In Himalayas, there is a way but not a will for China-India trade

Deep in the Himalayas some three miles above sea level, Indian security forces and Chinese soldiers gaze at each other through a barbed-wire fence while trucks carrying goods from both sides pass through a large iron gate that marks the border.

The Nathula Pass, once part of the ancient Silk Road and later sealed after a 1962 war, was reopened in 2006 as a symbol of improved relations between Asian neighbours that account for more than a third of the world’s population. A decade later, however, it perhaps better reflects a trust deficit: the pass does not account for 1 per cent of bilateral commerce.

“Business is very slow here,” said Riku Doma, 42, a shopkeeper at a market close to Nathula who sells jackets, blankets and shoes in India. “I’m just managing to survive.“

Large sections of the road linking India’s state of Sikkim with Tibet are narrow and littered with potholes. The area has no warehouses to store goods nor any hotels. Only 56 low-end items can be traded, like tea, bicycles and canned food. And for about half the year, heavy snowfall forces authorities to close the border altogether.

The connectivity problems in the Himalayas, long a natural land barrier between India and China, extend to sea routes that account for the bulk of trade between the nations. A lack of quality roads around ports, insufficient warehouses, high tariffs and visa restrictions have contributed to a lopsided and lacklustre trade relationship. To help ease trade barriers, negotiators are meeting this week.

In the last four years, commerce between the ­nations has failed to match its peak of US$79 billion in 2011, according to data compiled by Bloomberg. China’s trade with the US has grown 21 per cent in that time to US$627 billion. Moreover, India has a trade deficit with China of nearly US$50 billion, its largest with any country.