RBI ban on border trade restricts growth
Source: The Sangai Express

Imphal, December 17 2012: Although India and Myanmar have shared a border trade for the last 17 years, no significant growth could be seen so far due to the restrictions imposed by Reserve Bank of India under Foreign Exchange Management Act, 1999 .

Not only seen as a hurdle to the border trade between India and Myanmar, the restriction by RBI has also reduced the border trade to barter trade between the two neighbours, an official source confided.

Following a trade agreement signed between India and Myanmar on January 21, 1994, trade between Moreh and Tamu commenced in 1995.Though the border trade has been for the last 17 years, no significant progress is seen.

A provision restricting the border trade between India and Myanmar to barter trade was included in a circular issued by the Exchange Control Department of RBI on October 16, 2000, the source disclosed.

Accordingly, the provision that imports from Myanmar to India should precede export from India to Myanmar was also included in the RBI circular.

Confiding that the State Government has been kept in the dark about the circular issued by the RBI, the source revealed that the RBI circular also restricted the barter trade to land route wherein transactions of the trade should take place by way of head load or non-motorised transport system.

It has also been reportedly stated in the circular that there would be no monetary transaction under the barter trade agreement while also adding that consignments of imports and exports should be invoiced in USD.

The RBI circular also stated that the value of goods exported under barter trade should not exceed USD 20,000 per transaction.

Meanwhile, the State Industries and Commerce Minister Govindas Konthoujam has urged the RBI to lift the restrictions imposed on the border trade between India and Myanmar today during the ASEAN Trade Ministers Conference held at Guwahati that was also attended by Union Commerce Minister Annu Sharma.

As per an order issued by Director General of Foreign Trade last month, the trade items have been increased from 40 by adding 22 new commodities.

It has also been reported that the import at Moreh Gate No 1 has reached Rs 10.76 crore by November this year from Rs 1.88 crore in the financial year 2011-12 .

The export increased from Rs 1.49 cr in 2011-12 to Rs 8.31 cr.

The added items included agriculture machinery, bicycle, bleaching powder, coal, edible oil, electrical and electric appliances, fabricated steel products, garments, handloom and handicraft items, hardware and electrical fittings, lime medicines, milk powder, tea, edible oil, beverages, motor cycles and spare parts, musical, stationary, torch lights; plastic, rice, and wheat scented tobacco, semi precious stone, sewing machines, textile fabrics, three wheelers/cars below 100cc.It is also necessary that the Custom authority should notify the implementation of such trade items from time to time, the source added.

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