Gunda Tax on scrap

The scrap business may be small, but what is happening to it at the Bhutan-India border exposes a much bigger problem. If trucks carrying legitimate commercial goods can be stopped in Jaigaon by people claiming political connections and forced to pay money, this is not merely a scrap industry problem. It is a serious law-and-order and cross-border trade issue.

The reported demand of Nu 10,000 per truck, on top of the Nu 4,000 already being paid, is effectively an unofficial tax imposed by people with no legal authority to collect it. Even more disturbing are claims that the new groups are able to threaten seizure of Bhutanese trucks by alleging that the trade is illegal, while apparently enjoying some degree of protection or support from local law enforcement.

If these allegations are true, Indian authorities in West Bengal have a serious problem to answer for.

Border trade cannot be left at the mercy of local political groups, extortionists or officials who can arbitrarily decide what is legal and what is not. The fact that traders have apparently been paying for years to get scrap through Jaigaon only makes the situation worse. It suggests that an informal system has been allowed to develop where payments become the cost of doing business.

India has every right to regulate what enters its territory but those laws must be enforced by authorised agencies, transparently and consistently.

Bhutan also cannot escape responsibility. The absence of a clear formal mechanism for scrap exports has created the ambiguity that makes such exploitation possible.

The answer is a formal, transparent and enforceable system, backed by both governments.

India should investigate the alleged extortion and the role of local authorities. Bhutan should clarify the legal status and documentation of its scrap exports. Together, the two countries should establish a proper channel for this trade.

A bilateral relationship built on trust cannot allow legitimate traders to be held hostage by people operating in the shadows of the border.

“Trust takes years to build, seconds to break, and forever to repair.” – Amy Rees Anderson