labels: economy - general, trade
The old Silk Road gets its first crossing after 44 years news
07 July 2006

Nathu La, Sikkim: The old Silk Road was reopened for border trade between India and the Tibet Autonomous Region (TAR) of China, 44 years after it was halted following the Indo-China war in 1962. A delegation of about 90 Chinese traders walked past the border at the 14,400 ft high Nathu La pass in the border state of Sikkim to mark the formal opening.

The Chinese delegation, led by the chairman of TAR, Champa Phunstok, received a red-carpet welcome from Dr Pawan Chamling, chief minister of Sikkim, his cabinet colleagues and a 100-strong trading community of Sikkim. The Indian trader-contingent, including a few who were regular traders through the Nathu La pass till 1961-62, later crossed the border to complete the formalities of the occasion. Sun Yuxi, Ambassador of the People''s Republic of China to India, was also present on the occasion.

The 14,400-foot pass is part of the famous Silk Road mapped by Britain to lead an invasion force to Tibet in 1904. Since 1962, only a weekly mail service went across the pass to exchange letters written by Tibetan herders on both sides. According to experts the reopening could eventually lead to a rail link between Lhasa, capital of Tibet, to India''s capital of New Delhi.

Traders from Sikkim and their Chinese counterparts, henceforth, can trade in select items through the Nathu La pass four days a week between June 1 and September 30 each year. Twenty-nine commodities can now be freely exported from India, while traders can freely import 15 items from China.

Speaking at the historic occasion, the Sikkim chief minister said the people of Sikkim had been hoping for the reopening of the trade route through Nathu La and for resumption of economic and cultural ties between India and China.

"We have a huge depository of natural resources. We are one of the bio-diversity hot spots. Therefore, there is an enormous scope for co-operation in sustainable management of natural resources," he said.

Chamling presented a strong case for integrating trade and tourism, especially Buddhist circuit tourism. He said that he also had it in mind to propose a Sikkim-Lhasa bus service at an appropriate time.

In his brief address, the chairman of TAR of China, Champa Phunstok, said the opening up of the Nathu La Pass would benefit the economies of both China and India. Later, inaugurating the trade mart at Sherathang, seven km before the Nathu La pass on the Gangtok-Nathu La route, Chamling also said it would be imperative to upgrade the present nascent level of infrastructure "to a robust and modern system" that can handle a major portion of bilateral trade between India and China.

The Nathu La Study Group, commissioned by the Sikkim Government, in its report submitted in 2005, gave two projections of the likely trade flow through Nathu La. The higher projection showed that trade could grow from Rs206 crore by 2007 to Rs2,266 crore by 2010 and on to Rs12,203 crore by 2015. The lower projection places trade flow at Rs353 crore in 2010, Rs450 crore in 2015 and Rs574 crore in 2020.

It may not be out of place to mention here that in the 18th century, India and China together accounted for 57 per cent of global manufacturing output, in large part due to their trade with each other. The Silk Road was a critical link in this trade.

Arguably, the 590 km Lhasa, Tibet – Gangtok, Sikkim trade route is the shortest trade route and can serve the Indian mainland, Bangladesh, Bhutan and Nepal region very well.

The route has the potential to divert an increasing portion of the trade carried out through the sea route because of its cost effectiveness and short time-lead.

The four decades of closure of this vital trade link had disrupted the economic system of many parts of the Eastern Himalayas, including Sikkim, the hill areas of West Bengal, Arunachal Pradesh, as also Tibet and neighbouring areas of China. For the two economic giants of Asia, Nathu La has other connotations as well. In 1967, five years after the humiliation of the 1962 war, Indian and Chinese troops exchanged fire for six days across the strand of wire separating the two sides. It was a clear signal from the Indian side to the Chinese that it could stand up to China. The same strand of wire over which that battle was fought, reportedly still separates two of the world''s major armies. Now, its no longer bullets that are whizzing past. The two giants are addressing other concerns.


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The old Silk Road gets its first crossing after 44 years