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India stagtes at $50 million, Chi's hits $6 billion

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  24 Dec 2017 12:00 AM GMT


By Ranja rayan

As India prepares to celebrate the silver jubilee of its partnership with ASEAN in a big way, a key border trade link with Myanmar, the closest neighbour of the vibrant Southeast Asian bloc, continues to be hobbled by infrastructure and other issues — 22 years after it was launched.

India’s border trade with Myanmar takes place mainly through Moreh, in Manipur’s Chandel district, which links with Tamu, located in Sagaing in northwest Myanmar. There is another border trade point through Zowkhathar in Mizoram with the corresponding point Rhi in Myanmar, but Moreh is the biggest border trade point.

Though India and Myanmar signed the border trade agreement on January 21, 1994, and it was made operatiol the following year, the bilateral border trade figure stands at $50 million — a poor comparison to Myanmar’s trade with Chi, which was around $6 billion last year.

Myanmar has four border trading points with Chi, of which the one at Muse, in northern Shan state, is the biggest. Around 80 per cent of Myanmar’s formal overland trade with Chi passes through this post that links with Ruili, in Chi’s Yunn province.

While Chi has pumped in massive amounts of money to build modern infrastructure at Ruili and also in Yunn province to boost connectivity with Myanmar, the infrastructure at the India-Myanmar border post, Moreh, is still idequate. An Integrated Check Post (ICP) at Moreh has been in the works for the past 10 years and is yet to be completed.

Besides the difficult terrain and militancy that adversely affect border trade at Moreh-Tamu, India in December 2015 officially put an end to the barter system, or trading of goods without exchange of money. According to Myanmarese media reports, the ending of barter trade “killed” India-Myanmar border trade.

Professor Priyoranjan Singh, an economist at Manipur University, says that since the Government of India notification ending barter trade, “the present state is that formal trade, or normal official trade, stands at zero, and informal, or illegal trade — or head load trade — is going on”. He told IANS that there was a “huge information gap” between the two sides, including among the traders. “Our own Indian customs agency does not know the customs duty that Myanmar imposes on Indian goods,” he said.

Singh, who has expertise in the field, feels that “seriousness is not there” in India on boosting border trade, while Chi exhibits “huge seriousness, which is something Myanmar likes”.

Gautam Mukhopadhyay, former Indian envoy to Myanmar, says there are reasons for Chi’s border trade with Myanmar being more robust than India. “First, Yunn is a much better connected and more productive gateway from Chi to Myanmar than the Northeast of India to Myanmar. Secondly, for any Northeastern state of India to match Chi in cross-border trade, the region has to become a net producer than consumer, and better connected to the main productive regions of India,” he said.

On Chi developing the infrastructure in Myanmar, Mukhopadhyay says: “Chi has made huge investments into power and extractive industries for its own interests, but very little into employment-intensive industries that really benefit Myanmar. Chi has been able to convert its more selfish investments into greater political clout than India. This is something we need to think about.”

Economist Ram Upendra Das, head of the Centre for Regiol Trade, an autonomous institute under the Commerce Ministry, in his report on ‘Enhancing India-Myanmar border trade’ released last year by the ministry, says: “A major cause of discontent among local traders is that the pace of construction of Moreh ICP is very slow.”

Das told IANS that “it is very important that border trade is conducted through formal channels”, which would help increase the volume as India has slashed the tariff in a majority of items to zero, which means no border tax. (IANS)

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