Business and Finance

Silk route could finally re-open

June 28 - July 5, 2006
Gulf Weekly Silk route could finally re-open

INDIA and China have signed an agreement to resume trade across the Himalayas along an ancient artery of the Silk route that has been blocked for 44 years.

Giant warehouses and roads have been constructed on both sides of the 4,500m Nathu La pass, which once accounted for 80 per cent of the border trade between the two neighbours. A border dispute pushed India and China into a bloody, high-altitude war in 1962. This led to the closure of the route, which runs from Sikkim to Tibet.
When the border post reopens in July, some of the trade is expected to be much the same as in Silk route days – yak tails, sheepskins, raw wool, china clay and Chinese silk. But manufactured goods such as electrical appliances, watches, crockery, shoes and canned food will also be traded.
The immediate beneficiaries of the move will be the backward border state of Sikkim, and Tibet. With the Tibetan capital, Lhasa, just 286 miles from Nathu La, businesspeople in Sikkim expect the value of trade from their tiny state to touch five billion rupees ($108 million).
“The reopening of border trade will help to end economic isolation in this area,” a Tibetan official, Hao Peng, told the Xinhua news agency. “If only 10 per cent of Sino-Indian trade goes through the pass, it means more than $1 billion a year.”
Trade between India and China, conducted mostly by sea, has boomed in recent years. Last year it jumped by more than a third to $18.73 billion.
Mohan Guruswamy, the head of the New Delhi-based Centre for Policy Alternatives, said: “The reopening of Nathu La will also help revive the economy of India’s West Bengal state, starting with the tea district of Darjeeling.”
“Calcutta is just 540km from the Indo-Chinese border, and the port city will provide much-needed sea access to Tibet.” According to Xinhua, last year Tibet’s total foreign trade was a meagre $200 million.
Thousands of Indian pilgrims make the annual 15-day journey to Tibet’s Mount Kailash, revered by Hindus as the home of Lord Shiva. Once the border pass opens, the pilgrimage will be just a two-day drive from Nathu La.
Although few people live in the area at the moment, the opening of the pass is also likely to bring a rapid increase in population as trade and industry is revived. A weekly mail run, in which letters are exchanged by messengers who meet at the top of the pass, has been the only commercial activity for the past 44 years.
Years of animosity between the two countries has meant that the only direct air link between the Indian and Chinese capitals has been operated by Ethiopian airlines.
“The resumption of border trade is a great historic event, not only for enlarging trade but also for better relations between the two countries,” an Indian official, Christy Fernandez, told the news agency PTI after signing the agreement.

· Maseeh Rahman

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