The recent inking of the agreement for expanding cross-border trade between India and China through the Nathu La Pass in Sikkim—which is sandwiched between Nepal and Bhutan—as a fallout of the six-day visit of Indian Prime Minister Atal Bihari Vajpayee to China, is seen as a landmark for ushering in regional development in eastern South Asia.

Economic development so far has remained elusive in the sub-region, and flourishing trade along this route could well create a new trade bloc in Asia outside the Association of Southeast Asian Nations (ASEAN), experts say.

The Indian Chamber of Commerce Secretary-General, Nazeeb Arif, who is an expert in the economic development of this sub-region, comments: "The easing of political tensions along this route and the consequent opening of this strategic path has paved the way for unprecedented economic development in the region, which includes the Greater Mekong region of Laos, Cambodia, Vietnam, Thailand, the eastern and north-eastern states of India, Bangladesh, Bhutan and the Yunnan province of China. The Nathu La Pass will provide key connectivity to develop that trade bloc."

He suggests that creation of such a trade bloc will pave the way for further economic co-operation between the two Asian economic giants, which would pose a formidable economic rival to the European Union and the North American Free Trade Agreement (NAFTA).

The economic effects of opening the new trade route are five-fold:

1. Flourishing two-way trade. The north-eastern States and indeed the eastern States of India could tap the Chinese market through the more effective land route. 2. India becomes a new sourcing point for intermediary products which could feed Chinese factories for production of manufactured goods. 3. A fillip to agro exports: This is a region rich in agricultural produce. Eastern India has five agro-export zones, and one in the north-east in Tripura would have a whole new market.

4 Accessing third country markets: Partnerships and joint-venture collaborations could help in accessing third country markets such as Taiwan, Indo-China, Japan and Korea. 5. Tourism could thrive in this region with land routes readily available. This could be developed into an integrated international tourist circuit. With the political will in place, the next step is to carefully tap the economic opportunities that have emerged. According to the agreement, India and China have decided on two trading hubs—Tsomgo in Sikkim and Rinchingang in Tibet.

Sikkim, which would be the direct beneficiary of this cross-border trade agreement, has lobbied for some time with New Delhi for the resumption of border trade.

While Sikkim is anxiously waiting for the agreement to be worked out, West Bengal is looking forward to the growing importance of Bagdogra airport in Darjeeling, and hopes that it may be upgraded to the international level.

The government will have to be more alert and proactive because the opening of the new route means the movement of people across borders.

Trade through this region has a chequered history. With the occupation of Tibet by China in the early 1950s, trade received a major boost as the Chinese, who were in construction overdrive, asked the Tibetans to bring in more construction material. However, with the souring of Sino-Indian relations and the subsequent war in 1962, all trade along this route abruptly stopped.

Forty-one years ago the trail of the mule trains was picturesque and interesting. Tibetan traders would lead their mules laden with two maund (80 kg) sacks of musk pods, raw Tibetan sheep wool, silk, brocade, zee (precious Tibetan stones) and dayangs (Chinese silver coins) to Gangtok, the capital of Sikkim, from Lhasa, the Tibetan capital which is 425 km north-east of Gangtok. They would descend from the icy Nathu La Pass, which is 14,000 feet above sea level.

Indian traders were issued permits only as far as Yathung, about 15 km into Tibet—or the major trading post of Gyantse. The first stop is either Chhangu Lake or Sherathang. The next would be down the mountain at Chubithang, about four kilometres from Nathu La. Yathung is the first major Tibetan trading post. The rest of the trail passes through the undulating Tibetan plains with no sign of any vegetation.