clamour for lost opportunities.

One should not be unaware of the fact that this local integration strategy of China, including Taiwan, Myanmar, Hong Kong, Vietnam, Thailand, Laos, Indonesia and Korea, has paid back handsomely. There are examples galore: the South China Growth Triangle (SCGT), Greater Mekong Basin Growth Triangle (GMBGT) and the Golden Quadrangle. The northern Chinese provinces of Heilongjiang, Xinjiang and Inner Mongolia have been in the forefront of border trading with Russia and other central Asian republics.

The author is chairman, South Asia Centre (Jawaharlal Nehru University) and leader of the team of experts, Nathula Trade Report 2005