With the hype over the reopened Nathu-La Pass dying down, India and China now understand that the modern trade potential on ancient silk route now replaced by a 56 kilometer stretch connecting the two nations is not spectacular as expected. Traders are disgusted that the export-import list of items allowed is outdated and not conducive to cross-border trade.
The bilateral agreement listed 29 items that India will export including textiles and blankets, agricultural implements, liquor, cigarettes, tea, barley, rice, vegetable oil, and local herbs. Chinese traders are to offer 15 items – from horses to goats and sheep, yak hair and tail, goat skin, wool, and raw silk. While these items were of interest to Indian traders in 1950s, there is no market for these products anymore.
Once the border was reopened, Indian and Chinese traders have been trying to export many items from the Tibet Autonomous Region (TAR) not on the list and the Indo-Tibetan Border Police (ITBP) and customs have been stopping the trucks as their products are not on the list. They have bought truck loads of flasks, carpets, electronic items, shoes, and soup bowls and none of them can be imported. Most Indian traders find ways to circumvent the law but since this requires cross border movement, and that too from China, the Army and customs are extra sensitive to what is being brought in and taken out.
Even on the Chinese side, the interest levels are waning with only 6 traders coming last week to the makeshift campus along the border to trade. They complain that while Indian traders are able to sell the choicest wares, they cannot.
However, despite self-serving protestations from traders, Indian Government attitude is (thankfully) unlikely to change in the short-run. Concerned with excessive “dumping” of Chinese goods in Indian markets, theft of brand items, proliferation of counterfeit items, are stopping the Government from encouraging such complaints. Further, an increased outflow into larger China through TAR will affect Indian exports to Bangladesh as Chinese traders will use the Nathu-La to reach Bangladesh markets and steal markets from Indian exporters. With a hostile Bangladesh Government in place that is bent on hampering Indian development at all costs, a welcome policy for China cannot be ruled out.
Although China has already accused India of creating unilateral and restrictive trade barriers and India yields now, the hemorrhage will be unstoppable.