Indo-Myanmar border trade via Moreh : Formal trade ceases, informal trade flourishes
Source: The Sangai Express
Imphal, July 05 2018:
Indo-Myanmar border trade which was opened as per an agreement signed between the two countries on January 21, 1994 has ceased since the last week of January this year but informal trade through Moreh Gate No 2 has been going on as usual.
It has been almost six months since the formal border trade ceased completely after customs duty imposed on betel nuts was hiked all of a sudden, informed a source.
Notably, Indo-Myanmar border trade was opened for 22 items on barter system since April 10, 1995 as per an agreement signed between the countries on January 21, 1994.The volume of trade at that time was 20,000 US Dollar per transaction.
18 items were added to the cross border trade in November 2007 followed by 22 other items in 2012.As the volume of the cross border trade grew considerably in tandem with the increased number of trade items, the border trade was converted into normal trade in 2015 .
After the trading pattern was converted into normal trade, restrictions on the volume of trade as well trade items were lifted.
As per the terms and conditions of the agreement, trading items should be restricted to only those items produced/manufactured by the two countries.
If any item is produced/manufactured in a third country, it should be assembled or packaged in either India or Myanmar.
The item's label too should be of either of the two countries, said the source.
The question of items sanctioned for trading between the two countries became irrelevant after the cross-border trade was declared as normal trade.
After about one year of normal trade, customs duty imposed on betel nuts was hiked from 5 per cent to 40 per cent by a notification issued on January 27, 2017 .
The principal item imported by Indian traders from Myanmar through Moreh is betel nut.
As the customs duty imposed betel nuts suddenly surged from 4 per cent to 40 per cent, Indian traders could no longer import the particular item and it led to complete cessation of normal trade since January this year, informed the source.
Even though the Border Trade and Chamber of Commerce, Moreh Town had written to the Union Industries and Commerce Minister to revert the customs duty imposed on betel nuts to 5 per cent, there has been no response till date.
Myanmar is categorised in the list of least developed countries.
By virtue of being listed in the least developed country category, India implements a tariff scheme known as Duty Free Tariff Preference when it imports agricultural items from Myanmar.
In accordance with this scheme, India should impose customs duties of only 2 per cent to 20 per cent on all agricultural commodities imported from Myanmar and betel nut is included in the category of agricultural commodity.
As such, imposition of 40 per cent customs duty on betel nuts imported from Myanmar is a blatant violation of the Duty Free Tariff Preference scheme, the source added.