beyondbrics

By Girija Shivakumar in New Delhi

India’s annual railway budgets are regularly peppered with talk of “inland ports”, but they only ever seem to exist on paper.

But the emergence of an inland port ‑ really a distribution and customs centre ‑ on Nepal’s border with China may be less forgettable in Delhi.

The Gyirong centre, which the Tibet Autonomous Regional government is billing is as the Tibetan plateau’s largest land port, is intended to be a hub for trade with Nepal, India, Bhutan and Bangladesh. Though little more than a few tents now, the centre at Shigatse would handle container traffic and have the customs and sorting capabilities to expand trade volumes. Operations are to begin next year.

China has been intensifying efforts to establish greater connectivity with the entire south Asian region and the Gyirong port follows the extraordinary feat of engineering that linked Tibet by rail to the rest of China.

Although Nepal shares a 1,400-kilometre border with China and an even longer boundary with India, primitive transport links have limited economic activity in the country sandwiched between the world’s two fastest growing large economies.

The presence of the highest mountains in the world, including Mount Everest, is one reason for Nepal’s isolation. Another is complacency. Nepal does 60 per cent of its trade with India, but no railway connects the two.

Economists and policymakers in Nepal see a day when better infrastructure allows their country to become a conduit for trans-Himalayan trade but their enthusiasm may not be shared to the south.

India is sensitive to the flood of cheap goods coming out of China, its largest trading partner. While India exports iron ore and other resources to China, value-added products come the other way. One senior Indian executive complains that India does not even make plastic buckets anymore. The Chinese do it cheaper.

India’s recourse has generally been to trade protection measures. Buckets have been spared but various Chinese-made mobile phones, chocolates and toys have faced bans over the past 18 months. Longer term, India needs to get on terms with its own trading infrastructure or its manufacturers risk losing out.

Indian Railways has been doing a lot in Africa. It plainly has its work cut out realising its ambitions closer to home.