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India and Burma will seek to diversify trade over the next four years as it sets a target of $US3 billion, effectively doubling current figures, in bilateral trade by 2015.
The goal was set on Tuesday following a meeting of the Joint Trade Commission, attended by Burma Commerce Minister Win Myint and his Indian counterpart, Anand Sharma.
India currently ranks as Burma’s fourth largest foreign investor but has sought to gain greater economic leverage in the country, both in an effort to weaken China’s influence there and gain stable access to the ASEAN economies.
Sharma was quoted in The Hindu as saying: “We need to work towards broad-basing our trade basket. Let us encourage businesses on both sides to utilise Duty Free Tariff Preference Scheme and ASEAN FTA channels to diversify trade.”
India has made expansion into Burma a key priority over the coming years as it looks to gain more clout among the developing Southeast Asian economies. It is also fearful that China’s continued rise will see it out-compete India on a number of fronts, including extraction of Burma’s huge wealth of natural resources.
Burma on the other hand is known to be wary of an over-dependence on China, despite the political shielding that a strong relationship with Beijing carries, and has looked to develop ties with India and Russia as a means to avoid this.
To an extent the ball appears to be in Burma’s court, at least for the time being, as Delhi makes regular overtures to Naypyidaw in an attempt to embrace the new government. When Indian foreign minister S M Krishna visited Naypyidaw in June, one of the first senior foreign officials to break ground with the new Burmese government, he offered 10 heavy-duty rice silos as a gesture of goodwill.
One major bilateral venture underway is the $US120 million Kaladan Multi-Modal Transit Project designed to link Indian ports to Burma’s western coastal town of Sittwe. Goods could then be shipped to Sittwe and on into Southeast Asia.
The Tavoy deep-sea port project in southern Burma is also being seen as a hub of connectivity between ASEAN economies, as well as China, and Indian and European trade, which hitherto has struggled for a coastal gateway to Southeast Asia.
India’s perennial competition with China was brought into sharp focus over the Shwe oil and gas pipeline project, which Delhi had originally bid for but lost out to China. The deal was thought to have been sealed after China pledged diplomatic protection in the UN Security Council, something India cannot offer.
While India’s trade with Burma last year stood at $US1.5 billion, China’s exceeded $US10 billion. Of the total Burmese exports to India, 97.5 prcent were pulses and wood products, The Hindu said, despite India’s hunger for Burmese gas and hydropower.