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Border Haats

New Dimensions in Cross-border Trade

Ashish Nath (ashishntu@yahoo.com) is with the Department of Economics, Tripura University.

A unique initiative by the governments of India, Bangladesh and Myanmar, “border haats” have been introduced to facilitate cross-border trade, curb informal channels of trade and improve the livelihood patterns of people living adjacent to international borders. The impact of the operational modalities of two such haats along the India–Bangladesh border is analysed.

The north-eastern region (NER)1 is the only region in India which shares more of its borders with other Asian countries than with India itself. The north-eastern states are landlocked and are connected to the rest of the country by a narrow land corridor of 27 kilometres, which skirts Bangladesh, with each state in the North East sharing an international border with one or the other Asian countries (De and Majumdar 2014). Macroeconomic data on the NER indicates that except for a few years, the state domestic product for the region has been consistently lower than the national average. The structure of the state income of the region is characterised by low levels of manufacturing and non-governmental activities, which have resulted in a heavy dependence of the population on the agriculture sector. Poor infrastructure and governance, along with low productivity and market access are the major reasons for the lack of development of the region. As a result, the region has remained laggard in terms of major economic indicators, relative to the national average over the years.

Border Livelihoods

The new economic reforms in the era of globalisation have had little impact on the livelihood patterns of the peoples of the NER in general, and on those living adjacent to the international border areas in particular. The existence of a large number of villages alongside the border, and the cultural and ethnic tie-ups between the people of the border-sharing regions, coupled with acute unemployment in rural areas, have given rise to informal channels of trade,2 alongside the formal channels established between the Asian countries sharing borders with India and its north-eastern states. Although “fencing” has been erected along the international border to curb informal trade/smuggling, in the absence of employment opportunities, this has resulted in a burden on the livelihood of the villagers. In order to improve their livelihoods, the governments of the border-sharing countries of India, Myanmar and Bangladesh have introduced the concept of “border haats.”

“Haat” means market. Border haats are, thus, specially designed marketplaces along the border of two countries which aim at promoting the well-being of the people dwelling in remote areas across the borders of the two countries by establishing traditional systems of marketing the local produce through local markets (Ministry of Commerce 2010, 2017). There are 35 border trade points between Bangladesh and the north-eastern states of Tripura, Assam, Mizoram and Meghalaya and, currently, four border haats are operational along the India–Bangladesh border. The Kalaichar–Baliamari and Balat–Dalora haats are located along the Meghalaya–Bangladesh border, while the Srinagar–Chhagalnaiya and Kamalasagar–Tarapur haats are on the Tripura–Bangladesh border. This article considers the latter two and analyses the operational modalities of border haats between Bangladesh and Tripura.

New Trade Initiative

The people of Bangladesh and Tripura have shared trade relations prior to the installation of fencing along the international border. The partition of India and subsequent fencing of the border drastically reduced the scope for trade, and resulted in an unaccounted loss on the livelihood pattern of the residents. In order to revive living standards through traditional systems of marketing, the concept of “border haats” was discussed during the visit of Bangladesh Prime Minister Sheikh Hasina to India in January 2010. The Government of India along with the Government of Bangladesh signed a memorandum of understanding (MoU) towards the establishment of two border haats along the borders of Bangladesh and Tripura.

The border haats are managed by Haat Management Committees (HMCs). The committees comprise five members, headed by the additional district magistrate/subdivisional magistrate of the district, and include one representative each from the police, customs, border security agency, and village-level local government. The committees have jurisdiction over the designated border haats of each country. The size of the haats are 75×75 metres on the zero line, with two entry/exit points, one from the Indian territory for Indian citizens, and another from Bangladeshi territory for Bangladeshi citizens. The HMCs are guided by their respective border security agencies while approving the general design and layout plans with respect to all security-related features.

As per the MoU, only those persons residing within a 5 km radius of the haat can be vendors, and are allowed to trade in commodities produced in India or Bangladesh. These include: (i) locally produced vegetables, food items, fruits and spices; (ii) minor forest produce like bamboo, bamboo grass and broom sticks, but excluding timber; (iii) products of cottage industries like gamcha, lungi, saree and any other handloom products; (iv) small household and agricultural implements, for example, dao, plough axe, spade and chisel; (v) garments, melamine products, processed food items, fruit juice, toiletries, cosmetics, plastic products, aluminium products, cookeries, stationary; and (vi) any product of an indigenous nature, specifically produced in the area of the border haats, subject to the mutual consent of both countries.

The commodities sold in the designated border haats are exempted from custom duties and other duties/taxes levied by the concerned authorities of both countries. The idea is that the working of the haats should not be hindered by tariff and non-tariff measures. It is also advocated that customs and health officials invoke restrictions in the event of infringement of custom regulations, or in the case of outbreak of any disease dangerous to public health. Trade takes place either in the local currency and/or on a barter basis. Each individual is allowed to purchase commodities of a quantity considered reasonable for personal or family consumption. The value of such purchases should not be more than the respective local currency equivalent of $200 for any particular day. However, the limit may be changed by mutual consent of both countries

Kamalasagar–Tarapur Haat

Kamalasagar, a small village in the Bishalgarh subdivision of Sepahijala district of Tripura, India is located on the international border. The Kamalasagar–Tarapur border haat became operational on 11 June 2015 on a weekly basis, that is, every Sunday from 9:30 am to 3:30 pm, Indian standard time. The haat is located at the zero line, and has an area which is approximately equal on both sides of the line. A passport is not required in order to enter the haat.

The haat consists of sheds covered with tin, and vendors sit on the floor made up of cement coverings in order to sell their goods. However, there is no electricity connection, or availability of banking facilities. Poor network connectivity ensures that there is no scope for internet on the premises. The haat has a common toilet, which caters to both vendors and visitors. Transportation is available up to the first gate of the haat, but in the absence of a storage facility, vendors have to carry goods manually from the gate to the haat.

As per the MoU signed between the two countries, only licensed vendors can sell products in the haat. Initially, it was agreed that 25 licences would be issued by the local panchayat samiti to vendors from each country, on the basis of the economic profile of the applicants. But, 22 vendor licences were issued by the competent authorities of both the countries to sell products in this haat. The vendors are generally from low-income groups, and are otherwise engaged in small trading activities, such as running shops, in their respective villages. A total of 1,002 vendee licences have also been issued to residents of India belonging to different village panchayats within a 5 km radius of the haat. In addition to vendors and vendees, on every haat day, a limited number of visitor passes are also issued to persons from outside the area with a valid identity card, keeping in mind that the haat does not get overcrowded.

Transforming Cross-border Trade

It is observed that 90% of the goods sold by Indian vendors are sourced from other states of India, and mainly consist of fresh fruits, garments, cosmetics, and packaged food products. Bangladeshi vendors tend to sell low-value blacksmith products, sarees, including zamdani sarees, dried fish, sweets, readymade garments, plastic products, including melamine, and bakery products. However, vendors are not allowed to sell animals products, or products sourced from a third country.

All individuals who enter the haat with a valid identity proof can purchase goods from vendors of both countries, using either Indian rupee or Bangladeshi taka. There is a huge demand for Indian products among the Bangladeshi people, especially grocery items, toiletries and cosmetics. Similarly, at the Kamalasagar–Tarapur border haat it was observed that Indians tend to purchase dried fish, and plastic products.

The transactions and involvement of vendors, vendees and visitors at the Kamalasagar–Tarapur haat is shown in Table 1.

Data on trade in the haat shows that the involvement and transactions at the Kamalasagar–Tarapur border haat has increased over the years. The economic condition of the vendors has also increased overtime and, consequently, there is pressure on the competent authorities to issue fresh licences to new vendors, or to give new vendors the opportunity to sell products by rotation. The border haat has been successful in improving the economic and social condition of the villagers involved as well.

Srinagar–Chhagalnaiya Haat

The second border haat, namely the Srinagar–Chhagalnaiya haat, falls in the South Tripura district of India and Feni district of Bangladesh. The haat is situated at the zero line of Border Pillar No 2195/6-s and was inaugurated on 13 January 2015. Here too, keeping in view the objective of the border haats, only residents of the area within a 5 km radius from the haat are allowed to sell their products. The lists of vendors are shared by the HMCs of each country. There are 54 vendors in all with 27 vendors from each country. Identity cards for vendors and vendees were issued by the respective district magistrates, and visitor passes against valid identity proofs are made available here too. Although citizens of both the countries can purchase tax-free commodities within the permissible limit, there is no mechanism to track the exact amount of transactions, as bills or cash memos are not issued against purchases. Another aspect is that the weekly haat provides relatives residing across the India–Bangladesh border a unique opportunity to meet and interact, as passports are not required to enter the border haat.

The Srinagar–Chhagalnaiya haat takes place every Tuesday. The haat has cemented sheds with a covered roof, but is open on four sides. This poses a problem to the vendors during rainy days. At this haat, one common facility centre is available for meetings, with separate rooms for banking facilities, etc. However, similar to the Kamalasagar–Tarapur, here too internet is not available, and there is very poor mobile connectivity. Electricity is available only in the facility centre, and there is no separate room for the women traders.

Increased Participation

During the first phase of the establishment of the haats, the demand for licenses was low because of a lack of awareness among the villagers, but, over time, the demand increased substantially. In fact, given the success of the haat, there is a demand from the local people for more vendor licences, but the authorities have yet to issue fresh licences. A major portion of the goods sold by the Indian vendors at the Srinagar–Chhagalnaiya haat is sourced from other states of India and the proportion may be anywhere between 95% and 98%. The major items sold by the Indian vendors in the Srinagar–Chhagalnaiya border haat range from sarees, bed sheets and dress material, to baby diapers. Cosmetics like face powder, shampoo, soap, hair oil; food products like chips, milk powder, milk supplements, chocolates, noodles; along with fresh fruits like banana, jackfruit, etc, are also sold. Most of these goods are sourced from other states in India. Bangladeshi vendors sell fresh fish, dal, rice, oil, dried fish of various varieties, melamine products, plastic products, low-value blacksmith products, bakery products, and fresh fruit. The proportion of fish sold is as high as 60%–70% of the total products.

There is no storage facility here as well, and vendors have to take the unsold products back with them. Overall, the haat seems to be a peaceful marketing space, where persons from every section have a pleasant time, despite the presence of representatives from subdivisional administration, border security force, customs, and police for smooth functioning.

As mentioned, both Indian rupee and Bangladeshi taka are acceptable currency. This border haat has been successful in improving the incomes of not only the designated vendors, but also the non-licence holders, who participate in the haat. While there is no mechanism to calculate the exact value of transactions, the vendors report to the district administration the amount of goods sold, with Indian vendors selling goods worth ₹0.9 million–₹1.1 million, and Bangladeshi vendors selling goods worth ₹0.4 million– ₹0.5 million on an average per haat day.

Table 2 shows that the transactions and involvement of persons in the haat has increased overtime. During the initial days of the haat, only a limited number of vendors participated, but involvement has grown with the passage of time. Border haats are proven to have great potential to reduce informal trade, similar to how fencing along the international border has reduced the volume and variety of informal trade between the two sides (Nath 2012).

Conclusions

Border haats have emerged as a unique aspect of cross-border trade with an aim to uplift the economic condition of the people living along the international border area (CUTS International and FICCI 2017). The establishment of two border haats between Tripura in India, and Bangladesh has been successful in improving the economic condition of the villages in general, and of the vendors in particular. These haats are also used by people for meeting with relatives as no passport is required to enter the haats. The success of the existing haats has increased the demand for new licences for vendors. The issuance of more licences to new vendors and participation of vendors in the haats by rotation, along with innovative ideas to find markets for the local products, can go a long way to boost the livelihood pattern of the stakeholders of the haats.

Notes

1 The north-eastern region of India consists of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.

2 Informal channels of trade, in this study, refer to all types of cross-border trade which is undertaken between different countries without approval of the respective governments.

References

CUTS International and FICCI (2017): “Harnessing the Potential for Cross-border Trade between North East India and Its Neighbouring Countries,” Consumer Unity and Trust Society International and Federation of Indian Chambers of Commerce and Industry, Jaipur.

De, Prabir and Manab Majumdar (2014): Developing Cross-Border Production Networks between North Eastern Region of India, Bangladesh and Myanmar: A Preliminary Assessment, Research and Information System for Developing Countries, New Delhi.

Ministry of Commerce (2010): “Establishing Border Haats across the Border between India and Bangladesh,” Memorandum of Understanding between the Government of the Republic of India and the Government of the People’s Republic of Bangladesh, 23 October, http://commerce.nic.in/trade/MOU_Border_Haats_across_Border_India_and_Ba....

— (2017): “Establishing Border Haats across the Border between India and Bangladesh” Memorandum of Understanding between the Government of the Republic of India and the Government of the People’s Republic of Bangladesh, 8 April, http://commerce.gov.in/writereaddata/UploadedFile/MOC_636295985083746420....

Nath, Ashish (2012): “The Role of Trade and Investment in Improving the Growth Prospects of Tripura: With Reference to Bangladesh,” presented at Stakeholders’ Conference, McArthur Strategic and Economic Capacity Building Programme, New Delhi: Indian Council for Research on International Economic Relations.

Updated On : 19th Mar, 2018

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