Embassy of India

Bilateral & Economic Relations

India and  Myanmar enjoy cordial relations; and the geographical proximity has facilitated the long-standing trade relations across the land and sea routes. Myanmar has been a major trading partner of India. India Myanmar Trade has immense potential. Since the signing of India and Myanmar trade agreement in 1970 the bilateral trade has been growing steadily with slight decline in the 80's. The bilateral trade doubled in 2005-06(US$569 million) and further claimed up to US$ 1.87 billion in 2011-12. Now India is the fourth largest trade partner of Myanmar (3^rd largest export destination for Myanmar and 5^th largest source of imports into Myanmar). However, the actual trade between India and Myanmar is difficult to fathom due to trade via third country (Singapore), unaccounted unofficial trade across borders and inadequate availability of data.

Agriculture sector dominates the bilateral trade. Myanmar is the second largest supplier of beans and pulses to India, next only to Canada, accounting for one third of India's total requirements of imported pulses. India imported pulses and beans US$ worth 1090 million from Myanmar. Also, Myanmar contributes to nearly one fifth of India's imports of timber. Timber and wood products accounted for more than 37% of Myanmar's exports to India (US$ 400 million). Other items of India’s exports include pharmaceuticals products, steel and iron products, electrical machinery, Mineral oil, Rubber and articles, plastics etc. Pharmaceutical products accounts for 23% (nearly US$ 76.09 mn) of India's exports to Myanmar in 2011-12.  Over 10 Indian companies dominate Myanmar pharma market (about 40 %)

INDIA MYANMAR BILATERAL TRADE

India-Myanmar Bilateral Trade

                                                                                                                                                                                                          (in Million US$)

(Source:DGFT, Minisry of Commerce, New Delhi)

There is a large potential for bilateral trade, investment and other forms of economic cooperation with Myanmar. The 4^th India-Myanmar Joint Trade Committee (JTC) Meeting held in New Delhi in September 2011, both countries agreed to double the bilateral trade to US$ 3 billion by 2015 which seems achievable considering current trade trends. Growth in imports from India outpaced growth in exports to India. In fact, value of imports from India was significantly increased from US$ 51.025 million to US$ 94.30 million. India stood 4^th largest trading partner among ASEAN and neighboring countries of Myanmar.

Private entrepreneurs from both countries have shown increasing interest in conducting bilateral trade and commerce. This has been reflected in the large number of visits by leading Indian business groups and trade inquiries by Indian and Myanmar businessmen. 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.

INDIA MYANMAR BORDER TRADE

Table 2. Trends of bilateral Border Trade

                                                                                                                                                                                                                       (in million US$)

(Source: Department of Border Trade, Ministry of Commerce, Myanmar)

Major exports into Myanmar: Cotton yarn, auto parts, soya bean meal and pharmaceuticals,

Major imports from Myanmar:Betel nut, dried ginger, green mung beans, black matpe, turmeric roots, resin and medicinal herbs.

According to the Myanmar Department of Border Trade, the border trade turnover between India and Myanmar has ranged from US$ 10 to US$22 million, though it is probably higher if the huge unaccounted informal trade is also taken into account.

Table 3. India’s Imports from Myanmar

                                                                                                                                     (in million US$)

                                                  (Source: DGFT, Ministry of commerce, New Delhi)

Table 4. India’s Exports to Myanmar

                                                                                                                                  (in million US$)

 (Source: DGFT, Ministry of commerce, New Delhi)

FOREIGN DIRECT INVESTMENT

India has jumped to the tenth largest investor from its thirteenth position an approved investment of US$ 273 million out of total estimated investment of US$ 41.4 billion from 32 countries in 529 projects, as of December 2012.

 New Foreign Investment Law has been passed by the Myanmar Government on November 02, 2024 and the by-laws and rules are framed by the respective departments/ministries. 100 % FDI is allowed. The controversial clause of requiring US$5 million minimum investment has been dropped.  It also increases the maximum shareholding of foreign parties to 50 percent in certain sensitive sectors, including manufacturing, farming, agriculture and fisheries. Myanmar new investment law allows foreign investors to lease land for an initial period of 50 years with an option to renew. Foreign companies will be entitled to tax exemption for first five years and no-tariff on raw materials and allowed to exchange and transfer investment.

India and Myanmar have signed Bilateral Investment Promotion Agreement (BIPA), Double Taxation Avoidance Agreement (DTAA). These agreements provide e entrepreneurs from India and Myanmar for free flow of bilateral investments and business profits will only be taxable in the source State. Both the agreements have been ratified by India and Myanmar. Attempts by Governments of India and Myanmar to enter into a G-2-G Agreement for trading of pulses (black matpe, lemon toor and urad) have not succeeded. In 2008 United Bank of India signed three banking agreements with banks of Myanmar (MFTB, MICB and MEB) in order to facilitate trade between the two countries.

With Myanmar taking promising steps towards becoming a market economy and opening up for investment, Indian business community has also stepped up its activity in Myanmar. Business delegations have been visiting Myanmar regularly and a number of business events are taking place in Myanmar. Major contracts won by Indian companies: Jubilant Energy India- PSC-1 onshore bloc; Punj Lloyd; Jindal Saw; Welspun India; Vihaan Networks Ltd (VNL) India ; Nipha Exports and Troika Exports; L&T

ECONOMIC COOPERATION:DEVELOPMENT PROJECTS

The trade and investment cooperation between Indian and Myanmar is still below the potential. In order to bridge the gap, the Government of India has taken a number of steps which include bilateral projects. These development projects, in particular the cross border projects, have become an essential element of the policy formulated in 1991 for building good neighborly relations and fostering mutually beneficial cooperation with Myanmar.  The projects are supported by India through training, provision of expert knowledge, line of credits and grant-in-aid. Some of important projects are Kaladan Multimodal Transit Transport Project, Trilateral Highway, Rhi – Tiddim road, Renovation of Thanbayakan Refinery; Setting up of an IT University in Myanmar, Advance Center for Agricultural Research and Education, Yezin, upgradation of Yangon Children Hospital and Sittwe General Hospital. Other projects such as Tata Motors Heavy Truck Assembly Plant, Industrial Training center at Pakokku and Myingyan, Tamanthi and Shwezayi Hydropower projects will offer scope for enhanced future commercial cooperation.

TRADE PROMOTION ACTIVITIES

Indian commercial activities have increased in 2012.

Some of the major events include the following:

• India Product Show (March 2012);
• NEFIT’s car rally (March 2012) with over 60 participants (including over 35 business community representatives) from Guwahati to Yangon and back, the much successful Enterprise India show 2011 organised by CII in November 2011 (after a long gap of 7 years) in which over 60 Indian companies participated and a Seminar on the margins in which 20 leading Indian business companies participated;
• Myanmar India Business Chamber(MIBC) organized two Education fairs (March 2012 and May 2011) to create Indian education awareness in Myanmar;
• The Indian Chamber of Commerce(ICC)mounted a delegation to Myanmar of businessmen and policy makers from the north-eastern states of India from 26-31 August 2012. The business group included representatives from different sectors including power, oil, gas, textile, steel, construction, rubber, tea, tourism, teak and timber, IT,  telecommunication etc.
• Federation of Indian Export Organisations (FIEO) organized an ‘India Show’ in Yangon from September 3-7, 2012.  The ‘India Show’ consisted of a Buyer-Seller Meet and display of Indian products. The 30 member delegation mounted by FIEO had representatives from various sectors including solar energy, telecom, textiles, engineering goods, handloom and handicrafts, jute products, hardware, hand tools, spices, garments, artificial jewellery and incense products.
• A delegation each from Export-Import Bank (EXIM) and Reserve Bank of India (RBI)visited Myanmar in August and September, 2012 respectively visited Myanmar to discuss mutual cooperation in banking sector.