India and Myanmar share a long-standing historical and cultural relationship. The two countries are also connected by a land border of over 1,600 kilometers and a maritime border in the Bay of Bengal. Over the years, India and Myanmar have maintained cordial diplomatic relations and have been engaged in trade and economic cooperation. In this article, we will explore the trends and challenges of trade between India and Myanmar.
India and Myanmar have a long-standing history of trade relations. India is one of Myanmar’s largest trading partners, accounting for around 8.4% of Myanmar’s total trade in 2020. Similarly, Myanmar is one of India’s key trading partners in Southeast Asia, accounting for around 1.5% of India’s total trade.
The trade between India and Myanmar has been steadily increasing over the years. In 2019-20, the bilateral trade between the two countries stood at US$1.5 billion, with India’s exports to Myanmar accounting for US$876 million and imports from Myanmar accounting for US$653 million. India’s major exports to Myanmar include pharmaceuticals, steel, machinery, and electronic goods, while Myanmar exports to India include pulses, timber, minerals, and agricultural products.
The border trade between the two countries has been growing steadily, with the opening of new border trade points and the improvement of infrastructure. There are currently four operational border trade points between India and Myanmar, including Moreh-Tamu, Zokhawthar-Rhi, Avakhung-Pansateng, and Reed-Khawthlang. These border trade points have facilitated the trade of various goods, including agricultural products, textiles, and consumer goods.
In addition to border trade, the two countries have also been exploring maritime trade. The Kaladan Multi-Modal Transit Transport Project, a key infrastructure project connecting India’s northeastern states with Myanmar’s Sittwe port, is expected to boost maritime trade between the two countries. The project involves the construction of a port, inland waterway terminal, and road and rail links, which will provide an alternative route for trade between India and Myanmar.
Challenges in Trade
Despite the potential for growth in trade, India and Myanmar face several challenges in their bilateral trade relations. One of the major challenges is the lack of connectivity and infrastructure, particularly in the northeastern states of India. The region is geographically isolated from the rest of India, which makes it difficult to transport goods and services. The poor road and rail connectivity also affect the border trade between India and Myanmar.
Another challenge is the complex regulatory environment and bureaucratic procedures. The trade between the two countries is subject to various regulations, including customs, licensing, and quality control. The regulatory environment can be opaque and inconsistent, leading to delays and higher costs for traders.
The border trade between India and Myanmar is also affected by non-tariff barriers, including restrictions on the movement of goods and people. The border trade is subject to various restrictions, including quotas, licensing requirements, and tariffs. The restrictions can be unpredictable and change frequently, leading to uncertainty for traders.
The security situation in Myanmar is also a concern for India’s trade relations. The recent military coup in Myanmar has led to political instability and civil unrest, which has affected the economy and trade. The border trade between India and Myanmar has been disrupted due to the closure of some border trade points and the imposition of curfews.
Trade between NER and Myanmar
Trade between North East India and Myanmar has been growing over the years, and the North East Region comprising eight states including Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura, is considered a gateway to Southeast Asia. The North East Region shares a 1,643-kilometer border with Myanmar, which makes it a natural trading partner. The trade between the two regions is primarily in the areas of agriculture, fisheries, timber, textiles, consumer goods, and pharmaceuticals.
Agriculture is a significant sector for both North East India and Myanmar, and it is a key area of trade between the two regions. Myanmar is a significant source of pulses and beans for India, with a considerable portion of these imports coming through the North East Region. Additionally, North East India exports various agricultural products to Myanmar, including vegetables, fruits, and spices. The trade in agricultural products between the two regions has significant potential, and both countries are exploring ways to further enhance trade in this sector.
The fisheries sector is another significant area of trade between North East India and Myanmar. The North East Region has a significant fishing industry, and exports fish and fish products to Myanmar. In return, Myanmar exports fish and fish products, such as dried fish, to the North East Region. The trade in fish and fish products between the two regions has been growing over the years and holds significant potential for further growth.
Timber is another significant item of trade between the two regions. Myanmar is a significant exporter of timber, and the North East Region is a significant importer of timber from Myanmar. The timber trade is subject to government regulations to ensure that it is sustainable and does not contribute to deforestation. The trade in timber between the two regions has significant potential, and both countries are exploring ways to further enhance trade in this sector.
The textile industry is also an area of trade between North East India and Myanmar. The North East Region has a significant handloom industry, and Myanmar is a significant exporter of silk fabric. As such, there is potential for collaboration between the two regions to develop and promote the textile industry. The trade in textiles between the two regions has significant potential, and both countries are exploring ways to further enhance trade in this sector.
In addition to the above items, there is also trade in other goods, such as consumer goods and pharmaceuticals. North East India is a significant exporter of pharmaceuticals to Myanmar, and there is potential for further growth in this area. The trade in consumer goods between the two regions has also been growing over the years, with Myanmar exporting products such as electronics and household goods to the North East Region.
Overall, the trade between North East India and Myanmar holds significant potential, and both countries are exploring ways to further enhance economic ties. The development of border infrastructure, such as roads, bridges, and border haats (markets), is expected to further facilitate trade between the two regions. The border trade between the two regions is conducted through a few designated land border points, namely Moreh in Manipur, Zokhawthar in Mizoram, and Nampong in Arunachal Pradesh. The border trade between the two countries is subject to a bilateral trade agreement, which was last renewed in 2019.
The India-Myanmar border trade is a significant contributor to the economy of the North East Region, and the Indian government has taken various initiatives to promote trade and economic cooperation between the two regions. The North Eastern Council (NEC), a regional planning body established in 1971, has been promoting trade and economic cooperation between the North East Region and its neighboring countries, including Myanmar. The NEC has identified various potential areas of trade between the two regions and has taken various initiatives to promote trade in these areas.