Border trade resumes over Nathula

GANGTOK, 12 June: Trade activity on the Nathula border has begun with a trickle of traders and items finding their way across the border pass. This is after more than a week since Indian traders had suspended trading in protest of steep and uncalled for customs duty levied by Chinese officials on Indian goods.

While trading activity is just about resuming, the volume of trade is nowhere near what it was and also the number of Indian traders crossing the border into Renquinngang, the Chinese trade mart has gone down substantially, inform sources.

The lukewarm resumption of trade is a result of failed negotiations between Indian traders and the Chinese Trade Officer.

A delegation of Indian traders had crossed over to Renquinngang on the Chinese side earlier this week to negotiate with the Chinese customs officers and Trade Officer.

Controversy had erupted over the excessive rates of customs duty being charged by the Chinese customs officials on the Chinese side of the border. The Chinese duties are so high so as to make it impractical and a loss inducing venture for the Indian traders to continue.

Traders informed that the custom rates on goods being charged by the Chinese customs for payment by the Indian traders was 40% to 50% the value of goods. It was to negotiate this that Indian traders, it is informed, had sought to meet with Chinese officials.

However, unlike the previous year, this time it seems the Chinese are clear about their stand and remained adamant at the rate of customs duties they wanted to extract, inform sources. With the Chinese unwilling to give in, the Indian traders, as informed, have no option but to resume trade albeit on a softer note.

However, it is informed, that instead of taking their items over to Tibet, the Indian traders have preferred to take their goods up to Sherathang on the Sikkim side of the border and from there, hand it over to their Chinese counterparts.

Last year, the Chinese Customs is reported to have restricted the supply of the most in-demand good - Vegetable Oils - to 10 jars per trader per consignment. This year, the limit has been reduced to a clearly unfair One jar per trader per trader. This limit is for the amount that Indian traders can supply duty-free. Every jar [irrespective of weight/ quantity] above this limit attracts customs duty of 54 Yuan (Rs. 499.50), it is informed. 

Not only vegetable oils, but they are trying to impose tax on other products like tea, blankets etc.  The Indian traders are currently facing tough competition with the traders at the Khasa border between Nepal and Tibet and the taxation will further affect the present market. 

In protest against what they see as violation of a bi-lateral agreement by Chinese authorities [by taxing goods in a duty-free trade] Indian traders were voluntarily “not participating” in the trade and were demanding proper guidelines on the subject.

It needs to be highlighted that the Nathula border trade has proven to be a lucrative source of income for many of the traders and a trader, it is informed, can make up to Rs. 5 lakh to Rs. 7 lakh on average per trading season as profits alone and not including the so called custom duties on both sides. Given this margin the traders are not too keen to keep away from trade.