Govt liberalises trade with China through Nathula

Following direction from the Prime Minister's Office, the commerce ministry has liberalised trade with China through Nathula Pass in Sikkim enhancing the limit on value of single consignment to Rs 100,000 from Rs 25,000.

The liberalised rules have been notified by the Directorate General of Foreign Trade, meeting the long-pending demand of the Sikkim-based India China Trade Association.

India and China had allowed trade through Nathula in June 2006, but allowed a limited basket of items both for exports and imports.

Minister of State for Commerce Jairam Ramesh had visited Nathula pass several times since it opened for trade and interacted with the traders who were facing number of restrictions, including the limit on number of hours traders can stay in each others territory. These concerns were conveyed to the PMO.

The liberalised regime follows report of economic think tank National Council for Applied Economic Research, which was asked to suggest measures to boost trade through Nathula. According to the present arrangement, India can export only 29 items while China can sell 15 commodities to India.

Due to heavy restrictions, the total trade through the pass has stagnated at Rs 19 lakh, of which India's exports were Rs 9.0 lakh. These are insignificant figures as compared to the total bilateral trade of $18 billion. Historically, Nathula pass had been an important route for the India-China trade.

At the turn of 20th century, more than 80 per cent of trade between the two neighbours used to be conducted through this route. The route was closed after Sino-India war in 1962.