A Study on Indo-Myanmar Border Trade

* Thiyam Bharat Singh

I
Introduction
Since the 1970s, the world economy has been characterized by rapid structural changes.
Most of the countries, both developed and less developed, have reoriented their
development strategies to improve their growth performance and to integrate their
economies with the world economy. The use of import substitution policies in many of
the developing countries in the 50s, 60s and 70s have not achieved much success while
some countries adopting export substitution policies have attained high rates of economic
growth. For example, Taiwan, Hong Kong and South Korea experienced high growth
rates by adopting export substitution policies. (Will Martin 2003). The dramatic collapse
of the socialist economies in the former Soviet Union and Eastern Europe after about 40
years of central planning and state-ownership has had a profound impact on the
participation of developing countries in world trade. There has been an evolution of new
thinking among the developing countries towards outward looking trade policies for
improving growth performance. As a result, many developing countries adopted more
open trade policies since 1980s and started experiencing high economic growth by
participating in international trade. This change has made foreign trade and investment an
important component in the development programs of many developing countries. Trade
and openness remain engines of growth and important instruments of development. It is a
fact that countries that have experienced rapid growth and have managed to make
significant inroads into alleviating poverty have been those that have integrated with the
global economy in a market-consistent manner. (Rajan S 2002). Thus, a wave of open
trade policies swept across the developing world and the impact was felt in the northeast
region of India too. An agreement on Indo-Myanmar Border Trade was signed in January
1994.
The present study attempts to examine the Indias border trade with Myanmar at
Moreh in India and Tamu in Myanmar. The data for the present study have been mainly
generated from secondary sources. It also includes some primary data collected during
field visit at the study sites. The sources of the secondary data include reports published

by Asian Development Bank, Central Government publications, State Government

publications, joint report of the Confederation of Indian Industry (CII) and Union of the
Myanmar Federation of Chamber of Commerce and Industry (UMFCCI), various
journals, research papers, articles, books, PhD thesis, various case studies, working
papers, etc.
The rest of the paper is divided into seven sections. The next section provides the
brief profiles of Indian economy and Myanmar economy. It also presents a brief
summary of Moreh town in Manipur. Section three presents data on major indicators of
border trade. Section four analyses the nature of border trade agreement. Section five
examines cross-border trade between India and Myanmar. The last two sections provide
the findings and conclusion of the study.
II
Profile of Myanmar and Indian Economy
Myanmar is essentially an agricultural economy with three-fourth of its population
engaged in agriculture. The country is endowed with rich mineral resources, viz.,
precious stone and semi-precious stones. Forest has reportedly covered 51 per cent of the
total area and the export potential for teak and wood is large. (Kathing 2006). The
economic growth rate of Myanmar was 11.30 per cent in 2001 and it increased to 13.80
per cent in 2003. But the growth rate declined to 12.20 per cent in 2005. (Asian
Development Outlook 2006). The high growth rate of Gross Domestic Product (GDP)
was mainly because of improved performances in agriculture, fisheries, manufacturing
and trade. About half of total output comes from agriculture, fisheries and forestry.
Industry contributes about 15 per cent of GDP and services contribute 35 per cent. There
is a marked difference between Myanmar and Indian economy. Indian economy is more
diversified in industry, services, science and technology. India has a highly diversified
pattern of exports, both manufactured and agricultural, that is competitive with exports
from industrial countries. (Islam 2004). The growth rate of India was 5.80 per cent in
2001 and it rose to 8.50 per cent in 2003. But the growth of India declined slightly to 8.10
per cent in 2005. (Asian Development Outlook 2006). According to economic survey of
Government of India 2006-07, services contributed as much as 68.6 per cent of the
overall growth in GDP in the last five years between 2002-03 and 2006-07. The entire

residual comes from industry. This has resulted into a decline in the share of agriculture
in GDP to 18.5 per cent and the share of industry and services improved to 26..4 per cent
and 55.1 per cent respectively.
The northeast region of India has international boundaries of about 5211 kms along
Bangladesh, Bhutan, China and Myanmar (Chakraborty 2000). Manipur is one of the
states in the region that has international boundaries with Myanmar. Connectivity
between the region and Myanmar is growing very fast following the improvement in
trading relation between India and Myanmar. Moreh is a border town situated in the
Chandel district of Manipur. It is an international trade centre. It is 109 kms away from
Imphal which is the capital city of Manipur. According to census of India 2001, the
population of Moreh stood at 14, 9621. Moreh is inhabited by different ethnic groups like
Tamils, Punjabi, Marwari, Jain, Meeteis, Kukis, Muslim and Mizos, etc. It is reported
that about 2000 people visit the town daily for trading, shopping, etc. Tamu in Myanmar
is a border town situated on the other side of Moreh. Moreh and Tamu are important
trade centres for India and Myanmar. The border area is much close to Golden Triangle
(Myanmar-Laos-Thailand) where 20 per cent of worlds Heroin (also known as number
four) is reportedly produced. There are large number of illicit drug traffickers,
Intravenous Drug Users (IDUs) and sex workers. Because of this situation, people living
between the border towns are highly vulnerable to Human Immuno Virus
(HIV)/Acquired Immuno Deficiency Syndrome (AIDS) and Sexually Transmitted
Diseases (STDs). Two other routes between Manipur and Myanmar exist on the eastern
border of Ukhrul district. The route connects Kamjong sub-division of Ukhrul district and
Somrah area of Myanmar and the other route connects Chingai sub-division of Ukhrul
district with Somrah tract of Myanmar.
III
Major Indicators of Trade
Data on value of export and import for Indo-Myanmar border trade at Moreh have
been shown in table 1. It can be seen from the table that the annual growth rate of total
trade between the two countries has been widely fluctuating since 1996-97. It can be seen
from the table that the annual growth rate of total trade markedly varies from 6.26 per
1

Government of India (2001).

cent to 196.02 per cent during 1996-97 to 2006-07. It has also been found that there were
negative growth rates in five years. The trend in export has shown an irregular trend over
the years. For instance, the value of export which was Rs. 10.45 crore in 1995-96 rose to
Rs. 31.71 crore in 1996-97. But export declined continuously in the subsequent years till
it reached Rs. 2.10 crore in 2005-06. However, export increased markedly to Rs. 62.13
crore in 2006-07.

Table 1: Indo-Myanmar Border Trade (Rs. in crore)

Year

Export

Import

1995-96 10.45

5.39

Total
Trade
15.84

Trade
Balance
5.06

Annual Growth
Rate of Trade

1996-97 31.71

15.18

46.89

16.53

65.55

1997-98 22.45

35.08

57.53

(-) 12.63

6.26

1998-89

5.06

3.74

8.80

1.32

(-) 36.61

1999-00

3.26

3.68

6.94

(-) 0.42

(-) 49.30

2000-01

5.29

0.19

5.48

5.10

91.55

2001-02

1.25

8.30

9.55

(-) 7.05

196.02

2002-03

3.66

12.15

15.81

(-) 8.49

22.69

2003-04

8.74

8.06

16.80

0.68

(-) 84.70

2004-05

5.64

5.01

10.65

0.63

(-) 21.14

2005-06

2.10

3.30

5.40

(-) 1.20

(-) 21.04

2006-07 62.13

1.78

63.91

60.35

74.27

Source: Calculated from the data of Directorate of Commerce & Industries,

Government of Manipur (2006).

The export of India to Myanmar through Moreh border mainly consists of

agricultural food items like edible buffalo offal, soyabari, skimmed milk powder,
soya grid and wheat flour and import from Myanmar consists of agricultural and
forest produce like betal nuts, dry ginger, kooth root, serpentine root, timber and
numeric finger. Data on mainly traded commodities based on 22 items have been
shown in table 2.

Table 2: Prices of Main Commodities Traded (Based on 22

Items)
Quantity Per Choi (1 Choi = 1600 Gram) at 1Re = 28 Kyat
Items
Myanmar
Indian (Rupee)
(Kyat)
1 Betal Nuts
4480
160
2 Dry Chilly
4500
160
3 Onion
650
23
4 Garlic
1400
50
5 Ginger
500
18
5 Potato
600
21
6 Tomato
250
9
7 Pulses (Arhar)
800
29
8 Pulses (Mutter)
250
9
9 Pulses (Moong)
300
11
10 Corrainder
840
30
11 Resin
1540
55
12 Tumeric
2000
71
Source: Data collected during field visit at Moreh and
Tamu, 11-18 May, 2007.
Exchange rate between India currency and Myanmar currency against US dollar
may be summarized in table 3. It can be seen from the table that exchange rate of
India against US dollar ranged between 44.9 rupees to 48.4 rupees during 20012005. But Myanmar has been maintaining almost fixed exchange rate against US
dollar during 2001-2004. For instance, the exchange rate of Myanmar against US
dollar varies from 5.7 to 6.7 kyat during the mentioned period. The market
exchange rate between kyat and rupee at Tamu market is presented in table 4. The
first column in the table gives the prices in Myanmar of an inverter made in third

country. In India, the price for the inverter depends on the exchange rate, i.e., the
amount of kyat that an Indian may receive for one rupee. This is shown in the
column II. Let us assume that the exchange rate is such that one rupee is worth 28
kyat, then the price of the inverter will be 65,800/28, i.e., Rs. 2325.

Table 3: Exchange Rate to US Dollar

Year

India

Myanmar

2001

47.7

6.7

2002

48.4

6.6

2003

45.9

6.1

2004

44.9

5.7

2005

45.2

Source: Asian Development Outlook, 2006

Table 4: Exchange Rate at Tamu (Myanmar)

Price of
Price of
Price of 1
Inverter
1 Re
Inverter in Re.
Hanbao (1000
in Kyat
[Col. I / Col. II]
wt)
in Kyat
65800
28.3
2325
65800
28.0
2350
65800
28.1
2342
65800
28.5
2309
65800
28.0
2350
65800
28.5
2309
65800
28.0
2350
Source: Data collected during field visit at Moreh and
Tamu, 11-18 May, 2007.

Data on value of seized products by Customs at Moreh border is shown in table 5.

It is evident from the table that the value of seizure accounted for Rs. 3.6 crore in
1999-2000 and it rose to Rs. 4.7 crore in 2004-05. The main items of seizure are
precious stones, narcotic drugs, battery, inverter, blanket, Myanmar currency,
detergent soap, ready garments, shoes, etc. The total value of seizures for the
entire northeast region of India was Rs. 11 crore in 1999-20002. It increased to Rs.
6

14 crore in 2000-01 and Rs. 15 crore in 2001-02. The value of seized items further
increased from Rs. 16 crore in 2002-03 to Rs. 19 crore in 2003-04.

Table 5:Value of Seized Products by Customs (Rs in crore)

Year

Amount

1999-00

3.6

2000-01

4.0

2001-02

4.0

2002-03

3.3

2003-04

3.7

2004-05

4.7

Source: Directorate of Commerce & Industry, 2006,

Government of Manipur.

According to an estimate of informal trade by the report of the Government of

India Committee on Informal Cross Border Trade, the value of total unofficial
trade was approximately Rs. 8, 365 crore in 2000-01. This excludes under-voicing
and informal exports. A study conducted by the Indian Institute of Foreign Trade
(IIFT), (1995), estimated the annual volume of cross-border trade that took place
in the northeast region at three border towns of Moreh (Manipur), Champhai
(Mizoram) and Lungwa (Nagaland) at around Rs. 2,200 crore. Of which Moreh
contributed the largest share of around Rs. 1,600 crore followed by Champhai
around Rs. 500 crore and Lungwa around Rs. 100 crore.

A large scale of trade is done through illegal channels at Moreh and Tamu. This
volume of illegal trade might be far higher than the volume of legal trade.
However, this also shows that border trade has huge potential for expansion of
trade between India and Myanmar. The high value of illegal trade carried on
between the borders might be due to long porous borders, restrictions, low
transaction cost and low transportation costs.

IV
Nature of Trade under the Border Trade Agreement
A three-tier system of trade was introduced for cross-border trade at Moreh:

1. Locally produced items that were traditionally exchanged between the

indigenous people residing within 40 km on either side of the border
would be traded under simplified documents up to a maximum value of
US $ 1000.

2. Barter Trade of 22 agreed upon exchangeable items up to a maximum

value of US $ 20,000. The items that can be traded under this category are
locally produced commodities consisting of agricultural and minor forest
products.
3. Normal or Regular Trade3 under the Letter of Credit System as per ExportImport Policy guidelines.

Normal trade or Regular trade refers to trade where transactions are done through
banking channels for all freely permissible items of exports and imports and with
license for restricted items. It has also been agreed that import of rice from
Myanmar is pegged to an annual ceiling of 50, 000 metric tones. The
exchangeable items under the barter trade mechanism are subject to any other
laws for the time being on force. As regard to procedures of import from
Myanmar, Government of India amended from time to time under the provision of
Export-Import Policy (EXIM), 1997-2002, which has now been called Foreign
Trade Policy 2004-09. The 22 items that have been agreed for cross-border barter
trade under the trade agreement are given in table 6.

Table 6: List of 22 Commodities

1.

Mustard /Rape seed

13.

Tomato

2.

Pulses and Beans

14.

Reed Broom

3.

Fresh Vegetables

15.

Sesame

4.

Fruits

16.

Resin

5.

Garlic

17.

Corriander Seeds

6.

Onion

18.

Soyabean

7.

Chilies

19.

Roasted

20.

Food items for local

Sunflower

Seeds
8.

Spices (excluding Nut Meg, Mace,

Cloves, Cassia & Cinnamon)

9.

consumption

Bamboo

10. Minor forest products excluding Teak,

21.

Katha

22.

Ginger and any other

11. Betel Nuts and Leaves

commodity as may

12. Tobacco

be mutually agreed
upon between the two
sides.

__________________________________________________________________
Source: Director General of Foreign Trade (1995).

According to a report of Directorate of Commerce and Industry of the

Government of Manipur (2006), trade in the barter/exchange mechanism is
restricted to 22 items only and there is shortage of commodities that can be
exchanged or bartered. The report suggests that it will be more desirable to
include manufactured Indian goods which enjoy a high demand in Myanmar. In
another case study by Singh, T.P (2002) on Indo-Myanmar trade shows that the
demand for many of the goods included in the exchangeable items particularly on
the Indian side is much less than those actually demanded and transacted under
informal trade. The findings of the study reveal that adopting barter system as
transaction method has its own natural disadvantageous. Since the value of goods

exported under barter trade is limited to US $ 1000 and $ 20,000 per transaction,
there is unlikelihood to recognize the gains from Indo-Myanmar border trade
particularly on the Indian side. This is particularly true in the context of trade
creation effect of custom union theory. The study further pointed out that there
was no question of gains from trade diversion in respect of Indo-Myanmar border
trade. The limited exchangeable items in the border trade are well recognized by
traders. Therefore, traders have demanded for inclusion of more items, especially
manufactured goods in the agreed exchangeable list. (Kathing 2005). Another
study on Indo-Myanmar border trade by Mero (2005) exhibits that all third
country goods and non-specified barter trade items are entering in unspecified
quantity from Gate No. 24 without levying any duty. This indicates that certain
flaws in the border trade arrangement.

Based on the 22 agreed exchangeable items, the main competing and

complimentary products have been identified for the border trade. This is shown
on table 7.

Table 7: Selected Products Mainly Trade between the Borders

(Included in 22 items)
Competing Products
Complimentary Products
1. Pulses and beans
1. Soya Bari
2. Fruits (Mango, Apple,
2. Resin
Water Melon, etc.)
3. Corrainder Seeds
3. Garlic
4. Soyabean Seeds
4. Onion
5. Chilies
5. Red Broom
6. Katha Sunflowers
6. Betal Nuts and Leaves
7. Food Items for Local Consumption
7. Katha
8. Ginger
Source: Data collected during field visit at Moreh and Tamu, 11-18 May,
2007.

10

Barter system is normally practised in a primitive economy. The adoption of

barter mechanism in the border trade might be due to lack of proper financial
institutions between the borders. It might also be adopted for the promotion of
prevailing customary practices of the people living along sides the border. By
doing so, it can encourage production of locally produced commodities and also
prevent goods of third country origin from entering into the border trade. At
present, barter trade system is only means through which border trade is carried
out because normal trade has not yet started. However, various studies indicate
that the border towns of Moreh and Tamu are well monetized. This suggests that
there is great potential for expansion of trade between the two countries through
adoption of normal trade.
V
Cross-Border Trade between India and Myanmar
Indo-Myanmar border trade is important to Myanmar because it serves as a
life-belt to Myanmars sinking economy. (Singh, K.I. 2005). Informal border
trade between Myanmar and its neighbouring countries, viz., China, Thailand,
Bangladesh, India, have been going on for the past several decades5. The social,
cultural, religious and the ethnic similarities among the human groups have
encouraged stronger economic ties in the form of border trade. The history is full
of such relations, which are still continued despite formation of impermeable
boundaries. (Husain 2000). According to a report of Joint Indo-Myanmar Task
Force (2006), trade along the Indo-Myanmar border remains relatively low in
comparison with Sino-Myanmar and Thai-Myanmar borders. India has been a late
entrant but the opening of more border points will gradually increase the volume
of border trade. However, lack of infrastructure on both sides of the border
remains a limitation. The report further mentions that security is another reason
which has been hampering the border trade. According to the report, Tamu in
Namphalong market (adjoining area of India at Moreh) is flooded with third
country goods such as electronic goods from China, plastic products from Korea,
hardware and instruments from Japan, textiles and consumer products from
Thailand. Indo-Myanmar border trade through Moreh is marked more by

11

overregulation seeing trade only as exchange of commodities instead of seeing it

as a means for flow of ideas and opportunity for raising per capita income as well.
(Yumnam 2005). Border trade6 is essentially a form of international trade and is
associated with inherent complexities. (Bhattacharya 2005).

A case study was done at Moreh in Manipur and Namphalong in Tamu by Singh,
N.M and Luwangcha, H.K in 20027. According to findings of the study, the total
daily cash outflow to Namphalong was about Rs. 2, 10, 93,000. This excludes
buyers from Moreh and surrounding villages, invisible activities and other black
transaction. The study also revealed that Moreh market attracted a very less
number of customers as compared with Namphalong market. On the other hand,
Namphalong market in Myanmar is growing faster as compared to Moreh in
India.
Cross-border trade between India and Myanmar at Moreh in Manipur has
suffered because of various problems associated with social and political issues.
Ethnic conflicts8, territorial boundary disputes among states9 and influx of illegal
immigrants are some of the major problems facing the region. Frequent blockades
are imposed by different social/political/ethnic groups on the highways, especially
National Highway 39, which is arguably the only freight route out of the state of
Manipur to the rest of India10. Manipur is also facing problems of poor
infrastructure, like poor transport and communication system, poor power and
water supply system, etc. These problems have imposed severe burden on the
traders who have to use the highways and has caused major disruptions to trading
activities. According to a report of Directorate of Commerce and Industry,
Government of Manipur, (2006), the decline in the border trade is mainly because
of disturbing law and order situation, multiple check-posts on the National
Highway No. 39, restriction on import of timber, collection of local levies,
absence of food testing laboratory and limited list of exchangeable items.

Items worth more than one crore are transacted everyday through Gate No. 2
only11.It was told that some middlemen collect taxes through the gate in the

12

presence of both customs and police personnel and the collected amount ranges
from Rs. 30,000 to Rs. 50, 000 per day. The main items of trade through this gate
are cigarettes, mattress, pillows, towels, curtain, table, clothes, blanket, quilt, bed
linen, electronic items, toilet items, cosmetics, umbrella, raincoats, dry fruits and
food items, home care, candle, incense sticks, plastic products like table, chair,
etc., colour spray, nail cutter, knife, scissors, trolleys, television stand, portable
wardrobe, decorative items like bouquet, dolls, toys and liquor. Informal trade
flows from Myanmar to India through Tamu-Moreh border involve a series of
procedures. First, Myanmarese traders will issue a slip of paper to his Indian
counterpart. Indian traders will hand over the slip to Myanmar check post
officials. Then the Indian traders, it was told, will make a series of payments to
various check posts and police stations in Chandel district of Manipur. (e.g.,
Indian checks post at the border, Custom Preventive Force officials, Moreh Police
Stations, re-checked by the Custom Preventive Force officials, Tengnoupal Police
Stations and Pallel Check Post)12. The above suggests that there is serious
limitation in the existing three-tier trade system.

It is reported that a large quantity of fertilizers (urea) have been exported illegally
from Manipur to Myanmar through Moreh13. This has resulted into shortage of
fertilizers among the farmers in Manipur. The fertilizers were procured from
Brahmaputra Valley Fertilisers Cooperative, Assam. There was an incidence in
which a truck load of urea was seized at Indo-Myanmar border carrying 100 bags
of urea. Fertiliser is profitable in Moreh market because of significant variation
between market price in Imphal and Moreh. For example, while 50 kg bag of urea
cost Rs.1, 050 in Moreh market, it costs Rs 550 in Imphal market.

The recent imposition of sanction by the Government of United States (US) on

Myanmar and compulsory settlement of normal trade transaction through Asian
Clearing Unit (ACU) dollar are now posing serious problem to the progress of the
cross border trade. (Bhattacharya 2005). It has been pointed out that there is
significant difference between the official administered rate and unofficial market

13

rate of kyat against US dollar or India rupee. This has impeded the growth of
normal trade including letter of credit (LC) transaction. In a study by Kathing
(2005) on Indo-Myanmar border trade shows that traders are reluctant to transact
business under regular trade and the letter of credit system because the official
exchange rate of currency appears to benefit Indian traders. In such
circumstances, barter system continues to a viable solution for carrying out trade
between the countries.
It may be noted that trade and trade related services have increased manifold not
only in border towns of Moreh and Tamu but also in different parts of Manipur.
Trade related services include shops trading in variety of products like electronic
items, furniture, food items, etc. These products are imported from Myanmar
through Moreh. There are more than 1000 shops in various places of Manipur and
these shops are selling goods flowing from Myanmar through the border. On the
other hand, there are also more than 1000 shops in Namphalong market in
Tamu14. These shops sell a variety of products ranging from agricultural goods to
industrial goods which are originating from third countries. All these suggest that
border trade between India and Myanmar has created a large number employment
opportunities among the economically active people living on both sides of the
border as well as in different parts of Manipur.
To sum up, Indo-Myanmar border trade is vital for people living on both
sides of the border. Since the agreed exchangeable items are very limited, legal
trade is carried on small scale. The normal trade as a component of the three-tier
system of trade has not yet been started. As a result, barter trade mechanism
continues to be only means for carrying out border trade. A large scale of border
trade is carried out through informal channels. This might be due to restrictions
imposed in the trade and long porous borders between the countries. The flooded
of third country goods in Tamu and Namphalong market of Myanmar is mainly
because of their low prices as compared to goods originated from the states in
India. On the other hand, third countries like China, Japan, Thailand, Korea and
Singapore might have substantially low cost of production, based on their
production on labour intensive as well as application of new technologies.

14

VI
Findings of the Study
The Indo-Myanmar border trade agreement has completed ten years. But the
progress of the border trade is quite slow. Inability to activate the normal trade or
regular, which is a component of three-tier system of trade through banking
process, is one important reason. This has resulted into continuation of barter
trade mechanism for means of carrying out border trade. Trade has been affected
adversely by various socio-political problems. This is quite evident from the
continuous decline in the total value of trade with the exception of a significant
rise in 2006-07. The rate of exchange between the currencies of the two countries
is a cause for concern for those involved in cross-border trade at Moreh. A huge
difference is observed in the official and unofficial exchange rate between the
Myanmarese kyat and the Indian rupee at Moreh and Tamu. It is found that lack
of infrastructure on both sides of the border remains a limitation. Tamu market in
Myanmar is growing faster as compared to Moreh in India. The informal trade
between India and Myanmar at Moreh border is essentially a two-way trade flow.
While informal trade from India to Myanmar takes place in goods domestically
produced in India, informal trade from Myanmar to India through Moreh is done
in both domestically produced in Myanmar and goods originated in third
countries. A large proportion of goods informally traded from Myanmar to India
are procured from other countries like China, Korea, Thailand and Japan. On the
other hand, goods traded from India to Myanmar are procured from the states of
India like Chennai, Delhi, Kolkatta, Jaipur, etc15. Third country goods are the
predominant form of informal trade from Myanmar to India. A large volume of
illegal trade is done in the presence of custom officials. This seems to be a part of
inherent weaknesses in the three-tier border trade system. It has also been found
that the items included in the agreed exchangeable are very limited and these
items are agricultural goods and forest produces. As a result, legal trade in terms
of barter trade mechanism is done on a very limited scale. Various forms of
restrictions in the border trade, law and order situations and multiple check-posts
on the national highway are impeding the progress of border trade. It may also be

15

worth noting that border trade between India and Myanmar has created a large
number of employment opportunities among the economically active people
living on both sides of the border as well as in different parts of Manipur. There is
a missing link between border trade and production structure (both agriculture and
industry) of the northeastern region of India particularly Manipur. The larger
gains from trade seem to accrue to traders operating beyond the northeastern
region. Therefore, border trade at Moreh-Tamu takes the form of transit trade.

VII
Conclusion
The three-tier system of trade Border trade can be enhanced significantly by
improving the position of infrastructure on both sides of the border. Various
studies on Indo-Myanmar border trade show that there is strong demand in
Myanmar for Indian products like Bi-cycles and its parts, Life saving drugs,
Fertilisers, Insecticides, Cotton fabric including lungis, Stainless steel utensils,
Menthol, Agarbati and perfumes, Spices, Chemicals, Cosmetics, Textiles, Motor
cycles, etc. This indicates that border trade can be enhanced significantly by
inclusion of manufactured goods of Indian origin. By inclusion of manufactured
products of Indian origin, it can minimise the volume of illegal and informal trade
between the borders. Certain restrictions and difficulties involved in the border
trade should be simplified to facilitate the trade. There is an urgent to create a
congenial atmosphere to the border area to promote the trade. This can minimise
the trade-impeding factors in the border. The process of rail connectivity between
India and Myanmar will also help significantly in improving the trade between the
two countries. There is a need to have proper financial institutions between the
borders to activate the normal trade through banking process. At the same time,
there is a strong requirement for bringing the three-tier trade system within a
proper regulatory framework.

16

References:
1. Asian Development Bank (2006), Asian Development Outlook, Manila,
Philippines.

2. Bhattacharya Rahul (2005), Trade Settlement Issues and Introduction of Letter

of Credit for Promotion of Indo-Myanmar Border Trade, in Gurudas Das, N.
Bijoy Singh and C.J. Thomas (Eds), Arkansha Publishing House, Delhi. pp. 228245.

3. Chakrborty Atri (2000), Prospects of Border Trade in Power in the North

Eastern Region, in Gurudas Das and R.K Purkayastha, (Eds.), Border Trade
North-East India and Neighbouring Countries, Arkansha Publishing House, Delhi.
pp. 143-148.

4. Government

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Ramesh, Honble Union Minister of State for Commerce to Moreh, 29th
September, 2006., Directorate of Commerce and Industry, Imphal.

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9. Husain Zahid (2000), The Nature of Border and Border Trade of Northeast
India, in Gurudas Das and R.K Purkayastha, (Eds.), op. cit., pp. 130-142.

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Border Trade between India and Myanmar, New Delhi.

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Better Dividends, South Asia Analysis Group, Paper No. 1663, March, 2006.

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19. Singh, T. Priyokumar (2002), Inter State and Regional Trade of Manipur:
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Assessment, in Gurudas Das, et al. (Eds). op. cit. pp. 74-83.
Dr.Thiyam Bharat Singh,
Lecture in Economics,
Manipur Univercity. Manipur.

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