Traders cheer as barter trade ends at Myanmar border

Deepak Kumar | The Dollar Business

A traders’ body on Saturday welcomed the Indian government’s move to stop the barter trade system at India-Myanmar border, saying that the shift towards normal trading system will enhance bilateral economic relationship.    The Reserve Bank of India (RBI) on Thursday announced the closure of the existing barter trade system at the Indo-Myanmar border and implementation of normal trade through currency exchange from December 1, 2015. “Accordingly, all trade transactions with Myanmar, including those at the Indo-Myanmar border with effect from December 1, 2015 would be settled in any permitted currency in addition to the Asian Clearing Union mechanism,” RBI said in a notification. “People in Myanmar are already crippled with internal differences and their economic system. Because of their strategic position, and being a non-entity in the international trade, the removal of barter system will help India influx its material into Myanmar thus enhance its trade relations with Naypyidaw,” Praveen Khandelwal, National Secretary General of the Confederation of All India Traders (CAIT), told The Dollar Business. The barter trade system which began in 1997 was aimed at facilitating the exchange of locally produced commodities along the border. The transactions were not recorded in trade statistics or banking system. “However, over a period of time, the trade basket has diversified and adequate banking presence is in place to support normal trade with Myanmar,” the Central Bank said. At a time when India is under stiff pressure from the domestic as well as international trade scenario, targeting smaller economies for exports could help balance its global trade. Khandelwal said that implementation of normal trade relations would also encourage Myanmar to engage in international trade system.    “With influx of Chinese bacteria into the Indian market, and subsequent efforts made by multinational companies from the US and Europe to control our domestic trade, there is an urgent need from the government to promote our trade with smaller countries like Myanmar. It will also help Myanmar in balancing its domestic trade and be a part of international trade scenario,” Khandelwal said.  

November 07, 2015 | 4:13pm IST.