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Focus: GS-III Indian Economy, GS-II International Relations

Why in news?

  • Sikkim’s Minister for Industries and Commerce expressed concerns over the future of the border trade through Nathu La.
  • The Kailash Mansarovar Yatra, which started via Sikkim a few years ago, was also suspended in 2020.
  • The border trade via the Old Silk Route at Nathu La reopened in 2006, amid expectations of improving relations between the India and China.

The Doklam effect

  • In 10 years from 2006 to 2016, the volume of the trade across the border through Nathu La had multiplied 200 times.
  • However, the long-drawn standoff at Doklam between the Indian and Chinese forces in 2017 had an adverse impact and trade dropped by almost 90%.
  • According to customs officials guarding the Serathang checkpost on the Indian side, trade had to be suspended in 2017 as the Doklam standoff coincided with the trading season.
  • But trade picked up again in 2018 and exports increased.
  • In 2019, the trade declined because of the poor condition of the roads.


While the volume of the trade may not be huge and only 200 traders are involved in the exercise, political observers believe that the trade at Nathu La has a unique symbolism and underlines the idea of Sikkim — which shares borders with China, Nepal and Bhutan — being a peaceful and tranquil State.

Nathu La

  • Nathu La is a mountain pass in the Himalayas in East Sikkim district.
  • It connects the Indian state of Sikkim with China’s Tibet Autonomous Region.
  • Nathu La is one of the three open trading border posts between China and India; the others are Shipkila in Himachal Pradesh and Lipulekh (or Lipulech) at the trisection point of Uttarakhand–India, Nepal and China.
  • Sealed by India after the 1962 Sino-Indian War, Nathu La was re-opened in 2006 following numerous bilateral trade agreements.
  • The opening of the pass shortens the travel distance to important Hindu and Buddhist pilgrimage sites in the region and was expected to bolster the economy of the region by playing a key role in the growing Sino-Indian trade.
  • It is also one of the five officially agreed Border Personnel Meeting points between the Indian Army and the People’s Liberation Army of China for regular consultations and interactions between the two armies to improve relations.

-Source: The Hindu

November 2023