Traders in dark about RBI rules

Information on abolition of barter has not reached Moreh: Study

  • Published 13.07.16
The border gate at Moreh. File picture

Guwahati, July 12: Traders at Moreh on the Indo-Myanmar border are still unaware that barter trade, a major constraint on border trade, has been abolished.

The Reserve Bank of India (RBI) in November last year had passed a circular, putting a halt to this traditional form of trading. It stated that Indo-Myanmar trade through border would no longer take place through barter and it would switch over completely to normal trade with effect from December 1 last year.

"Barter trade was initially permitted to facilitate exchange of locally produced commodities along the Indo-Myanmar border. Since these transactions were not captured in the banking system or reflected in trade statistics. However, over a period of time, the trade basket has diversified and adequate banking presence is in place to support normal trade with Myanmar," the RBI order dated November 5 stated.

A study, "Enhancing India-Myanmar Border Trade Policy and Implementation Measures", brought out by the ministry of commerce and industry and research and information system for developing countries which was released last month said information regarding transition to normal trade had yet not reached the traders in Moreh.

"They still believe border trade is permitted in the 62 items that were previously allowed and are not yet aware about the switch to normal trade. This acts as a major constraint on border trade," it said.

It said border trade between India and Myanmar through land routes does not get governed by just the border trade agreements.

Two important developments have taken place since the operationalisation of border trade agreement. This included a shift from barter to normal trade and another shift from border trade to normal trade that can take place through land border.

According to the directorate general of foreign trade public notice no. 50 issued on December last year, it has been decided that border trade at Moreh, Manipur, would be upgraded to normal trade to promote bilateral trade between the two countries.

The report said the public notice only mentions Moreh while the policy regime for other land customs stations like Zokhawatar in Mizoram and other trading points remains unclear. Land customs stations are gateways for transit of goods, services and human beings between neighbouring countries.

The issue of currency settlement remains a major hindrance to the border trade as both the countries still find it difficult to continue bilateral trading in their national currencies. The report quotes U Khin Mg Tin, joint secretary of the Border Trade Chambersof Commerce Association, as saying that Indian banks were not yet issuing letters of credit. "This has significantly hampered formal trade whereas unofficial cross-border trade continues," it said. It added that on 94.6 per cent of items, customs duty had been reduced to nil.

"But the information has not yet passed on to border points and they are still charging duties," the report said.