MYANMAR and India agreed to double bilateral trade to US$3 billion at a Joint Trade Commission attended by Minister of Commerce, U Win Myint and Indian Union Commerce Minister, Anand Sharma, last week.
Speaking at the meeting on September 27, Mr Sharma said that India proposed that both countries work towards doubling bilateral trade by 2015.
“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,” he said.
Mr Sharma pointed to construction of the $120 million Kaladan Multimodal Transit Transport Project by 2013, which comprises sea and overland trade routes linking Indian ports with Sittwe port in Myanmar and overland via Mizoram, providing an alternative route for transportation of goods to North-East India.
An official from the directorate of trade under the Ministry of Commerce told the Myanmar Times that the project would increase trade routes and so provide the impetus for increased trade.
“We believe bilateral trade will reach $3 billion in 2015 as expected. After Sittwe port is finished in 2013, the northeast way will open up as marine transportation has lower transportation charges than overland routes,” he said.
At the meeting last week, both ministers also stressed the need for working on two additional border trade points – Pangsau Pass and Avangkhung, in addition to the border trade point at Tamu on the Myanmar side and Moreh on the Indian side. It was stated that the security situation was stabilising along the border and had immense potential for normalised trade. Both countries have expanded the list of items for border trade from 22 to 40.
However, Myanmar exporters have expressed reluctance for border trade despite its time advantage. U Soe Myint, a ginger exporter told The Myanmar Times that it takes about one or two days to reach the Tamu border, Yangon port to Chennai takes five days and to Mumbai port takes about two weeks, but exporters still prefer to go by sea.
“Border trade is faster, but we mostly go by sea because the India border is not peaceful yet,” he said.
U Win Aung, another trader said that the two countries’ trade will likely rise when they can trade directly instead of using Singapore freight services.
“Our trade would be three to four times higher than before if we don’t have to rely on Singapore,” he said.
But he also believed that any increases in exports to India depends more on India’s weather and how competitive Myanmar traders can be compared to Canadian and Australian exporters.
Trade between India and Myanmar is still small compared to Myanmar’s other major trade partners, China and Thailand.
At the moment beans and pulses are the most significant commodity exported to India, while timber exports to Mumbai has dropped this year. He also said that Myanmar’s neighbours are planning to increase their respective overland trade by passing through Myanmar by 2015. He believed this will potentially bring additional revenue through service charges as well as increased job opportunities for Myanmar.
This year, businessmen from Northeast India have visited Yangon to meet with UMFCCI officials and businessmen to promote border trade. According to officials at the meetings Myanmar is increasingly considered a gateway for trade between South and Southeast Asian countries.
So far in 2011, Myanmar exported about $569 million by sea and only $3 million via the land border. Exports include about $380 million in beans and pulses and $188 million for timber, accounting for 97.5 per cent of Myanmar’s total exports to India, according to Ministry of Commerce figures. This makes up a third of India’s imports of pulses and one-fifth of timber.
Myanmar has imported about $107 million from India this year, $36 million in infrastructure materials for Indian projects, while the rest is pharmaceutical and consumer products.