Trading in Trouble

After the initial attention and media fanfare in 1995, perhaps not to the degree as the re-opening of the silk route between Sikkim and China-occupied Tibet, it has taken almost a decade for the government of Manipur to get Myanmar to provide letter of credit (LOC) facilities to traders operating across the international border between Moreh in India and Tamu on the other side. "It was difficult convincing the military junta but they finally agreed last month," says Raj Kumar Nimai, special secretary, department of commerce and industry, Manipur. If all goes well, weigh bridges and warehouses that have been lying ready, and idle, for many months now, will have to wait for another four before the first shipments come in.

That has quite been the situation in the North-east which shares its borders with Myanmar, China, Bangladesh and Bhutan. Where trade does exist, it has normally been a hotchpotch, with illegal business normally far outweighing the legal. “In Tripura, the ratio stands at 10:1,” says Tripura Chief Minister Manik Sarkar.

A sampling of trading points between the north-eastern states and India’s neighbours in the east; and their attendant ills of ‘international business’ in the region:


Letter of credit facility yet to be in place on Moreh border, even after 10 years of the trade agreement between India and Myanmar. So far, traders have had to settle for a barter system, which ironically also includes the 22 traditional items originally listed by the Union government. The Myanmar Economic Bank at Tamu is expected to tie up with the United Bank of India at Moreh. Meanwhile, border trade that stood at Rs 57 crore in 1997, fell to Rs 10 crore after half-baked regulations were put in place, keeping away the big traders from the area. Officials now expect trade to rise to Rs 90 crore once the LOC system is in place.

The area has served as a safe haven for gun-runners and drug dealers, even as substance-abuse related HIV became a major killer in Manipur. According to reports, members of the United Wa State Army, a Myanmar-based ethnic militant group, have now begun running narcotics and guns from across the border in Tamu. The more innovative among the Wa militants have set up bars and karaoke parlours close to the post. Moreh is also the favourite haunt of rebels from the NSCN (K) and Kuki National Army, now locked in a feud to control the narcotics trade. Illegal goods seized by Customs officials in Moreh last year amounted to more than Rs 4 crore, while legal business stood at only Rs 9 crore.

Given the chaos, the Union commerce ministry was forced to close down three out of the four gates in the sector after receiving complaints from several trade organisations in the region.

“Drugs will continue to come in with the kind of money involved,” says Nimai. “All we can do is somehow decrease the quantity by improving our intelligence network. Where insurgency is concerned, all we can do is hope for the best.”


Despite a trade agreement that came into effect in 1995, the state’s trading points with Myanmar at Champai have been lying defunct, with the Myanmarese side insisting on first developing Moreh in Manipur. The border is meanwhile being used to smuggle in Chinese goods into India.


Official border trade, that began on the Akhaura post after an agreement in 1995, is now worth about Rs 11 crore annually, while illegal trade in the area is about 10 times the amount. Tripura sells products such as fresh fruit across the border, while fish from as far as Andhra Pradesh is sold to Bangladesh here.

Nothing substantial has happened in the state despite the fact Tripura shares 84 per cent of its border with Bangladesh. Most important cities of Bangladesh are within 75 km from Tripura. Chittagong port is only 75 km away.


The trading point with Bhutan at Daranga has for years now been relegated to a record-keeping exercise. Prostitutes and insurgents have crossed the border at will. Till a few years ago, Daranga Mela on the Indian side was a notorious red-light area.

The jungles of Bhutan now house the biggest network of ULFA camps. Assam, meanwhile, has been swamped by illegal migrants from Bangladesh. Smugglers take across cattle from India to Bangladesh for beef.

By Kuntil Baruwa & Amit Ray Chaudhuri (