Joint study group on trade and investment set up
While overland trade between India and China is currently under Rs 10 crore (of a total yearly trade volume of Rs 24,000 crore), a big boost is expected with the agreement between India and China yesterday on allowing border trade through Sikkim and Tibet.
This is so because neither of the current points of border trade--Shipki La in Himachal Pradesh and Lipulekh in Uttaranchal--have motorable roads, while Changgu in Sikkim through the Nathula pass has a road already.
Reacting to the development, Ficci Secretary-General Amit Mitra said: "Border trade has to go up dramatically. The new route is a far better one, and China is paying a lot more attention to developing underdeveloped regions in its western part now."
Briefing the press on the details of the agreement, External Affairs minister Yashwant Sinha quoted Chinese Premier Wen Jiabao as saying "this is a new stage of development in our relations, and adocument of historic significance".
Sinha said the new route was a "whole new point of trade for the entire eastern sector".
Interestingly, the details of the agreement released today show that China is well on its way to recognising Sikkim as an integral part of India.
While agreeing to the land route for trade at Changgu in Sikkim, the memorandum signed by External Affairs Minister Yashwant Sinha and Chinese Commerce Minister Hu Fuyan talks of "opening another pass on the India-China border".
This is reiterated while saying "the Indian side agrees to designate Changgu of Sikkim state".
In return, Renqinggang of the Tibet Autonomous Region has been chosen as the destination for China's border trade into India, and in another agreement signed by the two prime ministers it is explicitly stated that "the Indian side recognises that the Tibet Autonomous Region is part of the territory of the People's Republic of China".
Since both countries are wary of possible negative reactions, this important breakthrough has been couched in the form of a border-trade agreement.
Both sides were at pains to point out that the trade agreement was not a significant shift from their long-held positions.
"The question of Sikkim is an enduring question which cannot be solved overnight. We hope this question can be solved gradually," Chinese foreign ministry spokesman Kong Quan told a news conference.
"What we have said on Tibet is consistent with what we have said in the past and I don't think the question of the Dalai Lama leaving India or asking to leave India arises at this time," Sinha pointed out.
In order to enhance trade and investment, the two countries have also agreed to set up a joint study group to examine the complementarities, and a plan for co-operation for the next five years. The group will submit measures for this by the end of June 2004.
A special representative has also been appointed by both sides to explore avenues to reach a broad political agreement on the border.
National Security Adviser Brajesh Mishra has been appointed from the Indian side and Dai Pingguo, the seniormost vice-minister, from the Chinese side.
Defence exchanges between the two countries are also to be enhanced.
