Wednesday, September 6 2006 15:52 Hrs (IST) - World Time -

Nathu La:: China wants India to review the list of tradable items through the fabled Silk Road that opened two months back after a 44-year gap because business is running very low.

India and China July 6 re-opened trade across the 15,000-feet (4,545-metre) Nathu La Pass, 52 km east of Sikkim's capital Gangtok. The move marked the first direct trade link between the two countries since their 1962 border war.

"Beijing wants the Indian government to review the list of items permitted to enter the Indian market from China through Nathu La," Saman Prasad Subba, Sikkim's director of industries and commerce, told sources.

Under the deal, 15 items were approved for import from China such as silk and yak pelts and horses while India could export 29 items from textiles to tea, rice, vegetables and herbs.

"Chinese traders last month could not do any business at all as there was no demand here for their items," Subba said.

Trade at the Renqinggang mart in China, 17 km from Nathu La, is currently worth about 100,000 yuan ($12,500) a week while Chinese traders in the last two months did business worth just about Rs.75,000 ($1,600).

"We were told India is considering the Chinese request to review the list of items as there is no demand for things like goats and horses and yak tail," said S.K. Sarda, president of the Sikkim Chamber of Commerce.

Although there is demand for silk, yak skin and wool, Chinese traders were unable to sell them because of strict quality certification set by India.

"We are unable to allow Chinese to sell yak skin and raw silk as that requires quality certification. We do not have facilities here to grade the items before allowing them to trade," an Indian customs official said.

Two-way trade has been slow, with five to six Chinese traders crossing the border, separated by a rusty barbed wire marker, to the bazaar of Sherathang, five kilometers below the pass on the Indian side. About 20 Indian traders head to Tibet on the Chinese side.

"In all 143 Indian traders have crossed the border with tea, rice, vegetables and cigarettes being the major trading items," Subba said.

Trade takes places four days a week (Monday to Thursday). Trading will continue until Sep 30 when the snow makes the area impassable.

"India has unilaterally imposed restrictions on trade through Nathu La," Hao Peng, vice chairman of the Tibet Autonomous Region, was quoted as saying by the Chinese media.

The Sikkim government too urged New Delhi to review the list of tradable items from India to boost trading prospects.

"Sikkim wants the list of items to be increased from 29 to 100 and include commodities like local beer, medicines, jam, processed food and floriculture and horticultural products," Sarda said.

Despite low business, hundreds of Indian entrepreneurs are seeking trade permits from the Sikkim government to do business in China.

"So far we have received more than 2,000 applications from local traders," the director said.

The reopening of the pass comes as trade has surged India and China, with their combined consumer market of 2.3 billion people. Bilateral trade grew by 37.5 percent to hit $18.73 billion last year, according to Chinese data.