INDO-BURMA BORDER TRADE :PART 1 AND

[mizzima@xxxxxxxxxxxxxxxx]

Subject: INDO-BURMA BORDER TRADE :PART 1 AND 2

INDO-BURMA BORDER TRADE: FOUR- YEAR EXPERIENCE WITH DIFFICULTIES

BY:	MIZZIMA NEWS GROUP
May 1999

According to official figures, India has emerged as the largest market for
Burma's exports constituting approximately 23% of Burma's global exports.
India ranked third in Burma's total foreign trade in 1997-98, contributing
about 10% of Burma's total trade volume. The two governments think that the
present level of trade between the two countries is much less than its
potential and thus needs to be boosted. 

However, the Indo-Burma border trade, which started four years ago with
great enthusiasm from both governments has never been smooth. The available
figures show that volume of trade has gone down in recent years. The border
trade is currently carrying out through Tamu-Moreh route  (Tamu which is a
township in Sagaing Division of Burma is bordering with Moreh of Manipur
State in India.) and the efforts are made by both governments to open an
additional route: Champhai-Rid (which connects Champhai township in Mizoram
State of India with Rid village of Chin Division in Burma). Burmese
authorities have also suggested the possibility of opening a third border
point at Paletwa township in Rakhine State in Burma and South Mizoram in
India. 

The Border Trade Agreement was signed on January 21, 1994 between the
Governments of India and Burma. The trade through Tamu-Moreh route was
officially inaugurated at Tamu on April 12th 1995 by Burma's then Trade
Minister Lieutenant-General Tun Kyi and India's then Commerce Minister Mr.
P. Chidambaram. 

Under the agreement, 22 items are identified for exchange by residents
living along the border between India and Burma. These 22 items are:
Mustard /Rape seed, Pulses and Beans, Fresh Vegetables, Fruits, Garlic,
Onion, Chillies, Spices (excluding nutmeg, vace, cloves, cassia), Bamboo,
Minor forest products excluding Teak, Food items for local consumption,
Tobacco, Tomato, Reed Broom, Sesame, Resin, Corriander Seeds, Soyabean,
Roasted Sunflower Seeds, Katha, Ginger. 

However, out of 22 items identified as exchangeable items, it is learnt
that only 12 items are practically viable for import and export across the
border. 

Some of the main items of exports from India to Burma through the border
trade are: Wheat-flour, Bicycle and its parts, Bleaching powder, Fenugreek
seeds, Ani seeds, Cumin seeds, Soyabari, Dry Chilies, Agarbatti, Suman Rose
Powder, Pea, Garlic, Stainless stell etc.. Main items of imports from Burma
to India are: Betel Nuts, Turmeric, Red kidney bean (Rajma), Kuth roots,
Gram, Resin, Reed-brooms etc..

The border trade suffered abrupt downfall of trade during the years
1997-1998 and 1998-1999. 

Volume of Trade:

EXPORT

Year			Value				Cess

1995-96		Rs. 10,45,32,984/-		Rs.   5,23,682/-
1996-97		Rs. 29,79,96,037/-		Rs. 22,64,112/-
1997-98		Rs. 25,16,67,199/-		Rs. 26,64,985/-
1998-99		Rs.   4,88,42,680/-		Rs.   4,51,289/-

IMPORT

Year			Value				Duty

1995-96		Rs.   5,39,05,477/-		Rs.    46,04,421/-
1996-97		Rs. 16,17,12,506/-		Rs. 1,37,54,666/-
1997-98		Rs. 37,19,55,314/-		Rs. 3,11,96,155/-
1998-99		Rs.  3,74,56,152/-		Rs.    37,80,194/-




(Source: Moreh Chamber of Commerce)

To be continued-

_________




The following is the Interview with Mr. G.K Pillai, Joint Secretary (North
East), Home Ministry, Government of India on 29th April 1999


Q: 	What is the present stage of Indo-Myanmar border trade? 
A:	We have trade at the Tamu-Moreh border and this trade point was
operationalised in October 1995. It has been functioning for the last three
years. Last year there were certain problems. As a result of which trade
volume came down considerably. I have taken a review meeting at Moreh to
understand the difficulties faced by the exporters as well as the others
and in the light of these discussions, an action plan has being drawn up to
bring the trade up again.

Q:	What are the problems and difficulties?
A:	Some of them are one the fact that Memorandum of Understanding in regard
to the Banking Arrangements have not been yet finalized. We got problems of
credit. We got problems in terms of infrastructure, telecommunication
facilities are not adequate. We also got issues like certain elements of
tax imposed by the State Government, which have according to the exporters
made it unprofitable for them to deal with that business. So, all issues
are being addressed.

Q:	Moreh Chambers of Commerce has submitted a memorandum to you mentioning
their problems including providing better facilities for telecommunication
in Moreh. What is your response?
A:	Our intention of course is to put the latest wireless equipment and to
improve the telecommunication facilities as also the banking facilities and
it was in this connection I had gone there to hold the meeting with all the
district officers concerned. A program of action has been drawn up and
further review that a meeting had been taken by the special secretary
(North East) at Delhi on 13th of May where all the departments would be
present.

Q: Some of the media reports say that a meeting of Chief Ministers of North
East was held recently and in which they asked for reopening of Steel Wel
road for promoting trade across the borders?
A: There was no meeting of Chief Minister of North East. But there was a
request by Chief Minister of Assam for opening of Steel Wel road. It is one
of the proposals under consideration. And it is not in lieu of. It will be
an additional point of trade and we have got like Champhai-Zokhattha-Ri
sector. There are a number of areas where we hope that we will be able to
develop more border trade points. And also set up the border huts in other
areas in Nagaland, Mizoram as well as Manipur. 

Q:	When this Chamhai-Ri sector route can be opened?
A:	We are almost ready to open the trade. But it all depends now on Myanmar
government as and when they would give their concurrent.

Q:	Myanmar had expressed the possibility of opening another border route
(Arakan state-southern Mizoram). The position of India?
A:	Yes, at the last meeting they had indicated the third route through
Rakhine State and both for the Kaladan River, the navigability of the
Kaladan River, technical feasibility study is being carried out by rites
and the team is already in Myanmar doing the studies. 


Q:	Some of the businessmen in Manipur expressed that this border trade has
not reached to the point where it was originally expected to?
A:	It is a fact. That is one of the reasons why I went to Moreh to review
and find out the difficulties and also to take up the various issues that
were raised by Moreh Chambers of Commerce with the view to solve the
problems. We know there are problems.

Q:	There are some Burmese activists in Moreh. Is their existence a problem
for the trade? Has Myanmar government asked the Government of India to
remove them from Moreh to boost the trade?

A:	It has nothing to do with trade. The activities of Myanmar dissidents,
the Government of India is not in favour of any dissident activities by
anybody in North East. And to that extent we do discourage such activities.

Q:	Some media reports say that Indian authorities have been asking to
remove Nampharlon market one kilometer away from the present location
towards Myanmar side. It is quite near to the border now. What the Myanmar
authorities say on it?
A:	We have not made any such request. It is within the State of Myanmar and
it is up to them to set up their market wherever they want to. It is not
our business at all.

Q:	Gate No. 2 is closed till now. Is it likely to open in near future for
the border trade?
A:	No. We have not taken any particular decision. There are some of the
issues that as I mentioned are the problems of Indo-Myanmar border trade.
And we would take this in the meeting on 13th to try and resolve these issues.

Q:	Are you optimistic that the volume of this border trade will go further
increased?
A:	We are hopeful to improve the trade between the two countries because it
is in the interest of both sides. That is why we have gone and taken the
meeting and we are carrying full of actions with a view to boost the trade
through this sector.

Q:	When we asked Chief Minister of Mizoram, he mentioned that he is not
that much satisfied with the present border trade and he mentioned that the
border trade is not benefiting to the people of Mizoram?
A:	Obviously, the trade is now basically between Manipur and Myanmar, it is
benefiting more to the people of Manipiur State. When the second border
point is opened at either at Zokhuttha-Rid or in the Rakhine State when the
route is opened, that would benefit the people of Mizoram.

Q:	Another factor, which makes more complicated, is drug smuggling through
the border trade?
A:	Drugs and smuggling of arms, why should they come through this
particular point, where there is custom checks and others. It will come
through other clandestine means of methods. I don't think opening of border
trade has anything to do with it. In fact, we are hoping that more and more
trade legalised, less and less of illegal trade will take place. Because
people can generally make money doing legal trade. Then more people will do
legal trade and less illegal trade.

Q:	What are the particular difficulties in dealing with the Myanmar
Government which is ruled by military regime?
A:	We have no difficulties. We are having good relationship with Myanmar
government. We have a working group. The Home Secretary and national level

meetings are held. The Commerce Secretary had gone there and had the
meetings at the highest level. So, we don't have any difficulties at all.

Q:	How about Burmese dissidents in India?
A:	I think we have to take internal affairs of Myanmar quite different from
dealing with into two countries. We are a democracy. We have our own ways
and which people likes to express their protest. The other thing is the
matter purely for the Myanmar government to take. We are not interested in
any dissident activity in the North East which is sensitive area for us. 

Q:	Local Indian merchants said that only 10 or 11 items of goods are now in
trading, out of agreed 22 items. Like onion and rice, Burmese government
banned exporting them. Indian side banned wheat exporting to Burma, etc.
Will these items be allowed to be in trade in future?
A:	We have two separate categories of items: one the 22 items which we keep
mentioning are the 22 items which are basically what we called head-load on
barter basis. We also have other items, which can be exported on legal
basis ..on trucks.. container loads etc.. which are based on the
export-import policy of either countries whichever is permitted by the
export-import policy of the either countries. That has been clarified by
the Myanmar government, but to operationalise all these items in the list
we require the banking arrangements to be finalized because such items only
can be sent through a Letter of Credit (LC) and banking arrangement. So as
soon as the banking arrangement is finalized, then the trade will pick up.
Of course, individual item, which may be stopped for sometimes, it may
happen from time to time. You know when there is a shortage of rice in
Myanmar, they may decide to stop the export. The shortage of wheat in
India, we might say, no export of wheat. That happens. Like onions, you
know, when the onions were in high price they stopped exporting onions.
That happens. But that is only a temporary decision at that time if there
is a shortage. Because, obviously when some items is in short supply in
India, you can't expect to export it.

Q:	Now India Government has been constructing the road from Kalay Myo to
Tamu. So what is the latest situation? Will it be finishing as schedule?
And any other infrastructure in future will be constructed in Myanmar with
the assistance of Indian government? 
A:	Tamu-Kalaymyo road is being constructed. In fact when I went to Tamu, I
also reviewed the situation with Border Road Organization (BRO) which is
constructing the road. That will be completed by December 2000 as per
schedule and that will be done. And any other infrastructure development in
Myanmar, there is no specific proposal as such except as I mentioned on the
Kaladen river, the rites steams are there doing the survey of the river
Kalendan. May be after the reports come, we will be taking whether that
requires funding or not.

To be continued-


Please note (new) address, tel./fax and email of:

MIZZIMA News Group
H-3/15, 1st Floor,
Vikas Puri, New Delhi -110018
India

Tel/Fax : 0091-11-5529817
Email : mizzima@xxxxxxxxxxxxxxx