Northeast India–Bangladesh Border Trade Practices
| Date | 01 February 2015 |
| DOI | 10.1177/0015732514558152 |
| Author | Gautam Dutta |
| Published date | 01 February 2015 |
| Subject Matter | Commentaries |
Northeast India–
Bangladesh Border
Trade Practices:
Characterization of
Trade and Effectiveness
of Border Trade Points
Gautam Dutta1
Abstract
In the recent years the geographical land-lockedness of the northeast India (NEI)
is being looked upon differently. Efforts are being made to convert the region
into the ‘land linked’ from the ‘land-locked’ so that it can make faster economic
progress through effective utilization of contiguous markets of Bangladesh,
Myanmar and beyond. Policy level initiatives are rolled out so that NEI, as a
whole, does not remain a burdensome periphery to the country. This article,
against the aforesaid background, characterizes the trade interweaving between
three states of NEI and Bangladesh and empirically identifies the commodities
responsible for constituting trade flow and its variation over a long period of
time in respect of concerned NEI states. This article indicates that commodity
diversity in NEI–Bangladesh trade has been very minimal though volume of trade
increased over the years. The rise of exports from Assam and Meghalaya are
almost totally dependent on trade of natural resources like coal and limestone.
Characteristically, the trade pattern between Tripura and Bangladesh is differ-
ent from the other two states of NEI where commodity diversity is more. In
addition, only few trade points (land customs stations) across the international
border are handling the bulk of trade while others are not used at all.
JEL: F14, R11
Keywords
Cross-border trade, commodity composition
Commentary
Foreign Trade Review
50(1) 53–68
©2015 Indian Institute of
Foreign Trade
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0015732514558152
http://ftr.sagepub.com
Corresponding author:
Gautam Dutta, Faculty Member, Indian Institute of Foreign Trade, Kolkata campus, J1/14 EP&GP Block,
Sector–V, Salt Lake, Kolkata, India.
Email: gautam@iift.ac.in
1 Indian Institute of Foreign Trade, Salt Lake, Kolkata, India.
54 Foreign Trade Review 50(1)
Introduction
Till 1990s the northeastern region of India, that is, northeast India (NEI), com-
prising of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland
and Tripura, was perceived to be in a disadvantageous position so far as external
trade linkage is considered because of its geographical land-lockedness. The
entire economic developmental thrust, therefore, was directed towards increas-
ing connectedness of the region with the central heartland. However, courtesy
look east policy, the land-lockedness of the region was started to look at differ-
ently. This region, perhaps, made other parts of the country envious when its
external land-linkedness was considered. Out of the seven countries with which
India shares landed border, four countries like Bangladesh, Bhutan, China and
Myanmar have land border with the northeastern region. All the seven states of
the region are located on the international border and the region is very close to
the vibrant economies of Southeast and East Asian countries (Das, 2000). With
a well thought out long-term policy, this region has all the potential to emerge
as a strategic base for domestic and foreign investors to tap the potential of
contiguous markets of China, Myanmar, Bangladesh, Laos, Thailand, Vietnam,
Cambodia, Malaysia, Indonesia and beyond (Islam, 2011). The S.P. Shukla
Commission set up for development of the region (1999) in their report also
echoed the same possibility—‘the Northeast is no more a burdensome periph-
eral somewhere out there, but is poised to resume its dynamic role as a bridge to
the booming economies of South East Asia and China for mutual benefit’. Now
it is being argued that its land-linkedness should be leveraged gradually but
noticeably so that the 98 per cent external connectivity keeps on providing more
economic benefits than its 2 per cent connectivity with India (Maiti, 2002). The
possibilities of enhanced trade linkages between India and land linked countries
or further to Southeast Asia through NEI states using land routes are further
backed by favourable factors like nearness, shorter delivery schedules, consid-
erable Indian influences, growing Indian investment in these countries etc. All
these made the NEI enthused of the possible benefits the entire region will be
having with the reversal of developmental approach from land-lockedness to
land-linkedness (Dutta & Bayes, 2004). In this game changing plan, the coun-
tries with common international border with NEI like Bangladesh, Myanmar etc
are very important. Out of them Bangladesh has much significance as four-NEI
states, namely, Assam, Meghalaya, Tripura and Mizoram, all together share a long
common border with Bangladesh (Government of India, 2000). Also there exist a
host of complementariness between Bangladesh and India to have synergistic
effect on cross-border trade-based linkages. However, with bilateral trade between
India and Bangladesh only hovering around 0.5 to 0.6 per cent annually of India’s
total trade does cast a shadow on the ability of NEI in successful tapping of oppor-
tunities arising out of its land connectedness internationally (Baruah, 1998).
Therefore, at this juncture it is pertinent to know and understand the character-
istics of trade interweaving between NEI and Bangladesh in a more comprehen-
sive way. What volume of trade actually was due to NEI out of the total India’s
bilateral trade with Bangladesh? How they are distributed across the different
states of NEI? In addition, an important aspect in developing external trade
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