India-China standoff casts shadow on Nathu La border trade

While the pandemic stalled trade this year, the 200 traders from Sikkim fear LAC tensions may affect their business next year

September 12, 2020 07:30 pm | Updated September 13, 2020 08:55 am IST - Kolkata

Busy border:  A file photo of Chinese and Indian traders  at a mart, about 5 km from Nathu La.

Busy border: A file photo of Chinese and Indian traders at a mart, about 5 km from Nathu La.

Tenzing Tsephel Bhutia, a second-generation trader at Nathu La in Sikkim, has been doing business with Chinese traders for the past few years. The Gangtok resident got into the business in 2015 after his uncle Gnawang Norbhu, who started trading at Nathu La when border trade reopened in 2006, hung up his boots.

This summer, however, there has been no trade because of the COVID-19 outbreak. And as they watch the trading season draw to a close without any earnings, the 200 traders from Sikkim, like Mr. Bhutia, now fear the tension between India and China at the Line of Actual Control (LAC) in Ladakh may affect their business next year too.

Speaking to The Hindu , Mr. Bhutia said though trade at Nathu La, at an elevation of 14,140 feet, is tough as it involves long arduous journeys for the goods, crossing custom checkpoints between the two countries, it is good business.

“I used to export foodgrains, particularly rice, maida (flour) and biscuits and in return we bought clothes, shoes and handicraft. My annual turnover of export and import was well over ₹50 lakh,” said Mr. Bhutia, who is also the general secretary of Indo-China Border Traders’ Welfare Association.

Cause for concern

Sikkim’s Minister for Industries and Commerce B.S. Pant also expressed concerns over the future of the border trade through Nathu La.

“There was no trade even for a single day this year. About next year, we do not really know considering the relations between India and China,” said Mr. Pant. According to the Minister, the decision to suspend the trade was taken in March. “Since the Centre has a major role in facilitation of trade, we urged it to suspend the exercise this year fearing the outbreak of COVID-19,” he said.

The Kailash Mansarovar Yatra , which started via Sikkim a few years ago, was also suspended this year.

The border trade via the Old Silk Route at Nathu La reopened on July 6, 2006 amid expectations of improving relations between the India and China. Trading activity takes place for six months from May to November, four days a week — Monday to Thursday — and only registered traders are allowed to buy and sell.

The Doklam effect

In 2006, the border trade started with exports worth ₹27.87 lakh and imports of ₹6.88 lakh. By 2016, the volume of the trade had multiplied 200 times. According to the figures provided by the Department of Commerce and Industries, Government of Sikkim, the value of exports from India to China at Nathu La in 2016 was ₹63.38 crore and the imports were valued at ₹19.30 crore.

However, the long drawn standoff at Doklam between the Indian and Chinese forces in 2017 had an adverse impact and trade dropped by almost 90%. Exports from India plunged to ₹7.83 crore while imports from China receded to ₹1.02 crore.

According to customs officials guarding the Serathang checkpost on the Indian side, trade had to be suspended in 2017 as the Doklam standoff — June to August — coincided with the trading season. Doklam is about 56 km from Nathu La.

But trade picked up again in 2018 and exports increased to ₹52 crore and imports to ₹3.23 crore.

“In 2019, the trade declined because of the poor condition of the roads. Certain stretches had turned very steep and prone to accidents,” said Tashi Thendup, another trader. The data for 2019 from the Customs put the exports at ₹40.31 crore and imports at ₹3.20 crore.

Limited list

An official of the Industries and Commerce Department explained that exports were higher because 36 articles were allowed to be exported but only 20 articles were approved for import. In 2006, the trade was restricted to 29 items from Sikkim and the Tibet Autonomous Region (TAR) of China. Indian traders were allowed to carry goods valued at ₹2 lakh and Chinese traders were allowed to bring goods of same value in Yuan, he added.

While the volume of the trade may not be huge and only 200 traders are involved in the exercise, political observers believe that the trade at Nathu La has a unique symbolism and underlines the idea of Sikkim — which shares borders with China, Nepal and Bhutan — being a peaceful and tranquil State.

The trade, more than anything, ensures a direct people-to-people link as Indian traders go almost 20 km inside Chinese territory to Rinchengang, while Chinese traders come to Serathang, about 7 km inside Indian territory at Nathu La.

Now, neither the officials in Gangtok nor the traders at Nathu La are sure about what the future holds.

“As a businessman I would certainly want the trade to resume next year. But if the government decides against it, as a citizen of the country I will accept it,” said Mr. Bhutia.

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