Ministry of Development of North Eastern Region, North East India

What is Border Trade?

General Introduction to Border Trade (source: Department of Commerce)

North Eastern India shares land border with Bangladesh, Bhutan, China, Myanmar and Nepal and has agreements of overland trade with these countries through Land Custom Stations notified under Section 7 of the Customs Act, 1962. While for trading through LCSs situated on Bangladesh and Bhutan border, there is a Free Trade Agreement (SAFTA), Border Trade Agreement have been entered into with China and Myanmar.
Border trade is different from trade through air, land or sea ports as trade through ports involves clearance through customs and has large volume. Border trade in contrast is "over-land trade" by way of "exchange of commodities" from a bi-laterally agreed list by people living along both sides of the international border.
For permitting locally produced commodities, to be traded as per prevailing customary practices on both sides of the India-Myanmar border, an agreement on border trade between India and Myanmar was signed on 21st January, 1994 and operationalized on 12th April, 1995. The Agreement envisages that the border trade will take place through Custom Posts at Moreh in Manipur and Zowkhathar in Mizoram, corresponding to Tamu and Rhi in Myanmar. 40 items are permitted for the border trade between India and Myanmar, with 5% duty. Presently, most of the border trade takes place only through the Moreh Post. The details of the border trade between India and Myanmar during the last 5 years are as under:

Border Trade (Rs. In crore)

Year	Export	Import	Total
2006-07	6.13	2.69	8.82
2007-08	4.94	1.35	6.29
2008-09	1.61	0.76	2.37
2009-10	24.5	8.32	32.82
2010-11	0.26	3.80	4.16

Border trade with Myanmar is quite limited and is generally averaging less than US $ 1 million per year.
Border trade at Nathu La Pass, Sikkim with China is duty free.
Details are in following sections.

Border Trade Datamation

Border Trade Data for NER FY 2010-11 (Rs. in lakhs) (Source: Central Board of Excise & Customs, Department of Revenue)

Sl. No	Name of LCS	Value of Export	Value of Import	Net Revenue Collected	Top five commodities Traded		No of cargo vehicles
Sl. No	Name of LCS	Value of Export	Value of Import	Net Revenue Collected	Import	Export	Import	Export
Office of Chief Commissioner, Central Excise & Customs, Shillong Zone
1	Sutarkandi	1954	3073	247	Cement, Misc food item and plastic items	Coal & quick lime	2182	9238
2	Karimganj Steamer & Ferry Station	822	67	12	Knitted & crocheted synthetic fabric	Ginger, Oranges, dry fish and other citrus fruits	-	-
3	Mankachar	11	253	45	Cement, Vest, Cloak & Religious Book	Coal, Boulder Stone	374	598
4	Bosora	16768	Nil	2	Nil	Coal & Lime stone	-	130493
5	Bholaganj	22373	Nil	1	Nil	Lime Stone, Boulder stone & Quartz stone	-	116493
6	Dawki	9720	0.1	92	Food Items, Fire clay, & bricks	Coal, Lime stone, Raw hides, quartz stone, stone boulders seasonal fruits,& vegetables	17	45644
7	Shellabazar	829	Nil	13	Nil	Lime stone & boulder stone	-	-
8	Bagmara	385	Nil	2	Nil	Coal	-	3550
9	Dalu	1890	296	49	Cement. Syn, Fabrics	Coal	509	10217
10	Ghasuapara	6701	Nil	9	Nil	Coal	-	10217
11	Mahendraganj	362	449	63	Cotton waste, synthetic fabric, food product	Coal. Crushed stone, Boulder stone. Dry fish, ginger	390	1523
12	Agartala	157	20352	1528	Stone, cement, fish, PVC pipes,& furniture	Other craft paper, vulcanized rubber tread, acmesip & mango classic	37978	48
13	Srimantapur	6	2488	391	Stone, Cement, Plastic sheet of polymers	Raw hides, woven fabrics & synthetic filament	-	-
14	Khowaighat	Nil	306	42	Stone & cement	Nil	-	-
15	Manu	2	459	85	Broken stone, Bricks & Cement	-	-	-
16	Muhurighat	Nil	1838	306	Stone, Bricks & Cement	Nil	-	-
17	Old Raghnabazar	5	68	12	Textile items, cotton vest & others	Citrus fruits	-	-
18	Moreh	26	380	36	Betel nut	Cumin seed	-	-
19	Hatisar	4916	39	Nil	Rectified spirit SKO, HSDO,MSLPG, Rice & Oranges	Plywood / Block Board & Bhutanese Liquor	250	4512
20	Zokhawthar	Nil	4	0.4	Betel nuts	Nil	-	-

Border Trade Committee

Items for Border Trade - Myanmar

Indo-Myanmar Border Trade Items (Total 40 items)

Sl. No	Old items
(DGFT Public Notice No. 289(PN)/92-97 dated 10th April, 1995)
1	Mustard/rape seeds
2	Pulses and beans
3	Fresh vegetables
4	Fruits
5	Garlic
6	Onion
7	Chilies
8	Spices (excluding nut-meg, mace, cloves and cassia)
9	Bamboo
10	Minor forest produce (excluding teak)
11	Betel nuts and leaves
12	Food items for local consumptions
13	Tobacco
14	Tomato
15	Reed broom
16	Sesame
17	Resin
18	Coriander seeds
19	Soya bean
20	Roasted sunflower seeds
21	Katha
22	Ginger

Sl. No	Additional items
(DGFT Public Notice No. 106 (RE-2008)/2004-2009 dated 07.11.2008)
23	Bicycle's spare parts
24	Life saving drugs
25	Fertilizers
26	Insecticides
27	Cotton fabrics
28	Stainless steel utensils
29	Menthol
30	Agarbatti
31	Spices
32	Cosmetics
33	Leather footwear
34	Paints and varnishes
35	Sugar and salt
36	Mosquito Coils
37	Bulbs
38	Blades
39	X-ray paper and Photo paper
40	Imitation jewellery

In addition, DGFT has clarified (vide Policy Circular No. 53 (RE -99)/1997-2002 Dated: 29.02.2000) that in addition to the provisions contained in the above mentioned Public Notices, the 'normal trade' in all other commodities between two countries through Land Customs Station at Moreh is also permitted subject to payment of custom duties as applicable on international trade with any other country of the world.

"Normal" Trade at Myanmar Border

Simultaneous Conduct of Border Trade and MFN Trade (Normal Trade) at Indo-Myanmar Border, Moreh and Zawkhathar

On the Indo-Myanmar border, border trade at concessional rate and with certain conditions is permissible for 40 bi-laterally agreed items. In addition, normal/MFN trade is also permitted.
DGFT has clarified (vide Policy Circular No. 53 (RE-99)/1997-2002 Dated: 29.02.2000 that in addition to the provisions contained in the DGFT Public Notices Notification No. 9/95-Customs dated 6.3.1995 (for 22 items for border trade on Indo-Myanmar border) & Notification No. 62/2010-Customs dated 12.5.2010 (for additional 18 items), 'normal trade' in all other commodities between two countries through Land Customs Station at Moreh is also permitted subject to payment of custom duties as applicable on international trade with any other country of the world.
OM No.570/04/2003-LC dated 18.10.2010 of Shri M Satish Kumar Reddy, Director (ICD), Central Board of Excise & Customs, Department of Revenue on "Conversion of border trade into normal trade at Indo-Myanmar Border Trade Points."
The undersigned is directed to refer to Department of Commerce OM No.9/3/2009-FT(EA) dated 28.9.2010 on the above subject and to state that Moreh and Zawkhathar Land Customs Stations have been notified under Section 7 of the Customs Act, 1962 without any restriction regarding the mode of trade. Notification 9/95 Customs as amended by Notification 62/2010 Customs allows a concessional rate of duty of 5% ad valorem only on 40 items specified in the notification. However, normal trade can take place through the above LCSs as per the prevailing Foreign Trade Policy provisions and on payment of duty at applicable rates."
Thus, while border trade is carried out at a concessional duty of 5% on 40 identified items, normal/MFN trade is also permitted in Moreh and Zawkhathar.

Items for border trade - Nathu La

Trade Between India and China Through Nathu La Pass (SIKKIM)

The traditional trade between India and China through Nathu La Pass in Sikkim commenced from 6.7.2006. Import and export of locally produced commodities by people living along both sides of Indo-China border as per prevailing customary practices are allowed.

Commodities allowed under border trade between India and China (at Nathu La Pass) notified vide Public Notice No. 5-ETC(PN)/92-97 dated 20.7.1992:

Items exempted from duty when imported into India from China through border trade:

1	Goat Skin
2	Sheep Skin
3	Goats
4	Horses
5	Sheep
6	Wool
7	Raw Silk
8	Yak Tail
9	Yak hair
10	China clay
11	Borax
12	Szaibelyite
13	Butter
14	Goat Cashmere
15	Common Salt

Items freely exportable to China in border trade:

1	Agricultural implements
2	Blankets
3	Copper products
4	Clothes
5	Textiles
6	Cycles
7	Coffee
8	Tea
9	Barley
10	Rice
11	Flour
12	Dry fruit
13	Dry and fresh vegetables
14	Vegetables
15	Gur and Misri
16	Tobacco
17	Snuff
18	Cigarette
19	Canned food
20	Agro-chemical
21	Local herbs
22	Dyes
23	Spices
24	Watches
25	Shoes
26	Kerosene Oil
27	Stationery
28	Utensils
29	Wheat

Click here for Department of Commerce Public Notice No.20(RE-2006)/2004-2009 dated 13.6.2006.
There is no duty on these 40 items unlike on the Indo-Myanmar border where 5% duty is levied. Other conditions of trade are as follows:
Border trade markets shall be open from 1st June to 30th September every year.

Border trade markets will be open from Monday to Thursday every week-four days in a week and from morning 7:30 am to afternoon 3:30 pm Indian time and 10 am to 6 pm Chinese time would be the timings for the border trade.

A permit fee of Rs.50 each will be levied for every vehicle entering Sikkim side from China. Similarly, a fee of 5 yuans (Rs. 5 equal to one Yuan) will be levied for every vehicle crossing over to the Chinese side upto the trade mart point at Renqinggang.

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