Tripura: Now, US-Canada like smart border to enhance trans-border business

Tripura Deputy Chief Minister Jishnu Dev Varma emphasized the need for adoption of a ‘Smart Border’ management – like that of US-Canada for geo-economics interests of the North East region as he advocated strongly on the promotion of cross-border trade and development cooperation with the neighbouring countries, especially Bangladesh and Thailand.

He was addressing a Webinar organized by the CII titled “Doing business with Neighbours: Post COVID-19 Outlook and Strategy”.

“The establishment of cross-border connectivity through sub-regional cooperation with neighboring countries, strengthening of cross-border sub-regional value chains, and encouraging cross-border market integration appears to be the appropriate development strategies for the NER”.

“The development of India’s NE region has long been a major challenge to policymakers both at the state and the centre”, said the Deputy Chief Minister.

“Neither the State-led development model followed till 1990 nor the market-led development initiative followed since 1991 could bring any respite for this landlocked region. The peripheral geographical location of the region stood in the way of her progress”, he said adding that, however, under the present these challenges are today being practically addressed.

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Dev Varma stressed on the need of promoting cross-border trade and economic cooperation which he felt would have immense implications for the development of the North East as it shares 98 percent of its international borders with the neighbouring countries and is connected with the mainland only through a narrow strip of land - ‘Chicken’s Neck’.

He pointed out that more than 90 percent of NER’s trade flows to Bangladesh while her formal trade with Bhutan and Myanmar was ‘abysmally low’.

“The reason for the overwhelming predominance of NER’s trade with Bangladesh lies in their complementary structure of resources between the two regions. While the hills of NER are rich in minerals like coal and limestone; horticultural products such as vegetables, ginger and turmeric; forest products such as honey, broom grass, betel nuts, and so on, the plains of Bangladesh lack them. As a result, there exists a strong basis for trade between them”.

“NER’s natural resources are swapped for Bangladeshi manufacturing goods. As an example: While limestone is being exported across the border of Meghalaya to cement factories in from Bangladesh, manufactured cement is being imported through different land ports in Tripura. In the same manner, various fruits and vegetables are being exported to Bangladesh. Processed food products from these raw materials are being imported in NER”, the Deputy Chief Minister said. He continued pointing out that NER was not adding any value before the exports her resources to Bangladesh; rather, business and industry in Bangladesh benefit through value addition.

“This is because of cheaper labor and better infrastructural facilities there compared to NER”.

On the other hand, he said, the competitive resource structure between the NER and Bhutan and Myanmar ‘does not provide any firm basis for trade. Whatever trade flows through the land ports of NER to these two countries is essentially transit trade which is not produced in NER but in other states of India’.

He said, “in 2016, Myanmar drew about 34.42 percent of her total imports from China, while for India was only 6.97 percent, making the Chinese market 4.94 times attractive compared to India. What is noteworthy is that Thailand has made substantial inroads in Myanmar from which the Thai economy is being immensely benefited. NER and Myanmar have competitive resource bases and hence there is hardly any strong basis for trade between them”.

As a result, unlike trade between NER and Bangladesh, which is quite robust and growth generating as the resource bases between them are complementary. The challenge before NER and Myanmar trade lies in transforming it from transit to growth-generating trade through linkages between trade and local resource bases.

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He also emphasized the need of using the India–Myanmar–Thailand (IMT) Trilateral Highway as a sub-regional cooperation initiative to give a boost to the North East’s development in line with India’s Act East Policy. Dev Varma then cited the examples of pineapple, ginger, and others to drive his point home.

As an example, he said, “supplying pineapples to Thailand via the IMT highway will be a win-win situation for both the countries. This resource (in NER)-industry (in Thailand) linkage will ensure remunerative prices for the farmers as well as profit margins for the intermediaries, leading to a rise in the level of their income”.

“A Study of 2017 shows that traders might reap about 90 percent of returns on their investment even after paying nearly double the farm gate price”

He especially emphasized on the Transit Route through Bangladesh, Once a transit corridor through Bangladesh is used, the distance between Agartala and Kolkata is reduced by 73 percent. The people of the state of Tripura will not only enjoy lesser transportation costs due to the shortening of distance but will also save about 80 percent in travel time. From Bangladesh’s point of view, as the territory of Bangladesh lies between the NER and mainland India, they can make commercial use of their unique location by providing transit services to India. This will also be beneficial for Bangladesh by way of transit fees from international exports through the Port of Chittagong.

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