PAWAN KUMAR

SECTION – A

REG. NO. 1226109134

,
REVIEW OF”INDIA-MYANMAR TRADE RELATIONS”

K. Yhome

JANUARY 2009
http://www.observerindia.com/cms/export/orfonline/modules/occasionalpaper/attachments/ind-
myn-OP_1236338801296.pdf

In the article “India -Myanmar trade relations” K. Yhome have focused on different area which
can help continuous north going growth in the trade relation between India and Myanmar.
Myanmar is the gateway to India’s ‘Look East’ policy. India is going all out to strengthen its
relationship with Myanmar to achieve its stated objective. The current Indian government has
infused a new momentum to keep its contacts robust with Myanmar. Indo-Myanmar relationship
as a result is witnessing an unprecedented upswing in the recent years. India is engaged in
several river and land-based projects in Myanmar. The reconstruction of the Settwe port in
Myanmar, Kaladan Multi-Modal Transport project and Tamu-Kalewa-Kalemyo road project are
to name a few. The India-Myanmar gas pipeline project is another area where India is deeply
involved in Myanmar. India recently signed three important agreements with Myanmar;
exploration of natural gas, satellite-based remote sensing and promotion of Buddhist studies in
Myanmar. New Delhi is also looking for joint cooperation with Myanmar in several other fields
including IT, automobile, textiles, and agro-based industries. Relations between India and
Myanmar have been growing during the past few years with cooperation in all sectors,
particularly in those of trade and commerce. India stands Myanmar’s 4th largest trading partner
after Thailand, China and Singapore. India is Myanmar’s second largest export market after
Thailand, absorbing 25 percent of its total exports. India is also the seventh most important
source of Myanmar’s imports. The governments of India and Myanmar had set a target of
achieving $1 billion trade in 2006-07 but the trade figures showed its well below the desired
mark. India-Myanmar bilateral trade was only able to reach 650 million U.S. dollars in the fiscal
year 2006-07. It stood at $ 341.40 million in 2004-05. It jumped to $ 557.68 million in ’05-06.
This was up by 24 percent from 2004-05. But the bilateral trade between India and Myanmar is
likely to clock $1 billion in 2009-10, up from $951 million in 2008-09.

Indo Myanmar Chamber of Commerce blames lack of interest among Indians to invest in
Myanmar and hold them responsible for the little growth in the volume of the trade. Out of total
trade between two countries, India’s export to Myanmar is just $ 80 million. India is taking steps
such as extending airlines, land routes and sea routes to strengthen trade links with Myanmar. It
is also cooperating with Myanmar in areas like agriculture, telecommunications, and oil and gas
sectors etc. Myanmar government is going all out to woo Indian entrepreneurs and seeking
Indian investments in areas like pharmaceutical, cement, steel, fertilizer, IT and food processing
in a major way. With the kind of momentum that’s being built, there is little doubt that in near
future bilateral trade between India and Myanmar may reach to the desired levels.

India and Myanmar share 1,643 kilometer-long common border along the Potkai Hills. India’s
four states; Mizoram, Manipur, Nagaland and Arunachal Pradesh share international border with
Myanmar. The bilateral border trade agreement of 1994 provides framework facilities by which
trade is carried out between India and Myanmar. Under the agreement trade is currently carried
out through three designated border points one each in Manipur, Mizoram and Nagaland. The
volume of trade between India’s North East states and Myanmar has not been encouraging. The
export growth is around 7% against the import of 32%. The Myanmar-India border trade for the
first quarter of 2006-07 (April-June) amounted to just 2.91 million dollars. Currently only 22
items are allowed to be exported and imported under the free trade agreement signed between
India and Myanmar and its number is trying to increase to 40. They include mustard seeds,
pulses and beans, fresh vegetables, fruits and soyabean. On the other hand, India supply clothes,
shoes, medicines, woolens and engineering goods to Myanmar. These items are in great demand
in Myanmar. There is certain ways to improve the India- Myanmar bilateral trade. There is a plea
to include items like mango, bicycles and its parts, life saving drugs, cosmetics, fertilizers,
imitation jewellery, textiles and pan-masala in the list of the trade agreement. There should be
creation of special economic zone to facilitate the bilateral trade.

The poor bilateral trade is apparently due to currency exchange problem on India-Myanmar
border. Many a time a situation is created where Indian rupees become more to the Myanmar’s
kyats triggering a fall in Indian currency. Recently the Myanmar Government has approved that
border trade with five neighboring countries including India would be conducted in Euro as well
as the currencies of the countries concerned.

Myanmar produces about 90 million kilograms of tea annually with about 65 percent of the crop
grown in northern Shan state. There are three types of tea produced in Myanmar; Green (52%),
Black (31%) and Pickled (17%). A Myanmar business delegation recently visited tea gardens in
Assam and sought Indian technological help to boost its tea production. Myanmar is keen on
importing available tea technology from India. The Niligris tea estates in South India have still
not stepped in to seize this opportunity. Myanmar is a well known producer of gems in the
world. Gem trade is major foreign currency earner for Myanmar which started to hold gem sale
shows annually since 1964. So far it has earned more than $ 600 million from such events. On
the India-Myanmar border, gem smuggling is a major issue.

To boost bilateral trade, the Indo-Myanmar Chamber of Commerce and Industries is organized a
Small and Medium enterprises exhibition, “SME India 2007” at Yangon on November 25. This
was another Indian event in Yangon after the Confederation of Indian Industry held a "Made in
India" industrial show in February 2004. In that event iron and steel products, construction
materials, medicine and medical equipment, cosmetics, garment, handicraft, leather ware,
farming equipment, electronic products and kitchen ware put on display and “SME India 2007”
was organized to attract the attention of Indian entrepreneurs to tap business opportunities in
Myanmar. Indo-Myanmar Chamber of commerce estimates that “SME India 2007” may fetch a
total business of $ 25 million.

India and Myanmar are part of the BIMST-EC, a regional body comprising Bay of Bengal
nations. The conclusion of Free Trade Agreement among BIMST-EC nations is a pressing
demand to facilitate disturbs free trade flow among its member countries. India has already
concluded a free trade agreement with Sri Lanka in 1998 and with Thailand in 2004. It is yet to
finalize this agreement with Bangladesh and Myanmar. A lot of people in India are still not
aware about Myanmar produces and that these products could be officially traded. Better
communication between trading partners is the key to increasing bilateral trade. The importance
of business delegations, special promotion campaigns would create awareness between the two
countries. The business communities would definitely come forward to take a lead and help in
increasing the volume of the trade.

References:

Myanmar: Yangon to hold exhibition of Indian SMEs

May 10, 2007

http://www.fibre2fashion.com/news/apparel-news/newsdetails.aspx?news_id=34925&page=1

Dynamics of Indo-Myanmar Economic Ties

Saurabh

January 6, 2010

http://www.idsa.in/idsacomments/DynamicsofIndo-MyanmarEconomicTies_saurabh_060110

India for more trade centres with Myanmar

October 13, 2008

http://www.thaindian.com/newsportal/business/india-for-more-trade-centres-with-
myanmar_100106794.html