Follow the Tripura example on border trade

If the 'border haats' on Tripura-Bangladesh border have become such a roaring success with ever rising demands for more, why cant that be replicated on the India-Myanmar border ! Why cant the market for contraband products at Namphalong in Tamu  opposite Moreh be converted into a 'border haat'  like Kamalasagar or Srinagar on the Tripura-Bangladesh border !

Let us stop blaming Delhi for inaction . Let us take it for granted that Delhi is a Kumbakarna that occasionally wakes up.  But if other northeastern states do it the Tripura way, they need to be vocal on issues of their interest and push Delhi hard. At least we now have a Prime Minister who will listen to walk the talk before crucial elections like Assam.

A victory in Assam is as critical for Modi now as a victory in Tripura  was for Rajiv Gandhi in 1988. After several key states polls lost, there is a felt need for a turnaround which Assam could provide to the safrons.  This is the time not only for Assam but other northeastern states like Manipur to extract their share of pie.

Nagaland, Mizoram, Manipur and Arunachal Pradesh should strongly push for 'border haats' after the success on Tripura Bangladesh border. According to the Committee on Informal Cross Border Trade, the value of total unofficial trade was approximately Rs. 8, 365 crore in 2000-01 on India-Myanmar border. Add under-voicing and informal exports and the figure will go up. And in the last fifteen years, this must have increased several notches in the last fifteen years. But unless this is converted into legitimate trade, the state governments gain nothing in revenue and locals only make a meagre sum as headload carriers. 

A study by the Indian Institute of Foreign Trade (IIFT), (1995), estimated the annual volume of cross-border trade through three border towns of Moreh (Manipur), Champhai (Mizoram) and Lungwa (Nagaland) at around Rs. 2,200 crores. Of which Moreh contributed the largest share of around Rs. 1,600 crore followed by Champhai around Rs. 500 crore and Lungwa around Rs. 100 crore. A large scale of trade is done through illegal channels at Moreh and Tamu. This volume of illegal trade is surely much higher than the volume of legal trade.

As they say, there is a silver lining to all dark clouds . The huge illegal trade proves we have huge potential for legal trade only if appropriate steps to make it easy by lesening stifling government controls is introduced.

A three-ti­er system of trade was introduced for cross-border trade at Moreh some years ago.

1. Locally produced items that were traditionally exchanged between the indige­­­nous people residing within 40 km on either side of the border would be traded under simplified documents up to a maximum value of US $ 1000.

 2. Barter Trade of 22 agreed upon exchangeable items up to a maximum value of US $ 20,000. The items that can be traded under this category are locally produced commodities consisting of agricultural and minor forest products. 

3. Normal or Regular Trade3 under the Letter of Credit System as per Export Import Policy guidelines. Normal trade or Regular trade refers to trade where transactions are done through banking channels for all freely permissible items of exports and imports and with license for restricted items. It has also been agreed that import of rice from Myanmar is pegged to an annual ceiling of 50, 000 metric tones. 

The following 22 items were marked The following 22 items were marked out for Barter trade : 

1. Mustard /Rape seed  2. Tomato  3. Pulses and Beans 4. Reed Broom 5.. Fresh Vegetables 6. Sesame  7. Fruits 8. Resin 9. Garlic 10. Corriander Seeds 11.. Onion 12. Soyabean 13. Chilies 14. Roasted Sunflower Seeds 15. Spices (excluding Nut Meg, Mace, 16. Food items for local Cloves, Cassia & Cinnamon) consumption 17.. Bamboo 18. Katha 19. Minor forest products excluding Teak, 20. Ginger and any other such commodity  21. Betel Nuts and Leaves 22. Tobacco be mutually agreed upon between the two sides. 

Traders are now demanding inclusion of more items, especially manufactured goods in the agreed exchangeable list. A study on Indo-Myanmar border trade by Mero exhibits that all third country goods and non-specified barter trade items are entering in unspecified quantity from Gate No. 24 in Moreh without levying any duty. 

So what do we do !

All the four states with borders with Myanmar ( possibly a fifth one which is not far away -- Assam) should form a committee with their commerce ministers in it. They should include local trade chambers, economists and some Central representatives.   Some trade economists from IIM, Shillong must be included to bring expertise. They should work out a comprehensive border trade regime by studying the situation on ground and offer it to the Modi government within 4-5 months. And the Centre should immediately implement them to open up trade with Myanmar. 

Delhi has to realise that operationalising 'Look East' should start with higher volumes of legal trade on Indo-Myanmar border . This will not only bring huge revenues to both States and Centre ( if illegal trade is converted into legal trade) but will encourage Indian manufacturers to set up shop in Northeastern states. Why wont Avon or any other Jullundur based cycle maker set up units in Manipur if these cycles are in huge demand in Myanmar ! 

The Centre does not have to waste huge amounts in transport subsidy -- it should negotiate a wider list of tradeable items to include cycles ( for instance) to get Avon set up shop in Imphal. Regulating the border trade regime intelligently is not only helpful in kickstarting the insurgency-ravaged local economies but also in operationalising the larger game plan associated with Look East.  

It is time for our state governments to push the Centre relentlessly with specific demands like Tripura has done ( to get railways, internet gateway etc) all so quietly. Don’t blame Delhi , but push it hard -- or else the Kumbakarna does not wake up.

Subir Bhaumik

( Subir Bhaumik is a veteran BBC journalist and author of three well acclaimed books on India's Northeast including the "Agartala Doctrine" that has just been published)