Myanmar represents a significant opportunity for India to position itself as a key economic partner of Myanmar, a country rich in resources, in close proximity to India and a bridge to the rest of South East Asia. Recent political changes and economic reforms in the country have offered new openings that should be pursued, but we will now find ourselves in a much more competitive environment as the country is opening up to the rest of the world. A coordinated strategy involving the government and private sector is essential, with a clear set of priorities and a willingness to follow through on decisions made.

BILATERAL TRADE

• India’s policy towards Myanmar in the last decade and more has allowed a steady growth in our economic engagement. India is undertaking several development cooperation projects in Myanmar which are earning us political goodwill. Our trade and commercial ties have also grown. As per latest trade figures two way bilateral trade amounted to US$ 1.95 billion in 2012-13 which is almost three times the trade figure in 2005-06 (Annexure 2 gives trade data). Myanmar, however, enjoys a large trade surplus with its exports at US$ 1.404 billion in 2012-13, contributed principally by pulses and timber. Our exports have also grown to US$ 545 million. While it rose sharply by 70 percent in 2011-12 over the previous year, but remained flat last year. The jump in the last couple of years has come from our participation in some large projects in Myanmar involving railway equipment, steel pipes, etc. Additionally our exports of pharmaceuticals, tractors, machinery and steel products have also shown significant increase in recent years.

• But considering Myanmar’s size and proximity and the fact that we figure only at No. 7 in terms of Myanmar’s overall imports the potential is far more.

With the economic reforms underway in Myanmar and the progressive lifting of western sanctions on the country, it will now be possible to engage in direct trade and settle payments without use of intermediaries. But in the wake of the new competitive environment in Myanmar it is important that some business facilitation measures are taken by us. It is suggested, to begin with, that the current shipping service between Chennai and Port Blair, and Kolkata and Port Blair, run by Shipping Corporation of India (SCI), could be extended to Yangon. The establishment of direct shipping services is considered indispensable to promoting trade relations with Myanmar. There is also need to establish direct daily air services between Delhi and one or two other of our metros with Yangon.

BORDER TRADE AND TRADE THROUGH THE BORDER

• There is also very little economic engagement between the North Eastern Region (NER) and Myanmar. While NER’s trade with Bangladesh shows a link between resource and industry, NER’s trade with Myanmar through land border is mostly transit trade, of which a large volume is informal trade and contraband. In 2012- 13, India’s recorded export to Myanmar through the land border at Moreh was a paltry Rs. 26.20 crore, which is however much higher than the Rs. 4.94 crore recorded in 2007-08. On the other hand, India’s imports from Myanmar increased to Rs. 15.09 crore in 2012- 13 from Rs. 13.47 crore in 2007-08. These trade figures, however, do not include the large levels of informal trade that take place through the border trade points, which have not been systematically recorded thus far.