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Nathu La: Pass To Prosperity But Also A Challenge

Dr Pushpita Das is Research Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
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  • July 04, 2006

    Nathu La, identified as the third mountain pass for border trade between India and China, is officially slated to open on July 6, 2006 after a gap of 44 years. Previous attempts to open the border pass had to be postponed due to lack of proper infrastructure. This time around, the infrastructure from the Indian side is complete. A field visit to Nathu La on June 25, 2006 revealed that the approach road has been constructed. And the warehouses, customs and administrative offices, banks etc. at Sherathang, the designated trade mart situated 5 km from Nathu La, have been completed.

    Nathu La, situated at 14,420 feet was an offshoot of the ancient Silk Route, which connected India with China, the Middle East and Europe. It was thus once a part of the thriving Indo-Tibetan trade accounting for 80 per cent of the border trade between India and China at the start of the 20th century. The British even envisaged constructing a rail line from Siliguri to Chumbi Valley to facilitate greater border trade between India and Tibet. The border trade was, however, discontinued following the 1962 border war between India and China. With the thawing of relations between the two countries, hopes for the resumption of trade through Nathu La were once again generated. Sikkim, the State adversely affected due to the stopping of the border trade, forcefully advocated for its resumption.

    The opening of Nathu La represents the culmination of a process of resumption of border trade between India and China that began in December 1991. On July 1, 1992, both countries signed a Protocol on Entry and Exit Procedures for Border Trade. Border trade between India and China resumed in 1992-93, when two mountain passes at Shipki La in Himachal Pradesh and Lipu Lekh in Uttaranchal were opened. In June 2003, a MoU was signed between the two countries to resume border trade between Sikkim and Tibet. According to the MoU, Changgu in Sikkim and Renqinggang in Tibet Autonomous Region were designated as trade markets for India and China respectively. Nathu La was identified as the border pass for the entry and exit of persons, means of transport and commodities engaged in border trade. Both sides agreed to trade in 44 items (29 from export list and 15 from import list), which have been included in the border trade agreements of 1991, 1992 and 2003. Initially the trade will be tightly controlled, with just 60 vehicles and 100 traders allowed to pass through. The Indo-Tibetan Border Police Force will escort the Chinese traders and goods from Nathu La till Sherathang.

    The border trade through Shipki La and Lipu Lekh did not provide any impetus to trade and commerce in the region. The importance of Nathu La, on the contrary, is believed to be immeasurable. The State government even constituted a Study Group headed by Mahendra P Lama of the Jawaharlal Nehru University to study the prospects of border trade. The Report of the Study Group titled, "Nathu La Trade: Prospects, Potentials and Opportunities," which was submitted on September 2005, had an optimistic tenor. According to the report, the opening of the trade route through Nathu La would not only benefit the landlocked state of Sikkim but also its adjoining regions like the North East Region and West Bengal. It suggested that trade though Nathu La should be integrated with movements of tourists and that a bus service between Gangtok and Lhasa should be started. The report also envisioned that border trade would transform Sikkim into a dry port and Siliguri in West Bengal into a major trading centre. If China avails the port facilities of Kolkata and Haldia, which are nearer to the southern and western regions of China, it would not only help cut its transportation costs but at the same benefit Kolkata and Haldia immensely. The report estimated that the trade volume would reach Rs. 353 crores by 2010 and by 2020 it would be approximately Rs. 573 crores.

    The reopening of the Nathu La for border trade is seen as part of a greater confidence building measure between India and China. It would underscore China's policy of recognizing Sikkim as a constituent state of India. In his address to the Parliament in 2003, Atal Behari Vajpayee had said that the MoU on border trade through Nathu La in Sikkim was a significant development and "with this a process had started by which Sikkim would cease to be an issue in India-China relations." Economically, the benefits accruing to Sikkim are estimated to be immense. According to Chief Minister Pawan Kumar Chamling, the expected revenue generation from toll tax and license fee would be Rs. 81 lakhs for each of the first five years and is expected to go up to Rs. 3 crores. He also stated that revenue from tourists visiting Sheathing and Nathu La would be Rs. 181 lakhs and is expected to go up to Rs. 347 lakhs by 2010.

    In the midst of the euphoria, a few voices of apprehension can also be heard. The general population of Sikkim appears to be sceptical about the benefits of the resumption of border trade. They feel that it would simply legalise the smuggling of goods, which has hitherto been carried out via Nepal. They fear that instead of Bagdogra and Siliguri, now Gangtok would be flooded with Chinese goods. As far as employment generation is concerned, a few hoteliers and transporters seem enthusiastic about the reopening of Nathu La. The local population, on the other hand, sees more opportunities in the tourism sector than in border trade. Moreover, border trade would initially benefit only the residents of the East Sikkim district (especially Bhutias), since only they will be allowed to trade with their Tibetan counterparts.

    The people of Sikkim are also apprehensive that opening of the border pass would lead to a massive influx of Tibetan refugees. There is simmering resentment among the people of Sikkim towards the Tibetans. It is believed that during the late 1950s and early 1960s, substantial Tibetans crossed over to India and settled in Sikkim. In due course of time, they added "Bhutia" to their names and started availing the reservations facilities extended to the scheduled tribes of the state. Since the Tibetans were better educated compared to the local Bhutias, they were able to grab top positions in government as well as in other economic and social spheres.

    In addition, a substantial influx of Tibetan refugees can also have adverse political implications. Sikkim is a small state with a population of approximately 5 lakhs. It has 32 constituencies with about 18,000 persons in each. Even a small addition of Tibetans to the voter's list can alter the political destiny of the state. Even if the security arrangements and the terrain around the border pass do not facilitate large scale Tibetan infiltration, complacency in guarding the borders can cost us dearly. The case of Bangladeshi refugees and illegal migrants do serve a good example to assess the impact of illegal migrants both in socio-economic and political life of the border states of India. The opening of the border pass can usher in an era of prosperity, but India should be prepared to meet the challenges it might pose in maintaining the peace and tranquillity of the strategically sensitive border regions.