World Journal of Research and Review (WJRR)

ISSN: 2455-3956, Volume-1, Issue-1, November 2015 Pages 04-11

Opportunities of Border Trade in North East India:

With Special Reference to Indo-Myanmar
Border Trade
Rishi Bhargav Das, Anjan Kumar Bordoloi

Abstract North Eastern India has nine percent of Indias

geographical area and contributes three percent to the
countrys gross domestic product (GDP). In relative terms, it is
one of Indias economically laggard regions. However, given its
natural resources base and strategic location, NER has the
potential to become Indias powerhouse in terms of trade and
investment. The region is best known for its cultural heritage,
ethnic beauty and rich natural resources. The region has rich
bio diversity, oil and natural gas, coal, limestone, hydro
potential and forest wealth. Given the peculiar geo-political
location, the region can develop cross-border markets, which
are likely to be more cost effective for North East Indias
surplus production than the distant national markets. The
region is famous for its exotic flora and fauna. It is ideally
situated to produce spices, fruit & vegetables, flowers and
herbs. Therefore, the North East India can emerge as an
exporter of orchids, flowers, apple, orange, pineapples, spices,
herbs, etc. to the South East Asian Region. From the
geo-political angle, the NER is located in a strategic location as
it is bounded by several foreign countries. Naturally it has got
both advantages and disadvantages due to its location. So far
advantages are concerned it is connected with the South-East
Asian countries mainly China, Myanmar, Bhutan, Bangladesh,
Malaysia, Thailand, Philippines, Cambodia and Indonesia etc
where almost half of the worlds population live. Border trade
has special significance for the economies of the North-Eastern
States, which have a large segment of international border on
their boundaries. Of the border trade conducted through the
international border of these states, it has been mentioned in the
report of the Inter-Ministerial Task force that the trade with
Bangladesh and Myanmar is especially important for a variety
of reasons. Apart from the fact that these two nations account
for the major portion of the border trade with the North
Eastern States, India has to forge special trade relationship with
both Myanmar and Bangladesh in view of the Inter-Country
trade issues. The paper intends to find out the prospects of trade
with Myanmar for N.E. states of India, examining its
constraints and challenges and analyze the initiatives of
Myanmar and India for border trade in view of Look East
Policy.
Index Terms Opportunities, Border Trade, North East
India, Indo-Myanmar Border.

I. INTRODUCTION ON NORTH EAST INDIA:

North Eastern India has nine percent of Indias geographical
area and contributes three percent to the countrys gross
domestic product (GDP). In relative terms, it is one of Indias
economically laggard regions. However, given its natural
resources base and strategic location, NER has the potential
Rishi Bhargav Das, Assistant Professor, Department of Commerce,
Nowgong College, Nagaon, Assam, India.
Anjan Kumar Bordoloi, Assistant Professor, Department of Management
Margherita College, Margherita, Assam, India, Ph: 91-9854013470 (Email:
[email protected])

to become Indias powerhouse in terms of trade and

investment. Although the NER is rich in resources like
hydrocarbons and other minerals, and has immense potential
to produce hydroelectricity, absence of adequate
infrastructure has impeded its development.Inadequate and
poor infrastructure, inhospitable terrain and a comparatively
late start in the development process are some of the reasons
for economic backwardness of the region. However, the NER
has certain strengths in different angles to achieve economic
development in easy way.
The region is best known for its cultural heritage, ethnic
beauty and rich natural resources. The region has rich bio
diversity, oil and natural gas, coal, limestone, hydro potential
and forest wealth. Given the peculiar geo-political location,
the region can develop cross-border markets, which are likely
to be more cost effective for North East Indias surplus
production than the distant national markets. The region is
famous for its exotic flora and fauna. It is ideally situated to
produce spices, fruit & vegetables, flowers and herbs.
Therefore, the North East India can emerge as an exporter of
orchids, flowers, apple, orange, pineapples, spices, herbs, etc.
to the South East Asian Region. The vast array of aromatic
plants of the region can be used in aromatic industry for the
manufacture of perfumes, incenses, etc. Rich bio-diversity,
heritage sites & ethnic beauty can make it a destination for the
tourists. Several big & small rivers flowing across this region
are suitable to construct hydro projects to generate electricity.
Moreover, owing to climatic advantage the region can also be
a major producer and exporter of tea.
From the geo-political angle, the NER is located in a strategic
location as it is bounded by these several foreign countries.
Naturally it has got both advantages and disadvantages due to
its location. So far advantages are concerned it is connected
with the South-East Asian countries mainly China, Myanmar,
Bhutan, Bangladesh, Malaysia, Thailand, Philippines,
Cambodia and Indonesia etc where almost half of the worlds
population live. There is no doubt that this vast population
could have great advantage for establishing any kind of trade
and commerce. But the vary geographical condition basically
the rivers and mountains of the country stand as a barrier and
create geopolitical tensions which ultimately act as most
disadvantages factors in creating a conducive atmosphere in
the path of developing trade relation among those countries.
But in the recent developments in the field of communication
and technology, some visible changes are taking place. Now
the NER have felt the need of the hour regarding the modern
facilities of lives. They have realized that in order to develop
the economy of the nation, the border trade could be an
effective solution.

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Opportunities of Border Trade in North East India: With Special Reference to Indo-Myanmar Border Trade

Border trade has special significance for the economies of the

North-Eastern States, which have a large segment of
international border on their boundaries. Of the border trade
conducted through the international border of these states, it
has been mentioned in the report of the Inter-Ministerial Task
force that the trade with Bangladesh and Myanmar is
especially important for a variety of reasons. Apart from the
fact that these two nations account for the major portion of
the border trade with the North Eastern States, India has to
forge special trade relationship with both Myanmar and
Bangladesh in view of the Inter-Country trade issues. It is also
important in view of the need to promote trade in locally
produced goods in which the region has strength. The report
suggests that a focus or promotion of export through the
border trade will promote greater value addition in the North
-East and help in shifting the export initiatives from the
trading centres located outside the region to those located
within the region. So a special importance needs to be given
to the measures connected with simplification and facilitation
of border trade.
In the context of globalization and liberalization and of the
emerging Look East Policy' of the government of India, the
issues of border trade across the North Eastern States of India
has attracted the attention of the governments, planners,
development agencies and the academics in India.
Considering the geographical proximity and huge
potentialities, the existing value and volume of bilateral trade
between the neighbouring countries like Bhutan, China,
Myanmar and Bangladesh on the one hand and India on the
other appear to be too small. It is because, trading between
these countries is quite difficult due to transport bottlenecks
and the protectionist policy followed in the pre-globalization
period. Lack of wider markets had impeded the economic
development and the process of exploitation of potentialities
of all these countries. With the initiation of liberalization
policy, border trade is now viewed as one of the important
instrument for the development of the bordering regions.
Border trade lessens the insecurity and hardships of life in
border areas particularly if it is far away from national market
places. It may observe that besides economic implications,
unlike sea or air borne trade, border trade unifies the interest
of the people across the border and it tends to strengthen the
links among the people living in the bordering areas which in
turn help in a greater way to make better border management
possible.
Recent developments widen the scope of Indias trade with
countries bordering North East India like academic
initiatives, a regional cooperation among these countries;
proposed development in transport and communication,
prospects of border trade of the regions by exploring new
frontiers with its rich bio-diversity like beautiful orchids
horticultural crops, major and minor forest products,
economic mineral resources, tourism products, plantation
sector including tea, coffees, rubber, bio-diesel products (viz.
jatropha) etc.

impeded many of the developmental prospects of the region.

The crucial geostrategic location of the NER along with its
rich natural reserves accords the region with the possibility of
being Indias powerhouse of trade and investment as well as a
substantive gateway to the robust engagements with the
neighboring countries. The trade at Indias border needs to be
enhanced to take advantage of the NERs strategic location.
The NER border is critical for business and commercial
transactions between North East India and its neighbours
beyond international borders or in its vicinity by the people
inhabiting the area. The importance of border is profound for
the NER as it yields tangible benefits to the region thereby
facilitating sustainable economic development. Determinants
like geographic proximities, socio-cultural and ethnic
affinities,
economic
complementarities,
political
commitments,
policy
coordination,
infrastructure
development and mutual interdependence extensively bolster
the promotion of trade at borders.
Given the NERs significant geo-strategic location by virtue
of sharing about 5000 kilometres of international borders
with the countries of Bangladesh, Bhutan, China and
Myanmar it can be utilized as a base for Indias improved
economic association with its neighbours. Moreover, it has
one of the most fertile stretches of land along the
Brahmaputra valley, whose viability for the cultivation of a
wide variety of cash and food crops on a commercial basis is
yet to be fully explored. Development of the trade at Indias
border between the neighbouring countries thus is conceived
as a necessary precondition for the economic development of
the NER in particular and the country in general. The trade
points in the NER border such as at Moreh (Manipur) and
Tamu (Myanmar), Zakhawthar (Mizoram) and Rikhwadhar
(Rhee, Chin), Avankhug-Somra point at Nagaland, Nampong
through Pangsu Pass in Arunachal Pradesh, Dawki in
Meghalya, Suterkandi in Assam and Nathula Pass in Sikkim
need to be developed and made operative for fructifying the
essence of economic cooperation with the neighbouring
countries.
However the ground realities of the region pose certain
challenges to the realistic realization of the trade transactions
at border. It encounters a plethora of constraints like the
spiraling problem of insurgency, poor infrastructure, rough
physical terrain, the influence of various pressure groups,
overarching uncertainties among the trading communities
and the absence of basic amenities in the border areas. The
inherent limitations need to be addressed to in order to make
this trade transaction a dynamic. The promotion of trade at
borders is a prerequisite for utilising the comparative
geographic and natural advantage of the NER and elevating
the region out of the menace of economic backwardness,
poverty and insurgency.
III. REVIEW OF LITERATURE:
Indo-Myanmar border trade is important to Myanmar because
it serves as alife-belt to Myanmars sinking economy. (Singh,
K.I. 2005). Informal bordertrade between Myanmar and its
neighbouring countries, viz., China, Thailand,Bangladesh,
India, have been going on for the past several decades.The
social,cultural, religious and the ethnic similarities among the
human groups haveencouraged stronger economic ties in the
form of border trade. The history is fullof such relations,

II. BORDER TRADE IN NORTH EAST INDIA:

The North East Region (NER) of India, despite being
endowed with immense resource potential, is considered to
be an economically backward region of the country. The lack
of proper accessibility and the absence of infrastructure
development and connectivity facilities have physically

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World Journal of Research and Review (WJRR)

ISSN: 2455-3956, Volume-1, Issue-1, November 2015 Pages 04-11
which are still continued despite formation of
impermeableboundaries. (Husain 2000). According to a
report of Joint Indo-Myanmar TaskForce (2006), trade along
the Indo-Myanmar border remains relatively low
incomparison with Sino-Myanmar and Thai-Myanmar
borders. India has been a lateentrant but the opening of more
border points will gradually increase the volumeof border
trade. However, lack of infrastructure on both sides of the
borderremains a limitation. The report further mentions that
security is another reasonwhich has been hampering the
border trade. According to the report, Tamu inNamphalong
market (adjoining area of India at Moreh) is flooded with
thirdcountry goods such as electronic goods from China,
plastic products from Korea,hardware and instruments from
Japan, textiles and consumer products fromThailand.
Indo-Myanmar border trade through Moreh is marked more
by overregulation seeing trade only as exchange of
commodities instead of seeing itas a means for flow of ideas
and opportunity for raising per capita income as well
(Yumnam 2005). Border tradeis essentially a form of
international trade and isassociated with inherent
complexities. (Bhattacharya 2005).
A case study was done at Moreh in Manipur and Nampha
long in Tamu by Singh, N.M and Luwangcha, H.K in 2007.
According to findings of the study, the total daily cash
outflow to Namphalong was about Rs. 2, 10, 93,000. This
excludes buyers from Moreh and surrounding villages,
invisible activities and other black transaction. The study also
revealed that Moreh market attracted a very less number of
customers as compared with Namphalong market. On the
other hand, Namphalong market in Myanmar is growing
faster as compared to Moreh in India. Cross-border trade
between India and Myanmar at Moreh in Manipur has
suffered because of various problems associated with social
and political issues. Ethnic conflicts, territorial boundary
disputes among states and influx of illegal immigrants are
some of the major problems facing the region. Frequent
blockades are imposed by different social/political/ethnic
groups on the highways, especially National Highway 39,
which is arguably the only freight route out of the state of
Manipur to the rest of India. Manipur is also facing problems
of poor infrastructure, like poor transport and communication
system, poor power and water supply system, etc. These
problems have imposed severe burden on the traders who
have to use the highways and has caused major disruptions to
trading activities. According to a report of Directorate of
Commerce and Industry, Government of Manipur, (2006),
the decline in the border trade is mainly because of disturbing
law and order situation, multiple check-posts on the National
Highway No. 39, restriction on import of timber, collection of
local levies, absence of food testing laboratory and limited list
of exchangeable items.
Items worth more than one crore are transacted everyday
through Gate No. 2only .It was told that some middlemen
collect taxes through the gate in the presence of both customs
and police personnel and the collected amount ranges from
Rs. 30,000 to Rs. 50, 000 per day. The main items of trade
through this gate are cigarettes, mattress, pillows, towels,
curtain, table, clothes, blanket, quilt, bed linen, electronic
items, toilet items, cosmetics, umbrella, raincoats, dry fruits

and food items, home care, candle, incense sticks, plastic

products like table, chair, etc., colour spray, nail cutter, knife,
scissors, trolleys, television stand, portable wardrobe,
decorative items like bouquet, dolls, toys and liquor. Informal
trade flows from Myanmar to India through Tamu-Moreh
border involve a series of procedures. First, Myanmarese
traders will issue a slip of paper to his Indian counterpart.
Indian traders will hand over the slip to Myanmar check post
officials. Then the Indian traders, it was told, will make a
series of payments to various check posts and police stations
in Chandel district of Manipur. (e.g., Indian checks post at the
border, Custom Preventive Force officials, Moreh Police
Stations, re-checked by the Custom Preventive Force
officials, Tengnoupal Police Stations and Pallel Check Post)
The above suggests that there is serious limitation in the
existing three-tier trade system. It is reported that a large
quantity of fertilizers (urea) have been exported illegally from
Manipur to Myanmar through Moreh. This has resulted into
shortage of fertilizers among the farmers in Manipur. The
fertilizers were procured from Brahmaputra Valley Fertilisers
Cooperative, Assam. There was an incidence in which a truck
load of urea was seized at Indo-Myanmar border carrying 100
bags of urea. Fertiliser is profitable in Moreh market because
of significant variation between market price in Imphal and
Moreh. For example, while 50 kg bag of urea cost Rs.1, 050
in Moreh market, it costs Rs 550 in Imphal market.
The recent imposition of sanction by the Government of
United States (US) on Myanmar and compulsory settlement
of normal trade transaction through Asian Clearing Unit
(ACU) dollar are now posing serious problem to the progress
of the cross border trade. (Bhattacharya 2005). It has been
pointed out that there is significant difference between the
official administered rate and unofficial market rate of kyat
against US dollar or India rupee. This has impeded the growth
of normal trade including letter of credit (LC) transaction. In a
study by Kathing (2005) on Indo-Myanmar border trade
shows that traders are reluctant to transact business under
regular trade and the letter of credit system because the
official exchange rate of currency appears to benefit Indian
traders. In such circumstances, barter system continues to a
viable solution for carrying out trade between the countries.
It may be noted that trade and trade related services have
increased manifold not only in border towns of Moreh and
Tamu but also in different parts of Manipur. Trade related
services include shops trading in variety of products like
electronic items, furniture, food items, etc. These products
are imported from Myanmar through Moreh. There are more
than 1000 shops in various places of Manipur and these shops
are selling goods flowing from Myanmar through the border.
On the other hand, there are also more than 1000 shops in
Namphalong market in Tamu. These shops sell a variety of
products ranging from agricultural goods to industrial goods
which are originating from third countries. All these suggest
that border trade between India and Myanmar has created a
large number employment opportunities among the
economically active people living on both sides of the border
as well as in different parts of Manipur.
To sum up, Indo-Myanmar border trade is vital for people
living on both sides of the border. Since the agreed

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Opportunities of Border Trade in North East India: With Special Reference to Indo-Myanmar Border Trade

exchangeable items are very limited, legal trade is carried on

small scale. The normal trade as a component of the three-tier
system of trade has not yet been started. As a result, barter
trade mechanism continues to be only means for carrying out
border trade. A large scale of border trade is carried out
through informal channels. This might be due to restrictions
imposed in the trade and long porous borders between the
countries. The flooded of third country goods in Tamu and
Namphalong market of Myanmar is mainly because of their
low prices as compared to goods originated from the states in
India. On the other hand, third countries like China, Japan,
Thailand, Korea and Singapore might have substantially low
cost of production, based on their production on labour
intensive as well as application of new technologies.

through the ancient city of Bagan in Central Myanmar.

Another project called Kaladan Multimodal Transport
Project (approximately 411 km) providing connectivity
between India and Myanmar along the Kaladan River in
southern Mizoram upto the Sittwe port (Myanmar) in the Bay
of Bengal has also been approved by Government of India.
The total estimated cost is US$ l05 million. India is to
provide US$ 95 and Myanmar US$ 10 million. The
Government of India has further agreed to provide the
amount in the form of a Line of Credit to Myanmar
Government. India has also been taking interest in Myanmar's
large gas reserves that would help to address its energy
security concerns. A trilateral deal between India, Myanmar
and Bangladesh has already been negotiated to export
Myanmar's natural gas from Shwe natural gas field in the Bay
of Bengal to India through Bangladesh.

IV. OBJECTIVES OF THE STUDY:

1. To find out the prospects of trade with Myanmar for
N.E. states of India.
2. To examine the constraints/ challenges of border
trade pertaining to India's North-East
region.
3. To analyze the initiatives of Myanmar and India for
border trade in view of Look East
Policy.

VII. INDIA-MYANMAR BORDER TRADE AT MOREH:

Unlike Assam, Tripura and Meghalaya, border trade at Moreh
is in the nature of transit trade. Moreh handles both export
and import cargoes. However, the volume of trade handled is
miniscule as compared to the informal/illegal trade that takes
place through the local trade point, better known as Gate No.
2. The latter has no customs officials; only a few security
personnel were found to be manning the gates. According to a
survey it was found that the no mans land was only a
narrow strip between the two gates, which was also being
used by the traders (chairs were laid out and were obviously
being used). The Trade taking places in form of Imports
consist of precious stones, agricultural commodities
including beans, vegetables and fruits, besides electronic
equipment. Quite clearly, the goods that are traded through
the informal/illegal channels are well beyond the 40 items
that have been included in the Border Trade agreement
between India and Myanmar. Most of the products coming
through Moreh are not of Burmese origin - they are produced
in China and elsewhere. Trade through Gate No. 2 is
heavily skewed against India.

V. RESEARCH METHODOLOGY:
The study paper is descriptive and theoretical in nature. The
study is mainly based on secondary data. Especially datas are
to be collected from various published, unpublished records,
books journal and internet.
VI. PROSPECTS OF TRADE WITH MYANMAR FOR
N.E. STATES:
Myanmar constitutes one of the critical components for the
success of India's Look East Policy. It has not only a common
land border of 1,643 km with India's North East states like
Mizoram, Manipur and Nagaland and Arunachal Pradesh but
also share a long maritime boundary. Besides border trade
between India and Myanmar, India has involved in oil and gas
sector and infrastructure development of Myanmar. India and
Myanmar formally signed Border Trade agreement on
January 1994 to exchange goods produced locally by people
living along both sides of the border as well as to create
mechanism to deal with foreign trade transaction. Both
governments agreed to open border trade through the
following points: (i) Moreh (Manipur) in India and Tamu in
Myanmar (ii) Champhai/ Zokhawthar (Mizoram) in India and
Rhi in Myanmar. Effort is also underway to open border trade
between Bangladesh and Mizoram.

Traders on the Indian side of the border report that the

infrastructure facilities are well developed on the other side of
the border at Namphalong (Tamu). About 700-800 well
stocked shops form the basis for imports from Myanmar. The
situation across the border in Moreh is in sharp contrast
there are less than 100 shops. There is clearly no momentum
in Indias exports to Myanmar. There is a market for Indian
products in Myanmar, some of which are currently being
supplied at sub-optimal levels. There is a demand for Indian
products during a brief trip to Namphalong, the shopping
district closest to the border near Tamu. Products include tea,
confectionery products, cosmetics, tyres utensils, fruit juices
and processed food products. In this market, the Indian
products are in serious competition with the Chinese products
on the display shelf. However, trade expansion from India
has often suffered because of supply-side bottlenecks, not the
least because of the frequent blockades and bandhs in
Manipur.

The states of Assam, Meghalaya and Tripura had already

operated border trade relations with Bangladesh. Sino-Indo
Border trade is expected to grow up in a big way in the North
East following the reopening of the historic Nathula Pass in
Sikkim. India has already constructed the 160 km long
Tamu-Kaewa-Kalemyo road at a cost of Rs 90 crores and also
offered to upgrade Rhi-Tiddim and Rih-Falam roads. India is
actively participating in the currently proposed Indo
MyanmarThailand Superhighway Project, 1400 km long to
connect Moreh in Manipur to Maesot in Thailand, running

Trade through the latter channel takes place through

head-loads. Consequently, there areno official accounts kept
on the volume/value of trade coming through Gate No.
2.Trade seems to be flourishing since there are no explicit

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World Journal of Research and Review (WJRR)

ISSN: 2455-3956, Volume-1, Issue-1, November 2015 Pages 04-11
checks at the border by the governments on either side. The
magnitude of trade taking place in phenomenal. Traders
daily imports are anything between Rs. 3-4 crore on average
(as per a study). As it is usually the case, any estimates of this
kind are likely to be underestimates of the actual level of trade
taking place. The trade balance is hugely against India given
the large quantities of Chinese (and some Thai) products
being imported. These estimates should be compared with the
official figures to understand the significance of
informal/illegal trade taking place through Moreh. Officially,
the two-way trade between India and Myanmar the quantity
of Import is much higher. The numbers for informal/illegal
trade clearly suggest that these trade and related activities are
sustaining the economy of the region. Barter trade is a
common practice among traders engaged in informal/illegal
trade.
Where currency is used, the mode of payment is Indian
rupees. This is to be expected since there is no official
exchange rate between the rupee and the kyat, and India has
the stronger currency. It would appear that the exchange rate
parity is another factor that is proving to be an impediment to
legal trade through the LCS.
VIII. STRATEGIC RATIONALE DETERMINES THE
CONTOURS OF INDO-MYANMAR RELATIONS:
1. Myanmar is located at the tri junction of East Asia,
South Asia and South East Asia.
2. Myanmar is the second largest of Indias neighbors
and the largest on the eastern flank.
3. Myanmar provides the Eastern littoral of the Bay of
Bengal. An unfriendly Myanmar hosting foreign
naval presence would pose a threat to Indian
security.
4. Myanmar has a big border with China in the north
contiguous with the Sino-Indian disputed border
which has many implications.
5. India has both a land border (1643 km) and a maritime
boundary with Myanmar in the Bay of Bengal, four
Indian states (Arunachal Pradesh, Nagaland,
Manipur and Mizoram) border Myanmar (Kachin &
Chin states and Sagaing Division)
6. China can gain access to Indian Ocean through
Myanmar.

IX. ECONOMIC IMPORTANCE:

1. Myanmar is Indias gateway to ASEAN as it is the
only country of this grouping which has a land and
maritime boundary with India. With India becoming
a summit level partner of ASEAN and a member of
the East Asia Summit, improved relations with
Myanmar will be beneficial in many respects.
Besides, Myanmar and India are members of some
sub regional groupings such as the BIMSTEC and
the Mekong Ganga Co-operation.
2. China has raised its economic profile in Southeast
Asia, particularly in Myanmar despite the sanctions
imposed by the West. India should not be left behind
especially in view of the large oil and gas resources
available in Myanmar and much needed by India.

X. AGRICULTURAL IMPORTANCE:
Agriculture still commanding a larger share in domestic
product of North Eastern region than in that of the whole
country, the region is deficient in production of quite a few
agricultural commodities. The region is dependent on
supplies from other parts of India for its almost entire
requirement of pulses and also a significant part of
requirement of rice. Rice and pulses being staple food items
for the population in the region have steady and stable
demand. The supplies from north-western India not only
involve large transport cost, but the supply routes are prone to
disruption during monsoon due to floods in Assam plains.
Myanmar is traditionally surplus producer and exporter of
these two products. There is no apparent reason why
Myanmar should not be able to supply these commodities to
the consumers of neighbouring North East India. Indeed
North East India can provide markets for other agricultural
products of Myanmar too. For instance, onion from Myanmar
often appears in the markets in Manipur whenever there is a
shortage of its supply in India. Once border trade is
liberalised, the item can be regularly exported to North East
India and even beyond. As of now supplies to North East
India come from such distant states as Maharastra.
Myanmar continues to export forest products like timber and
timber based products. Though North East India also used to
be rich in forest resources, unsustainable commercial and
industrial exploitation of these resources over the years have
denuded the region from much of its forest cover. The
situation has deteriorated to such an extent that the
honourable Supreme Court of India in an order in the year
1998 had to ban felling of timber in the region. Forest based
industrial units in the region including the plywood factories
have virtually closed down. A new supply line from Myanmar
can give a new lease of life to the forest based industries in the
region.
Myanmar also has strength in various types of mineral
deposits. Granites produced in Myanmar can find a market in
North East India where house construction has been a
booming activity. As of now heavy and bulky stones like
marble and granite used in construction in the North East
come, from Rajasthan in western India. Granites from
Myanmar should have transport cost advantage in the market
in North East India. Myanmar is also famous for high value
low volume stones like jade and ruby.
Myanmars coastal areas are richly deposited with natural
gas. Couple of Indian companies including the ONGC is
already engaged in exploration and production in the area.
With the Indian economy growing rapidly the demand for
energy is also expected to rise rapidly, indeed at a faster rate.
In that context gas supply from Myanmar can be of great
advantage for the Indian Economy. In fact there are already
some initiatives towards laying pipelines for importing gas
from Myanmar. Since laying pipelines through the Bay of
Bengal is likely to be far more expensive than through land,
the pipeline should be laid through the North East.
Another area of potential trade between Myanmar and North
East India, which has so far not been explored much, is trade
in services like health care, hospitality and tourism, which

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Opportunities of Border Trade in North East India: With Special Reference to Indo-Myanmar Border Trade

through backward linkage can generate trade in transport,

communication and related services.

potential for timber imports from Myanmar as the location of

Moreh is in the vicinity of vast timber producing areas of
Myanmar and the scarcity of timber in our own country holds
a natural advantage for trading in Myanmar timber. As per the
decision of High Powered Committees meeting, import of
timber from Myanmar was allowed only under the condition
that it will be used for local consumption only and will not be
allowed to be moved outside Manipur.
(v)Collection of Taxes:
Collection of sales tax, forest royalty and other taxes on
import of goods by the state government of Manipur has
added to the tax burden of the Indian importers. High
transportation cost and such taxes reduce the
cost-effectiveness of the trade.

The prospect of border trade between North East India and

Myanmar is not as bleak as may appear at the first sight. As of
now the growth of orderly and legitimate trade between
Myanmar and North East India has been kept in leash by
factors such as poor infrastructure and, more fundamentally,
the rigidities and tangles in the trading arrangement and the
over-valuation of Myanmars currency as per the official
exchange rate. Once border trade is allowed to take place in a
transparent and orderly manner, many dynamic economic
forces may be unleashed on both sides of the border leading
to opening up of mutually beneficial areas of economic
cooperation.

(vi) Illegal Collection Taxes:

The main vehicles plying on this national highway from
Imphal to Moreh are Bus, Tata Sumo, Maruti Van and Truck
for the purpose of transportation of goods and passengers. So
many underground organizations are levying illegal taxes
from these vehicles.

XI. CONSTRAINTS/ CHALLENGES OF BORDER

TRADE PERTAINING TO INDIAS NORTH-EAST
REGION:
Border Trade through Moreh:
In the Study, it was analyze the trend of trade between India
and Myanmar through Moreh, has received an increasing
trend upto a decade and thereafter there was a continuous
downfall in the trade. The challenges and Obstacles in the
growth of border trade are being discussed below ----

(vii) Community Crises and Law and Order Problem

ofMoreh Town:
Moreh town is a place of different communities with Kukis,
the highest number of population. There were community
crisis between Kukis and Tamils and Kukis and Meiteis. In
such situation, it is very difficult to have a free and smooth
trade. In addition to this, there are frequent bands and
blockades in the Moreh town as well as in this highway.

(i) Number of Exchangeable Items:

Trade in the barter and exchange mechanism is restricted to
only 22 items as listed in Ministry of Development of North
Eastern Region, North East India. Moreover, the 22 listed
items are grown and available on both sides of the border,
though in bulk on the Myanmar side, which has a surplus.
Goods of high demand in both sides are not included in the
list. It is found that all these items are being smuggled
illegally.

(viii) Military Junta in Myanmar, a Government with

Uncertainty:
The Union of Myanmar is military regime. The current head
of the state is Senior General Than Shwe, who holds the posts
of Chairman of the State Peace and Development
Council and Commander in Chief of the Defense
Services. General Soe Win is the Prime Minister. At any
moment, there may be a military coup and with the change of
leader any unpredictable changes may come up. The
movement for restoring democracy in the country has been
continuing and with the hike of oil prices in the country, an
uprising against military junta has started recently by the
pro-democracy activists and monks. It is difficult to say the
future of the trade with such an uncertain military govt.

(ii) Multiple Check Post on NH-39:

Multiple check posts and obstruction on movement of
import/export goods on the National Highway- 39 and 53
running through the state of Manipur and Nagaland have been
a major stumbling block. Representations received from the
trade indicate that there are 53 check posts of various depts.
of the Govts. of Manipur and Nagaland from Moreh to
Dimapur on NH-39 and as many as 12 check-posts of the
Govt. of Manipur on NH-53.

(ix)
Lack
of
Infrastructural
Facilities
for
International/Border Trade:
With a weight bridge, a Trade Centre building, a warehouse
with no working condition and a bad conditioned Two -lane
road, it is very difficult to prosper the cross border trade
between the two countries.

(iii) Restrictions on Export/ Import of Plant and Plant

Materials:
Growth of export trade from India to Myanmar is adversely
affected because of the restrictions on export of plant and
plant materials by Ministry of commerce which restricts
export of such items only through the ports of Mumbai,
Kolkata, Cochin, Delhi, Chennai, Tutticorine and Amritsar.
Import of plant and plant materials are restricted through the
Moreh Land Customs Station. Agartala Land Customs
Station and Karimganj Steamerghat and Ferry Station are
only notified entry points for this purpose. As a result of this
restriction trade has been suffering.

(x) Exchange Rate of Currencies i.e. Kyat and Indian

Rupee:
Myanmars currency is the Kyat. It must be one of the most
unstable currencies in the world. At present in the market,
Kyat has higher value. So, Indian traders dont prefer to have
trade legally and through banks.

(iv) Restriction on the Import of Timber:

The import of Myanmar timber is allowed through every post
of India except through Moreh. There is a tremendous

(xi)Security Consideration:
The major security considerations are:

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World Journal of Research and Review (WJRR)

ISSN: 2455-3956, Volume-1, Issue-1, November 2015 Pages 04-11
1. Insurgency in the North Eastern states of India-some
of the insurgent groups have established camps in
Myanmar and operating from Myanmarese territory.
2. Smuggling of arms (by both land and sea)
3. Drug trafficking and narco-terrorism.
4. Illegal immigration from Yunnan into Northern
Myanmar and association of Chinese workers in
road construction activities. From 1948 to 1962
there were a friendly and cordial relationship
between the two countries, but there was a strained
relationship from 1962 to 1992-1993. From 1993
onward India reversed its stance with a more
realistic and pragmatic policy and started engaging
the military regime. Since then, the relations have
been growing steadily and there has been all round
progress in political, economic and military
relations as well as co-operation in technology,
HRD, infrastructure, education, health and other
fields.
XII. INITIATIVES OF MYANMAR AND INDIA FOR
BORDER TRADE IN VIEW OF LOOK EAST POLICY:
NER is critically located for it holds the key to Indias
economic integration efforts with its neighbours in South and
South East Asia. A logical starting point for an exercise for
enhancing trade and investment cooperation involving the
neighbouring countries, with whom India shares common
land frontiers, is to study the dynamics of trade taking place
through the local trade points. Over the years, both the
Government of India and the Governments of the State where
these trade points exist, have realised the importance of these
trade points and have set objective of brining the
informal/illegal trade taking place onto the formal channels.
The following are the initiatives taken by Government of
India to promote a bilateral trade with Myanmar.
1. Development of border haats, alongside upgrading
the LCSs into ICPs, would provide tremendous
boost to border trade. While steps have already been
taken to open border on the India-Bangladesh
border, similar initiatives can also be taken on the
India-Myanmar border.
2. The Border Trade Agreement between India and
Myanmar needs to be revisited with a view to
substantially increase the list of products in which
barter trade is allowed at present. The list of 40 items
has lost its relevance while the normal or regular
trade has gained the popularity over time. With
almost all possible tradable items being traded
through Moreh, the most important trade point on
the India-Myanmar border, artificial barriers like the
ones imposed through the Border Trade Agreement
would only result in the development of a parallel
economy. Government may, therefore, allow normal
trade to take place in accordance with the Foreign
Trade Policy.

conducting high volumes of trade. Communication

systems are in a general state of disrepair inmost of
the border trade points. In some cases, like Moreh,
where communication systems are in place, the
service is highly erratic. Most of the other
infrastructuralfacilities are either non-functional or
are unavailable. These include weighbridges,
warehouses and dumping sheds.
4. The NER has been the hub of niche products in
handicrafts and handloom, much of which is in the
state of decline for want of effective government
intervention. As their budgetary position has
worsened, State Governments have lowered the
level of support that was once given to the artisans.
It is suggested that these activities need to be revived
with Central assistance through a well coordinated
programme to promote the artisans. This
programme will promoted one competitive and
staple product from a village to improve the living
standards of the population.

5. Development of local industries is an imperative that

must be given high priority, especially in the face of
the penetration of imported products into the local
economy.
Industries
like
agro-processing,
horticulture and textiles in which the NER has
natural comparative advantage must be expanded
using an employment-led strategy. Such a strategy
will not only result in augmentation of domestic
demand, but will also create a viable industrial base
that can service external demand. At the same time,
possibilities of setting up industries for producing
rubber goods, cycles and cycle parts,
pharmaceuticals, edible oils, petroleum products,
cement must be explored since the NER either has
the raw materials for their development and/or the
demand from the region and the countries around it
are large enough to sustain them.
6. Capacity building for officials, entrepreneurs, and
traders is needed for strengthening human resources.
This would help improve the quality and delivery
services in the region. State-level trade promotion
centres assisted by the apex industry associations
might be the right step for building capacities in the
region.

3. The Land Custom Stations exist in most of the border

trade points found that, inadequate infrastructure
and other facilities at these LCSs prevents in

XIII. CONCLUSION:
With the adoption of Look East Policy (LEP) in the early
1990s, economic engagement between India and Myanmar
has been steadily growing. This is particularly significant for
India as Myanmar is the land-bridge that connects India to the
dynamic economies of East and South-East Asia. With India
entering into economic partnership agreements with almost
all countries in this region, Myanmar has assumed added
importance. The change in Indias policy towards Myanmar
has paid rich dividends. Official trade between the two
countries increased steadily over the past decade, despite the
fact that the Border Trade Agreement of 1994 had put a cap

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Opportunities of Border Trade in North East India: With Special Reference to Indo-Myanmar Border Trade

on the number of items that could be traded through the local

trade points. Myanmar has benefited from the two-way trade,
as is evidenced by the large trade surplus that it has enjoyed.
India and Myanmar agreed to allow border trade in 22
commodities in the 1994 Agreement, which was expanded to
40 items in 2008, but this seems to have lost its relevance
particularly since informal/illegal trade has proliferated. The
low level of border trade at Moreh LCS can perhaps be
attributed to the unfavourable trading environment and the
lack of essential infrastructure and other facilities. These
barriers to border trade at Moreh LCS should be framed up
and a strategy should be taken to overcome the low-level trap
that India-Myanmar trade has fallen its downsizing its graph.

journals/ book volumes with ISSN & ISBN, text books and more than two
dozen popular articles till now. His areas of specialization are H.R.M.
(Human Resource Management) & Marketing and currently pursuing Ph.D
in the area of Eco-Tourism under the Dept. of Commerce, Dibrugarh
University, Assam. He is also associated as an Editorial board member of
few Research publications. One can get in touch with him at
[email protected]

REFERENCES
[1] Bhattacharya, Biswa and Prabir De (2006) Promotion of Trade
and Investment between Peoples Republic of China and India:
Toward a Regional Perspective, Asian Development Review,
Vol. 22, No. 1, Asian Development Bank, Manila.
[2] Goswami,H.and J.K Gogoi,( 2003): Regional Cooperation
between China, Myanmar, Bangladesh and India through
bilateral Trade: Impact on North East India, Assam Economic
Journal, Vol. XVI, Dibrugarh.
[3] Brunner, Hans-Peter W., ed., (2010) North East India Local
Economic Development and Global Markets, Sage Publications,
New Delhi.
[4] Canning, D. (2006), A Database of World Infrastructure Stocks,
1950-95, World Bank Policy Research Working Paper No. 1929,
World Bank, Washington D.C.
[5] Das, Gurudas (2005) Structural Change and Strategy of
Development: Resource-Industry Linkages in North Eastern
Region, 2005, Akansha Publishing House, New Delhi.
[6] Das, Gurudas and C. Joshua Thomas (2008), Indo - Bangladesh
Border Trade, Akansha Publishing House, New Delhi.
[7] De, Prabir (2008) Trade Transportation Costs in South Asia: An
Empirical Investigation in Douglas Brooks and David Hummels
(eds.) Infrastructures Role in Lowering Asias Trade Costs:
Building for Trade, Edward Elgar,
Cheltenham.
[8] Francois J et. Al. (2009) Pan-Asian
Integration: Linking East and South Asia,
Basingstoke: Palgrave Macmillan.
[9] Reserve Bank of India (2000), Barter Trade
with Myanmar under the Indo-Myanmar
Border Trade Agreement, A.P.(DIR Series)
Circular No.17, October 16.
[10] Straub, S. (2008), Infrastructure and
Development: A Critical Appraisal of the
Macro Level Literature, World Bank Policy
Research Working Paper 4590, World Bank,
Washington, D.C.
[11] Bhattacharya
Rahul
(2005),
Trade
Settlement Issues and Introduction of Letter
of Credit for Promotion of Indo-Myanmar
Border Trade, in Gurudas Das, N. Bijoy
Singh and C.J. Thomas (Eds), Arkansha
Publishing House, Delhi. pp. 228-245.

Rishi Bhargav Das (M.Com; UGC (NET); SLET) is serving as an Asst.

Professor in the Dept. of Commerce, Nowgong College, Nagaon, Assam. Till
now he has few publications to his credit which includes research papers/
articles published in reputed journals/ book volumes with ISSN & ISBN and
text books.

Anjan Kumar Bordoloi (M.Com; M. Phil; PGDMM; PGDCA; FDP-RM) is

serving as an Asst. Professor in the Dept. of Management, Margherita
College, Margherita, Assam. Till now he has numerous research publications
to his credit which includes research papers/ articles published in reputed

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