Intensity and Pattern of Border Trade in India’s Northeast
| Author | Pradyut Guha,Rangalal Mohapatra |
| Published date | 01 August 2016 |
| Date | 01 August 2016 |
| DOI | 10.1177/0015732516646214 |
| Subject Matter | Commentary |
Intensity and Pattern
of Border Trade in
India’s Northeast
Pradyut Guha1
Rangalal Mohapatra1
Abstract
Besides Look East policy, various regional and subregional initiatives by Indian
government are expected to help the promotion of trade for strategically
located northeastern states. However, the pattern of formal trade with the bor-
dering nations has not been observed to be favourable for all the states of India’s
northeast. An attempt has been made in this study to examine the land custom
station-wise and northeastern state-wise pattern and volume of trade with the
bordering nations.
JEL: F1, F100
Keywords
LCS(Land Custom Station), NER(North Eastern Region), BOT(Balance of Trade)
Introduction
Economic integration via trade goes back to the study by Viner (1950) which later
on was redefined by Ohlin (1967) to overcome the non-spatial structure of trade
models, by integrating theories of location and international trade. A strong rela-
tionship of trade liberalization and economy of bordering region was mentioned by
Hanson (1996, 1998) and Gruber (2013). With an area of 262,185 sq. km (8 per cent
of the total geographical area of the country), the northeastern region (NER) shares
98 per cent of its geographical boundary with foreign nations.1 Over the past sev-
eral years, a number of regional and subregional initiatives2 have been undertaken
by India besides adopting the ‘Look East’ policy for deepening her economic
Foreign Trade Review
51(3) 248–265
©2016 Indian Institute of
Foreign Trade
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0015732516646214
http://ftr.sagepub.com
Corresponding author:
Pradyut Guha, Assistant Professor, Department of Economics, 7th Mile, Near Orange Villa Resort,
Sikkim University, P/o Samdur, Sikkim 737102, India.
E-mail: pguha@cus.ac.in
1 Assistant Professor, Department of Economics, Sikkim University, Sikkim, India.
Commentary
Guha and Mohapatra 249
cooperation with the Southeast Asian economies. Given the human and natural
resource potential, the strategic location of the region is important in the promotion
of trade and commerce which is indirectly expected to accelerate economic devel-
opment of the region. At this backdrop, the present study made an attempt to under-
stand the existing pattern and volume of merchandize trade through formal channel
between India and neighbouring countries of northeastern (NE) states.
Although trade openness is not a sufficient condition for trade promotion, it
can help in revival of trade condition in India particularly in the NER (Chakraborty,
2011). Mirza and Bacani (2013) expressed the need for greater coordinated effort
through bilateral or multilateral channels to realize the full potential of trade in
South Asia. Gogoi (2014) mentioned the emerging trends of regional cooperation
and looking east can help in harnessing the comparative advantage of upliftment
of international trade and economic growth of this region. Bezbaruah (2000) and
Rahman, Moazzem, Chowdhury and Sehrin (2014) studied the potential benefits
of trade cooperation with South and Southeast Asian economies for India and for
bordering economies of NER specially. Hussain (2014) mentioned that develop-
ment initiatives in the Mekong region can help the expansion of trade and com-
merce of India with Bangladesh, China and Myanmar. Improved India–Myanmar
relations formed the first and critical step in India–Southeast Asia ties while
improving security in the NER and paving the way for future economic develop-
ment in the region (Bahroo, 2005).
But informal and unofficial trade is emerging in this region (Baruah, 2000;
Bezbaruah, 2007; Das, 2000; Dutta, 2000; Gogoi, 2004), a part of which may be
illegal, which needs to be prevented (Kumar, 2000). Vigilance on informal trade
(Hussain, 2000) and economic and legal adjustment (Bezbaruah, 2000) can be two
wise ways to do so. Normalization of political unrest in Myanmar (Yhome, 2009)
and an improvement of quality of infrastructure (Baruah, 2000; Bhattacharya,
2000; Saikai, 2013) are two different aspects that can help in promoting trade rela-
tions with India through the NER.
Objective of the Study
The present study makes an attempt to understand the pattern of India’s trade com-
plementarities with Association of Southeast Asian Nations (ASEAN) and South
Asian Association for Regional Cooperation (SAARC) in general and with bordering
nations of NE states in particular. The state-specific volume of border trade of NER
with its neighbouring countries via different land custom station (LCS) point and
some of the challenges of border trade faced are being examined in this article.
Data Source
The present study is based on secondary data. The International Trade Centre
(ITC) calculations of United Nations Commodity Trade Statistics Database (UN
COMTRADE) Statistics (various issues) data have been used for examining the
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