Prime Minister Atal Bihari Vajpayee and his Chinese counterpart Wen Jiabao's agreement in Beijing on the opening of trade routes through Sikkim and Tibet has received mixed reaction back home.
"It's advantage China," said Srikanth Kondapalli, New Delhi-based defence analyst. "Without explicitly recognising Sikkim, Jammu and Kashmir, and Arunachal Pradesh as integral parts of India, China has been able to establish an important trade post."
Complete coverage of Vajpayee's visit to China
After the July 1992 accord between India and China, trading posts in Pulan in China and Gunji, Uttaranchal, were established using the Lipu Lake Pass.
After the June 1993 accord, another trade post each was opened in Namgyal in Himachal Pradesh and Jiuba in China. These trade posts handled the trade through the Shipki Pass.
According to trade organisations, the official border trade across the entire China-India border is worth about US $100 million. If more border trade posts are established, this figure could escalate to as much as $500 million in less than five years.
After Monday's agreement, the Nathu La Pass is to be opened up for trading as well.
Dr Arvinder Singh of the Institute of China Studies told rediff.com: "I consider the decision of opening trade posts a positive step for India-China relations. It will activate the border on both sides. I agree that initially it will help China more. But in the long run it should equally benefit both countries."
In recent years, India's former ambassador to China C V Ranganathan and Dr Singh have participated in a few track II meetings where the issue of establishing trade relations through the Sikkim-Tibet border was discussed vigorously.
Dr Singh said, "In 1999, a four nations initiative was started under the name of the BCIM Forum to open the trade route between Sikkim and Tibet. The forum members are Bangladesh, China, India and Myanmar. Initially, pressure to open up the trade route through Sikkim was from Bangladesh and Myanmar. But India was slow in its response."
Later China took up the issue of trading posts on the Sikkim-Tibet border in bilateral talks. The issue was discussed for six months. The opening of Nathu La, Dr Singh said, is therefore a China-driven decision, one that India has gone along with rather reluctantly.
But in New Delhi, China experts who favour opening the Sikkim-Tibet trade route believe India had overplayed the security concerns and the eventual impact of the move on the West Bengal town of Siliguri all these years.
They say the security problem and the threat of narcotics trafficking can be tackled through efficient management of the border.
Opening up the Sikkim-Tibet route, they say, is a positive step because southwestern China will eventually have closer integration with south Asia.
Dr Singh also believes that trade along the India-China border has huge potential in the long run. The Chinese province of Yunan, which borders northeast India, is underdeveloped, but is still a large enough market. "Yunan's capital is Kunming, where 95 international flights land. India needs to show confidence to do business with China beyond Beijing and Shanghai," he said.
Many Indian businessmen who are competing with China feel that with more border trading posts being opened, China will be able to import raw materials from India and send back finished goods, getting the advantage of value addition.
Yet, most experts agree that China has realised that Tibet is unmanageable without liberalising the southwestern region. Even Defence Minister George Fernandes, on his return from China, said the country is facing the problem of imbalanced development, particularly in southwestern China as compared to the eastern seaboard.
Tibet faces acute food shortages and requires rice and other food items, which can be efficiently supplied through the Sikkim border.
China also plans to set up free trade zones along Tibet's border with north India. For this purpose it wants to construct a road along the border and is seeking heavy reduction in customs duty and other tariffs.
Kondapalli, however, isn't entirely convinced. "China has solved its border issues with 12 of its 14 land neighbours," he pointed out. "Only India and Bhutan are having pending border issues with China." He sees a larger game plan behind China's demand to open up the border trade routes. China, he believes, wants a quantum jump in trade with India.
According to him, normalisation of diplomatic, political and cultural relations without solving the border issues indicates that China wants to create stakes within India. That will help the Chinese create an atmosphere in their favour before taking up sensitive border issues like Aksai Chin or Arunachal Pradesh.
