Bilateral Economic & Commercial Relations Bilateral Economic & Commercial Relations

Bilateral Economic & Commercial Relations

BILATERAL ECONOMIC & COMMERCIAL RELATIONS

India has been a major trading partner of Myanmar. Since the signing of India and Myanmar trade agreement in 1970, bilateral trade has been growing steadily. Bilateral trade rose from US$ 328 million in 1997-98 to US$ 921.19 in 2006-7 and climbed up to US$ 2.052 billion in 2015-16 (though Myanmar trade statistics are far lower). In 2014-15, bilateral trade declined to US$ 2.01 billion due to ban on export of Myanmar timber. India is the fifth largest trade partner of Myanmar (3rd largest export destination for Myanmar and 7th largest source of imports into Myanmar). Since opening up of Myanmar economy new players have started to enter the country aggressively both for trade and investment. There is a huge potential for bilateral trade, investment and economic cooperation with Myanmar.

  Myanmar is the second largest supplier of beans and pulses to India. Timber and wood products accounted for more than 27% of Myanmar's exports to India (USD 600 million) in 2013-14. Timber exports to India slowed down to USD 382 million since the ban of exports of logs from Myanmar from April 2014. India’s exports to Myanmar include, pharmaceuticals, rubber products, plastics, machinery and equipments, cotton, garments, iron products, electrical machinery mineral oil, etc. Exports of pharma, which enjoy a good reputation in Myanmar, grew from about US$ 50 million in 2010 to US$ 169.17 million in 2014-15. Growth of imports from India outpaced growth of exports to India. India is the 4th largest trading partner among ASEAN and Myanmar’s neighbours. Potential areas are pharmaceuticals, agricultural machinery, agrochemicals, electrical goods, iron and steel, pulses and beans, investment in plantations, ICT and IT-related products and services.

Table 1. India-Myanmar bilateral trade (in million US $)

Figures in brackets indicate variation from previous year(s)

Year

2011-12

2012-13

2013-14

2014- 15

2015-16

India’s exports

545.38

(70.1%)

544.66

(-0.13%)

787.01

(44.5%)

773.74

(-1.69)

1068.20

(38.15%)

India’s imports

1,381.15

(35.72%)

1,412.69

(2.28%)

1395.67

(-1.20%)

1231.54

(-11.76)

984.27

(-20.08%)

TOTAL TRADE

1,870.20

(39.75%)

1,957.35

(1.6%)

2182.68

(11.51)

2005.28

(-8.13)

2052.47

(2.38%)

(Source: DGFT, Dept of Commerce, India)

Table 2. India’s major Imports from Myanmar (in million US$)

 

Category / Items Group

2013-14

2014-15

2015-16

1

Pulses and beans

624.13

813.85

819.91

2

Wood & articles

748.74

382.12

125.03

3

Fish, meat & preparations

2.90

5.37

4.21

4

Other edible items

14.82

26.27

31.56

5

Animal or vegetable fats and oils

2.91

0.88

0.11

6

Mineral Fuels, Mineral Oils and Products of their Distillation; Bituminous substances; Mineral waxes.

0.22

0.49

0

7

Inorganic and Organic Chemicals

0.02

0

0.73

8

boilers, machinery and mechanical appliances

0.08

0.41

0.13

9

Electrical Machinery and Equipment and parts

0.41

0.11

0.08

10

Iron and Steel (Articles of Iron and Steel)

0.01

0

0.10

11

Raw Hide & Skins

0.38

1.31

0.67

12

Plastic and Articles thereof

0

0

0.02

13

Rubber and Articles thereof

0.15

0.45

0.18

14

Miscellaneous

0.9

0.28

1.54

 

Total

1395.67

1231.54

984.27

(Source: DGFT, Dept of Commerce, India)

Table 3. India’s major exports to Myanmar (in million US$)

 

Category / Items Group

2013-14

2014-15

2015-16

1

Sugars & Sugar Confectionery

8.52

0.55

457.09

2

Pharmaceuticals

137.19

169.17

152.23

3

Electrical Machinery & Equipment

82.16

124.87

73.46

4

Boiler, Machinery & parts

133.99

76.09

46.07

5

Iron & steel

104.27

74.74

30.43

6

Residues waste from the food industry

60.77

48.9

19.33

7

Cotton & yarn

56.19

46.91

49.50

8

Vehicles other than railway

32.55

44.39

37.52

9

Miscellaneous

39.55

41.74

75.77

10

Garment & textiles

15.54

30.62

39.33

11

Other metals & articles

21.61

21.02

20.43

12

Chemicals & allied products

14.99

18.27

20.43

13

Tools, implements

5.39

17.33

4.04

14

Edible items

17.31

17.03

15.53

15

Rubber & articles

12.89

10.54

7.65

16

Dairy Produce

13.68

10.2

0.11

17

Earths & stone, lime & cement

9.42

9.11

1.4

18

Plastic & articles

2.76

7.22

14.39

19

Minerals oils

8.09

3.93

2.94

20

Locomotives, rolling stock & parts

9.97

1.11

0.55

21

Fertilizer

0.17

0

0

22

Total

787.01

773.74

1068.20

(Source: DGFT, Dept of Commerce, India)

BORDER TRADE

Table 4. Trends of bilateral border trade (in million US$)

Year

Myanmar exports

Myanmar Imports

Total trade

Balance of Trade

2010-2011

8.30

4.50

12.80

3.80

2011-2012

8.87

6.54

15.41

2.33

2012-2013

26.96

11.67

38.63

15.20

2013-2014

30.92

17.71

48.63

13.21

2014-2015

42.61

18.11

60.72

24.50

2015-2016

53.02

18.62

71.64

34.40

(Source: Ministry of Commerce, Myanmar)

 

Bilateral mechanisms

India and Myanmar have signed a Bilateral Investment Promotion & Protection Agreement (BIPPA) and Double Taxation Avoidance Agreement (DTAA). These agreements are aimed at providing an easy flow of bilateral investments and business profits and for taxation-related matters. Both the agreements have been ratified by India and Myanmar.

 

Joint Trade Committee: Joint Trade Committee (JTC), chaired by the respective Commerce Ministers, has been effective in reviewing and setting policy objectives for bilateral trade between the two countries. Set up in 2003, the Joint Trade Committee has met five times so far and has successfully directed the rapid growth of commercial relations between the two countries. The 4th India-Myanmar Joint Trade Committee (JTC) Meeting was held in New Delhi in September 2011. The 5th JTC meeting was held in Nay Pyi Taw on 16-17 February 2015. Other important decisions taken were setting up of Border Haats and to set up an India- Myanmar Joint Trade and Investment Forum and Border Trade Committee, which were formed. The two sides also discussed ways to improve trade and investments between the countries, and to improving connectivity.

 

Joint Trade and Investment Forum: Following the signing of MOU in May 2012 and as also envisaged at the JTC, a Joint Trade and Investment Forum (JTIF) was established. The first meeting of the JTIF was co-chaired by Mr. Sunil Mittal, Chairman Bharti Group and Mr. Aung Win, President of UMFCCI and Chairman, Dagon International. The first meeting was held in Yangon on 7 June 2013. The Forum has made three valuable suggestions for increasing our trade and investment in order to realize the potential exists in our countries. They recommended having greater connectivity by both sea and air; infrastructure facilities at border posts; and uplifting farm and food processing industries in Myanmar.

 

Border Trade Committee: was established at Joint Secretary Level to discuss matters related to border trade. The first meeting was held in Moreh, Manipur; the second meeting was held in November 2013 in Tamu, Myanmar; and the third meeting was held in December in New Delhi. Both sides reviewed the decisions taken in previous meetings and identified ways to improve border trade including trade facilitation at the border posts. Similarly a Border Haats Committee was also established at JS level which has met once in New Delhi.

 

 Textile and Sericulture Development: Following the visit of CITM to Myanmar in June 2013, Joint Secretary (Textiles) visited Myanmar in November 2013 and discussed cooperation in textile and silk industry with Myanmar. On the sericulture sector, a two-member technical team from Central Sericulture Board visited Myanmar on 13 &14 February 2014 and held detailed discussions on sericulture development and on the draft MOU for cooperation in sericulture.

INVESTMENT

India is presently the ninth largest investor with an approved investment of US$ 730.649 million by 22 Indian companies, out of the total estimated investments of US$ 58.03 billion from 41 countries by 1001 enterprises (as of 29 Feb 2016). Most of India’s investments have been in the oil and gas sector. In the recent past the following Indian companies won major contracts/investments. TATA motor has transferred technology of truck assembly plant in Magway, Myanmar in association with Myanmar Automobile & Diesel Industries Limited (MADI) with the GOI support. The plant deals with highly flexible chassis & frame assembly line along with a cab manufacturing, painting and trimming activities with a capacity to deliver 1000 vehicles per year. In 2013, TATA motors opened its first sales, service and spares showroom in Yangon. TVS motors (two wheelers) launched dealership in Mandalay and Myitkyina. Sonalika Tractors, New Holland tractor, Escorts and their farm implements from India have good presence in Myanmar. In addition to above, various Indian companies like Birla Corporation, Avantha Group, Parry Agro Industries, Amalgamated Tea Plantations Ltd., Lucky Exports, Oberoi group, ITC Hotels, Bharti Airtel, Kirlosker Pumps, Cairn Energy India ltd., Asian Oilfield Services India , Kanachur Industries India Ltd., Royal Solar, GMR, JK Paper and Cement, Shree Cements, etc. have shown considerable interest in investing in Myanmar.

 

Punj Lloyd Ltd, an Indian contractor executed a part of Myanmar China Oil Pipeline Project and Myanmar China Gas Pipeline Project along with South East Asia Crude Oil Pipeline Company Limited and South East of Asia Gas Pipeline Company since May 2011 with an estimated total investment of US $ 475 million. Larson and Toubro involved in an offshore project at M9 &M11 blocks in Gulf of Martaban, Myanmar, Zawtika Development Project, with a cost of US$ 250 million. The project involves three wellhead topsides and three jackets weight 7000-8000 MT installed in a water depth of 130-150 meters and 21 km of 18 inches subsea pipelines. The other project won by them was the Yetagu offshore Project: Engineering procurement fabrication and installation of wellhead platforms and pipelines at Yetagu offshore field with a cost of US$112 million. Vihaan Networks Ltd completed a project of USD 5 million for installation of solar powered telecommunication tower projects on Mandalay- Yangon highway (600 km). In the wood based industries sector as the export of unprocessed logs has been banned by Myanmar since April 2014, a number of Indian companies namely Centuryply, Greenply Industries, MAK Plywood, B.S Progressive and Fine Ply have set up their wood-based industries with a total estimated investment of about US$ 35 million. Global Protek is setting up a PVC plant with Thiha Tun Company at Monwya, Sagaing Region. Two vocational training institutes are being set up by George Telegraph, Calcutta in joint ventures with two local firms both at Monwya and Mandalay.

 

Tata Power signed an Memorandum of Understanding (MoU) with Ministry of Electric Power, Government of Myanmar on 11 April 2013 for an imported coal fired power project at Ngayok Kaung in Ayeyarwaddy region, Myanmar. It is expected to be commissioned in 2019-20. Tata Power is also desirous of participating in hydro/ gas or renewable generation and also power distribution business opportunities in Myanmar and seek the support of Government of India and Myanmar in this respect.

 

Potential sectors for Indian investment: Power, Renewable Energy, Agri-business, food processing, construction related industries, hospital & Healthcare, vocational training & Education, Mining, Oil and Gas, Refinery, Fertilizer, Pharma & Iron and steel.

HYDROCARBON AND ENERGY

An MoU on Co-operation in the Petroleum Sector between Ministry of Petroleum and Natural Gas of India and Ministry of Energy of Myanmar was signed during Hon’ble President’s visit to Myanmar in March 2006. Since then both private and public companies from India have shown interest in exploration and development activities. Following the visit of Myanmar electric power minister to India in April 2015, a working level/technical level meeting to supply 2-3 MW electricity to Tamu (Sagaing) from Manipur was held in Tamu in August 2015.

 

ONGC Videsh Ltd. (OVL) and GAIL in 2006 acquired 20% and 10% participating interest in the A1/A3 blocks (Shwe Development and Production Area). In 2010, ONGC withdrew due to poor prospects from the AD-2, AD-3 & AD-9 deepwater blocks to which it had been given PSC rights. ESSAR acquired stakes in offshore block A2 and onshore block 'L' in 2005 and had undertaken some exploratory work but there was no significant move since 2009 which contract has expired. In 2011, Jubilant Energy got exploration and prospecting rights on PSC-1 onshore block (3600 km2) along with consortium of Parami Energy Development Co Ltd, Myanmar. They were keen on securing similar rights in the 2013 round of bidding for one or two more adjacent onshore blocks but could add one. However, ONGC won two blocks viz., B2 and EP3 of the onshore bidding round 2013 for which PSC were signed in 2014. With regard to offshore bidding round 2013, Reliance (2 blocks-M17 & M18) and Oil India Limited with Oil Max and Mercator (2 block-YEB & M4) won shallow water blocks in March 2014;and signed PSC in 2015.

BANKING & INSURANCE

Cooperation in banking sector is crucial for investment and trade. A banking delegation led by Shri Ashok Nigam, Joint Secretary visited Myanmar in March 2012 to expand cooperation in banking sector. During the visit of PM to Myanmar in May 2012, Myanmar side welcomed the training of Myanmar officials in the Banking sector by Indian banks and for cooperation in the Agriculture Banking sector; and between Reserve Bank of India and the Central Bank of Myanmar. III delegation visited Myanmar in November 2015 to explore cooperation between the Institute and Myanmar insurance.

 

United Bank of India signed a number of banking agreements with banks of Myanmar (MFTB, MICB, MEB, and 9 private banks) in order to facilitate trade transactions between the two countries. United Bank of India (UBI) has opened its representative office in November 2012. For trade transactions UBI has opened USD account in the United Overseas Bank in Singapore. UBI singed MOU with MFTB, MICB and Myanmar Economic Bank (all three are state owned banks) for correspondent banking. In addition to UBI, Bank of India, State Bank of India and EXIM bank have opened representative office in Yangon. Further, SBI was granted commercial banking license in March 2016. RBI has approved UBI for opening a USD Vostro account by Myanmar Economic Bank in UBI Moreh branch. SBI has opened facilities such as ATM, Forex and duty payment at SBI branches at Moreh and Zowkhatar. New India Assurances Limited has opened its representative office in Yangon in June 2015.

 

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2017-08-03 13:31:16
 
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