Indo – Myanmar Border Trade is going through bumpy Rides

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Indo Myanmar Border Trade
Indo Myanmar Border Trade

Indo – Myanmar Border Trade is going through bumpy roads as trade has been stopped for a while due to blast and injury of Indian security personal.

The legalized border trade between Manipur and Myanmar was brought to a standstill on Thursday due to the 12-hour shutdown called by several voluntary organisations in the northeastern state.

All vehicles be it private or commercial; along the trans-Asian highway from Manipur’s capital Imphal to the border town of Moreh were off the road.

The shutdown was called to protest five bomb blasts triggered near Hollenphai village in Manipur on last to last Wednesday that injured three troopers of Assam Rifles. The troopers are, however, out of danger.

Tourists and traders had no option to leave Imphal on Thursday, many others, who were to return to the state capital, were stranded at Moreh.

Police sources at Moreh told IANS that there was no untoward incident during the strike.

People stayed back at home and security personnel patrolled the highway and village roads to maintain law and order.

Earlier when the ban on barter system thrown upon by government of India the trade took a jolt.

The ban on barter has almost shut down overland trade with India, local merchants say. Since the popular barter system was suspended at the Myanmar-India border post of Tamu, cross-border trade has nose drived.

On December 1,2015 India ended long-standing rules allowing border trade to be settled by an exchange of goods up to the value of US $20,000, including beans and pulses, spices, bamboo, forest products excluding teak, tobacco, and other commodities.

The move has had the effect of choking off trade, said an official of the Tamu Border Trade Chamber of Commerce in a meet during January 2016.

Though November trade exceeded the target by 120 percent, December trade reached only 70% of the target and so far in January the figure is only 35%.

One local dealer said, “Since the change, official trades have become rare.”

Explaining the ban, India’s central bank (Reserve Bank of India) said last month that barter trade was no longer necessary, as an adequate banking system was in place on both sides of the border.

However, banks on the Indian side were not yet issuing letters of credit, said U Khin Mg Tin, joint secretary of the Border Trade Chambers of Commerce Association, in Kalay last month.

Cash transactions are permitted. “But the dealers don’t trust each other,” said one Tamu dealer.

Since the beginning of the current financial year on April 1, 2015, as of January 16, total trade between India and Myanmar amounted to just over $1 billion, of which about $52 million passed via Tamu.

Myanmar has exported about $653 million to India, mostly in farming products, while importing about $412 million from India in consumer goods, raw materials and other merchandise so far this year.

Unofficial cross-border trade, however, continues, said U Myint Soe, secretary of the Ministry of Commerce’s Planning and Statistics Department, despite occasional rebel activity on the Indian side of the border.

Last year, the Tamu border crossing was repeatedly closed for days at a time because of clashes between the Indian army and rebels.

Statistics indicate that border trade with India accounts for less than 1% of Myanmar’s overland trade, the great bulk of which goes to China and Thailand.

Visa has been abolished earlier for border trade.

Scope for the trade is immense with Myanmar and government of India has also listed following facility for better and clear trade rules.

Items for Border Trade – Myanmar

Indo-Myanmar Border Trade allowed Items – (Total 40 items)

Sl. No. Old items
(DGFT Public Notice No. 289(PN)/92-97 dated 10th April, 1995)
Sl. No. Additional items
(DGFT Public Notice No. 106 (RE-2008)/2004-2009 dated 07.11.2008)
1. Mustard/rape seeds 23. Bicycle’s spare parts
2. Pulses and beans 24. Life saving drugs
3. Fresh vegetables 25. Fertilizers
4. Fruits 26. Insecticides
5. Garlic 27. Cotton fabrics
6. Onion 28. Stainless steel utensils
7. Chilies 29. Menthol
8. Spices (excluding nut-meg, mace, cloves and cassia) 30. Agarbatti
9. Bamboo 31. Spices
10. Minor forest produce (excluding teak) 32. Cosmetics
11. Betel nuts and leaves 33. Leather footwear
12. Food items for local consumptions 34. Paints and varnishes
13. Tobacco 35. Sugar and salt
14. Tomato 36. Mosquito Coils
15. Reed broom 37. Bulbs
16. Sesame 38. Blades
17. Resin 39. X-ray paper and Photo paper
18. Coriander seeds 40. Imitation jewellery
19. Soya bean
20. Roasted sunflower seeds
21. Katha
22. Ginger

 

In addition, DGFT has clarified (vide Policy Circular No. 53 (RE –99)/1997-2002 Dated: 29.02.2000) that in addition to the provisions contained in the above mentioned Public Notices, the ‘normal trade’ in all other commodities between two countries through Land Customs Station at Moreh is also permitted subject to payment of custom duties as applicable on international trade with any other country of the world.

“Normal” Trade at Myanmar Border

Simultaneous Conduct of Border Trade and MFN Trade (Normal Trade) at Indo-Myanmar Border, Moreh and Zawkhathar

  1. On the Indo-Myanmar border, border trade at concessional rate and with certain conditions is permissible for 40 bi-laterally agreed items.  In addition, normal/MFN trade is also permitted.
  2. DGFT has clarified (vide Policy Circular No. 53 (RE–99)/1997-2002 Dated: 29.02.2000(5.5 KB))that in addition to the provisions contained in the DGFT Public Notices Notification No. 9/95-Customs dated 6.3.1995(12.21 KB) (for 22 items for border trade on Indo-Myanmar border) & Notification No. 62/2010-Customs dated 12.5.2010(54.35 KB) (for additional 18 items), ‘normal trade’ in all other commodities between two countries through Land Customs Station at Moreh is also permitted subject to payment of custom duties as applicable on international trade with any other country of the world.
  3. OM No.570/04/2003-LC dated 18.10.2010 of Shri M Satish Kumar Reddy, Director (ICD), Central Board of Excise & Customs, Department of Revenue  on “Conversion of border trade into normal trade at Indo-Myanmar Border Trade Points.”

“The undersigned is directed to refer to Department of Commerce OM No.9/3/2009-FT(EA) dated 28.9.2010 on the above subject and to state that Moreh and Zawkhathar Land Customs Stations have been notified under Section 7 of the Customs Act, 1962 without any restriction regarding the mode of trade. Notification 9/95 Customs as amended by Notification 62/2010 Customs allows a concessional rate of duty of 5% ad valorem only on 40 items specified in the notification. However, normal trade can take place through the above LCSs as per the prevailing Foreign Trade Policy provisions and on payment of duty at applicable rates.”

  1. Thus, while border trade is carried out at a concessional duty of 5% on 40 identified items, normal/MFN trade is also permitted in Moreh and Zawkhathar.
  1. Entry without Visa to Myanmar

Limited Facilities for Entry to Myanmar by Local People Residing in Areas

Adjacent to The International Border

To facilitate limited movement of hill tribes residing along the Indo-Myanmar border, the Governments of India and Myanmar have permitted entry of such persons residing within 16 km of the international border with only permits but without visa with certain terms and conditions. Local nationals of both sides can stay in the other country for three days within 16 km on either side.

Click here to see Gazette Notification No. G.S.R 611(E) of Ministry of Home Affairs dated 21.7.2010.

Hope soon these small nails will be removed and trade will start shine again.