Trade and Commerce
Myanmar provides India with a corridor to South East Asia. But, India Myanmar engagement so far has been based on strategic and security considerations between the two countries. Unlike its other neighbours India doesn’t have proper banking and financial relations with Myanmar, and this acted a major hurdle in smooth bilateral trade and commerce.
India complains against the lack of requisite permission to set up banking facilities in Myanmar and Myanmar is unhappy because Indian banks so far have not shown any serious interest in investing in its land.
Shipping services have been launched since October 2014 with support and subsidy given by Government of India. Myanmar is considering the possibility of reducing port dues and stevedoring charges so as to render this service viable.
Mechanisms such as Joint Trade Committee, Double Taxation Avoidance Agreement and Bilateral Investment Protection Agreement and other technical level committee on trade have contributed significantly in strengthening trade and investment relations.
Bilateral trade has been growing steadily reaching USD 1571.95 million in 2014-15 (Exports to Myanmar USD 773.74 million and Imports from Myanmar USD 1016.86 million) and India is the fourth largest trade partner of Myanmar but trade remains below potential.
Importance of North-east in Indo-Myanmar ties
North-east region is India’s trade gateway to the ASEAN countries. It is expected to act as the strategic catalyst and a game changer. However, crippled by frequency of insurgency and militarisation in the entire north-eastern region, prevalence of acts like AFSPA has sent a negative signal to the people of this region. This has made the general public in this part remain alien to India’s sentiment and concern for security and bilateral ties with the large East Asian countries.
Unless there is an urgent need for promotion of overland connectivity projects, border trade and people-to-people contacts to restore credibility of north-east people in India’s currently revised ‘Act East’ Policy. In the current scenario new relations between India and Myanmar are starting to bloom. India has offered industrial park along the India-Myanmar-Thailand trilateral gateway, and also it is engaged with Myanmar for creating a special economic zone.
The north-India, the gateway to East Asia, is devoid of effective transport system connecting India. Intra-northeast transport system is being felt as an urgent attention by India for bridging the infrastructural gap between East Asia. The direct shipping line between India and Myanmar launched in October 2014 with port rotation Colombo-Chennai-Krishnapatnam-Yangon would further strengthen trade and economic relations with Myanmar and Thailand.
India–Myanmar–Thailand (IMT) trilateral highway
The India–Myanmar–Thailand (IMT) trilateral highway is a highway under construction which is proposed to connect Moreh, India with Mae Sot, Thailand via Myanmar. On being fully operational, the road is expected to boost trade and commerce in the ASEAN–India Free Trade Area, as well as with the rest of Southeast Asia. India has also proposed extending the highway to Cambodia, Laos and Vietnam. On 29 August 2016, India and Myanmar signed an agreement to speed up construction of the highway.