The ban on barter has almost shut down overland trade with India, local merchants say. Since the popular barter system was suspended at the Myanmar-India border post of Tamu, cross-border trade has slumped.
On December 1, India ended long-standing rules allowing border trade to be settled by an exchange of goods up to the value of US$20,000, including beans and pulses, spices, bamboo, forest products excluding teak, tobacco, and other commodities.
The move has had the effect of choking off trade, said an official of the Tamu Border Trade Chamber of Commerce yesterday.
Though November trade exceeded the target by 120 percent, December trade reached only 70pc of the target and so far in January the figure is only 35pc. One dealer said, “Since the change, official trades have become rare.”
Explaining the ban, India’s central bank said last month that barter trade was no longer necessary, as an adequate banking system was in place on both sides of the border.
However, banks on the Indian side were not yet issuing letters of credit, said U Khin Mg Tin, joint secretary of the Border Trade Chambers of Commerce Association, in Kalay last month.
Cash transactions are permitted. “But the dealers don’t trust each other,” said one Tamu dealer.
Since the beginning of the current financial year on April 1, 2015, as of January 15, total trade between India and Myanmar amounted to just over $1 billion, of which about $52 million passed via Tamu.
Myanmar has exported about $653 million to India, mostly in farming products, while importing about $412 million from India in consumer goods, raw materials and other merchandise so far this year.
Unofficial cross-border trade, however, continues, said U Myint Soe, secretary of the Ministry of Commerce’s Planning and Statistics Department, despite occasional rebel activity on the Indian side of the border.
Last year, the Tamu border crossing was repeatedly closed for days at a time because of clashes between the Indian army and rebels.
Statistics indicate that border trade with India accounts for less than 1pc of Myanmar’s overland trade, the great bulk of which goes to China and Thailand.
Source: Myanmar Times
