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A Himalayan business pass

Nathu La was to be opened up for trade on October 2, 2005, but postponed on Chinese request. On June 18, 2006, at Lhasa, a six-member Indian delegation agreed with the chairman of the Tibetan Autonomous Region government that Nathu La should be opened for trading from July 6.

It appeared that the Chinese side wanted to complete the Golmud to Lhasa railway line and other over- and under-ground defence networks before Nathu La can be used for trading. China has constructed a 6400 square metre market at Dongqinggang, about 16 km from Nathu La. On the Indian side, a trade mart at Sherathang (nearly seven km from Nathu La) was constructed. Prior to this, India estimated that it needs to spend Rs 2,122 crores for infrastructure building at Nathu La. A mock trading session was carried out by India at Nathu La in April to test various parameters including infrastructure facilities, customs, banking, accommodation and security.

China has shown a keen interest in Tibetan trade with India through Nathu La. In its 10th Five Year Plan (2001-2005) it has launched a Western Development Campaign of constructing infrastructure projects in its western regions including those bordering India with Tibet, Sichuan and Yunnan. Specifically, China has spent enormous amounts on constructing roads, railways, airfields and placing fibre optics in Tibet.

Chinese Ambassador Sun Yuxi suggested earlier this year that the Tibetan railway, to be operational later this year, could be extended to Nathu La. With these, China intends to connect its land-locked western region with seaports such as Kolkata, Haldia or Chittagong. As current trading through Myanmar is nearly five times the distance of the Nathu La route, transportation costs would be obviously lower in the latter case. For perennially food-deficient Tibet, north Indian plains could provide rice, wheat and other raw materials.

Image: Workers maintain the Xining-Golmud section of the Qinghai-Tibet Railway, in Gangcha county of Qinghai province, China. The Qinghai-Tibet railway will begin trial operations on July 1, 2006.

Photograph: China Photos/Getty Images

Earlier slide show: The world's highest railroad

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