Return to Previous Page

Simanta Haat – A Strategic Imperative to Rural Livelihood for the Indo-Bangladesh Border Villages with Special Reference to Tripura*

CASE STUDY, STRATEGY
ET Cases - FLAME, 11 Pages
AUTHOR(S) : Dr. Rajesh Chatterjee, Assistant Professor, CSSEIP, Tripura University, Dr. Debarshi Mukherjee, Associate Professor, Dept. of Business Management, Tripura University

Case Preview

Simanta Haat – A Strategic Imperative to Rural Livelihood for the Indo-Bangladesh Border Villages with Special Reference to Tripura

 

Any trade depends on the basic demand of local community but border trade connotes to fulfill the claim of two or more countries without limit. Tripura being one of the land locked states of the North-East has suffered economically due to lack of major industrialization in the state since its annexation to India in 1949. The proximity of the state to Bangladesh could have facilitated a prosperous bilateral trade but due to long history of extremism and lack of infrastructural development landed the state into the list of one of the backward states. Border trade has huge potential for expansion of trade between countries. Illegal border trade takes advantage of restrictions, low transaction and transportation cost and it is far higher in volume than the legal trade. Legal trade elucidates the budding place for economic activity in the border regions to engender self-sustenance which is superficially linked to both countries. The strategic imperative to commencement of legal border trade, locally termed as Simanta Haat in Tripura and subsequently other four districts in the state have been deliberated for this endeavour.

The case looks at the aspirations of folks of the border towns of both sides paving way for economic prosperity and studies the underutilized avenue, area of up-gradation of border trade at a larger scale in the coming years. The study revealed that despite inertia and goodwill from both sides few unresolved challenges of product variety, currency exchange facility and supply chain issues putting a question mark to the future of border trade. The sanctioned assortment of items sold in these weekly markets under the watchful eyes of the authorities has a limited financial implication in the livelihood of local folks since there is a cap of expenditure on sale and purchases. However, border trade have been initiated in Meghalaya-Bangladesh border areas specifically in Balat (Meghalaya, India)–Dolora (Sunamganj, Bangladesh) and Kalaichar (Meghalaya, India) – Baliamari (Kurigram, Bangladesh) Border markets in 2011. Though the history of Indo-Bangladesh border trade dates back in 1972; still there are only two states of the 4,096 km border areas have implemented the trade practices so far..................

Background

The day of January 13th 2015 is an important day for the state of Tripura as it marks the beginning of a new dimension in bilateral trade with neighboring Bangladesh. The first simanta haat (Border Market) was inaugurated at the border town Srinagar in South Tripura District 140km away from the capital city Agartala. Tripura is known as a landlocked state fenced by Bangladesh from three sides. Tripura boasts a colourful ethnographic map and it is also a home for nineteen tribes which count to almost 31% of state’s population of approximately 36 lakhs. The state also suffered and bled for two decades over insurgency issues and now has a stable government over the last decade and half. The lifeline of this state in NH44 that connects Tripura with rest of India and entire population needs to depend on this trade route for executing supply chain activities (ET, 2015). Such geographical uniqueness rendered the state in a funnel like situation where lack of infrastructures failed to help producers reach the market with nil elapsed time.............

License Procurement Process

The rules of India is that the state government issues license to the sellers through local administration on first come first serve basis where Upojeela Nirbahi Officer (UNO) (Equivalent to District Magistrate in India) or the local district authority of Bangladesh gives license to the Bangladeshi traders. Very few of them who have no license get entry with the help of BGB............

Items Available for Purchase

All items are sold in this market like Agriculture products, grocery products, dry fish, clothing (Kashmiri shawl, bed sheet, Dhaka’s Jamdani sarees, cotton made lungee, shirt, T-shirt, trousers etc.), utensils (like melamine, plastic, steel), variety of food (like chatni, pickles, masala muri etc.), handmade food (like tiler khaja, chirar
khaja), different fruits (apple, orange etc.), and cosmetics for ladies. Maximum demand is for Hilsa, dry fish, Bangladeshi plastic product of RFL Company and confectionary goods of reputed PRAN Company of Bangladesh. A bulk purchase of cosmetic goods from the Bangladeshi vendor gives more return in Indian market and the Indian sarees are also attractive and profitable to the Bangladeshi sellers and consumers.............

Motivation to the Sellers

1. Every Sunday is the schedule date of market treated as extra earning on a holiday.
2. To maintain unity between the two countries.
3. Every day many pilgrims come to Kamlasagar as it is a tourist spot where a famous temple is located and a sizable population visits the market as well. However, the long queues de-motivate them.
4. ...........

Discussion

Border markets always try to fulfill the demand of local needs and it is not merely an effort to maintain good relation with neighboring country. They also demonstrate the business strength of the host sellers and customers of border country and vice-versa. Such type of model of simanta haat is extracted from new economic geography models, where location of border haat will be at Zero point and sellers need not pay any tax to
sell their articles at this haat (Ottaviaro and Thisse, 2004)............

Host Sellers vs Customers of Across the Border

Every day transaction of host sellers is miserable and depressing as they depend on local agriculture and handmade products and cost of their product is higher compared to Bangladeshi items and this threat may cause of gradual decrease of sellers of host country (Exhibit II).

There is a good relation between industrial concentration (Chen, 2004) and border effect. If medium and big industries of a border state are huge and sound, the economy of that state could enjoy more profit depending on border. Items which are sold in the border are accessible to each and every customer with reasonable price reflect the strength of Industry of that state.............

Host Customers vs Sellers of Border Country

“Simanta Haat could have been closed, if we close our shed”- Bangladeshi Traders.

Maximum sales in a day by a Bangladeshi seller(Exhibit II) varies between INR10,000 to INR12, 000 and the range is INR2,000 to INR3,000 in case of host country sellers. However, the members of the Indian administration differed in the recorded transaction volume and rather opined that the volume of transaction by Indian sellers is much higher to tune of INR40,000 to INR75,000 depending on the products.................

High Demand vs Low Supply

Common articles with high demand are available in the border haat and were having tough competition in case of low supply. Fish like hilsa, prawn, etc., are always in the list of high demand........

Low Demand vs Surplus Supply

Any product that competes in the open market basically depends on best quality and low cost compared to the other similar products. Agriculture and handicraft products which are available in the home market of both countries always face acute problem..........

Legal vs Illegal Border Trade

It may be expected that illegal trade, mainly rice, sugar, cereals and narcotic items, which is going on in these border market have occupied a good percentage of total business of this area making future barrier to the legal traders. Such illegal business may be started by the vendors through legal process with the help of this border market or simanta haat...........

Strategic Imperatives

Director General of Foreign Trade issued an extraordinary gazette on November 7th 2014 outlining the items and their types that could be sold in these markets. Centre’s North-East policy was also quite commendable in understanding the need of people residing in the border towns of a state whose 85% border area is shared with Bangladesh. The gazette supports small-time traders to prosper and at the same time restricts bulk trading thus clearly distinguishing between informal and formal trade.........

Assignment Questions

I. Discuss the opportunities for the Home trades and possibilities of their sustainable benefit in the longer run under existing conditions.
II. ...........

Exhibits

Exhibit I: Tripura

Exhibit II: Photographs of Tarapur-Kamlasagar Border Haat

Teaching Note Preview

Simanta Haat – A Strategic Imperative to Rural Livelihood for the Indo-Bangladesh Border Villages with Special Reference to Tripura

 

Synopsis

Tripura being one of the land-locked states of the North-East has suffered economically due to lack of major industrialization in the state since its annexation to India in 1949. The state has a population of only 36 lakh as per 2011 census and lack of political goodwill and industrialization has further lowered employment opportunities within the state. Though the history of Indo-Bangladesh border trade dates back in 1972, still there are only two states of the 4,096 km border areas have implemented the trade practices so far. Border trade has huge potential for expansion of trade between countries. The strategic imperative to commencement of legal border trade, locally termed as Simanta Haat in Tripura and subsequently other four districts in the state have been deliberated for this endeavour. The case looks at the aspirations of folks of the border towns of both sides paving way for economic prosperity and studies the underutilized avenue, area of up-gradation of border trade at a larger scale in the coming years. The study revealed that despite inertia and goodwill from both sides few unresolved challenges of product variety, currency exchange facility and supply chain issues putting a question mark to the future of border trade....................

$5.48
Rs 0
Product code: STG-1-0049, STG-1-0049A

Abstract

Tripura being one of the land locked states of the North-East has suffered economically due to lack of major industrialization in the state since its annexation to India in 1949. Border trade with Bangladesh could have prospered in the state but history of extremism and poor infrastructural development worked as a deterrent. Illegal border trade takes advantage of restrictions, low transaction and transportation cost and it is far higher in volume than the legal trade. The study revealed that despite inertia and goodwill from both sides few unresolved challenges of product variety, currency exchange facility and supply chain issues raise a question on the future of border trade. The assortment of items sold in these weekly markets has a limited financial implication in the livelihood of locals since there is a cap on expenditure. The central government intends to propagate the idea of introducing such regulated weekly markets in all North-Eastern states. The researchers went through these markets and studied the patterns of transaction and product assortment. Using Participatory Rural Appraisal (PRA) technique the researchers interviewed the buyers and sellers to reveal the challenges faced by them which are working as an impediment to the success of this initiative.

Pedagogical Objectives

This case looks at the aspirations of people of the border towns of both sides paving way for economic prosperity and studies the underutilized avenues of earning and areas of up-gradation at a larger scale in the coming years.

Case Positioning and Setting

This is a strategic management case for post graduate level in social sciences.


* FLAME INTERNATIONAL CASE CONFERENCE 2016

This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$5.48
Rs 0

Related products




Request for an Inspection Copy

(Strictly for Review Purpose, Not to be Used for Classroom Discussion/Trainings)