Embassy of India

Duty Free Tariff Preference Scheme

In line with the Hong-Kong Ministerial Declaration of December 2005, the Government of India has implemented Duty Free Tariff Preference (DFTP) Scheme for the Least Developed Countries (LDCs) including Myanmar.

2. The Scheme provides for:

(i) Duty Free items : On about 85% of India’s total tariff lines, applied customs duty would be removed over a period of 5 years with 20% reduction each year. Two reductions have already been effected with effect from August 2008 and August 2009.

(ii) Positive List : In addition to the 85% duty free tariff lines, preferential market access as per Margin of Preference (MOP) is available on about 9% tariff lines (458 items). The MOP ranges from 10% to 100% on different items and is available on the applied rate of duty as on date of imports.

(iii) Exclusion List : Contains only 6% of total tariff lines (326 items) on which no tariff preference is available.

3. Specifically, the Scheme provides preferential market access on tariff lines that comprise 92.5% of global exports of all LDCs. Products of immediate interest to Africa which are covered include cotton, cocoa, aluminium ores, copper ores, cashew nuts, cane-sugar, ready-made garments, fish fillets and non-industrial diamonds.

4. The Scheme provides that in order to avail benefits under the Scheme, individual LDC members would submit to the Government of India a Letter of Intent and details of officials who would be responsible for issuing Certificate of Origin. The Scheme is open to all 49 LDC (list of LDCs) members including 33 LDCs in Africa.

4. The Scheme has been notified vide Customs Notifications No. 96/2008-Customs and 100/2008-Customs (Non-Tariff) dated 13th August, 2008. Subsequent notifications issued are 99/2008, 7/2009, 24/2009, 45/2009, 59/2009, 86/2009, 63/2010, 64/2010, 67/2010 and 95/2010. All these notifications are available on Government of India (Central Board of Excise & Customs) website www.cbec.gov.in

- List of LDCs.

- Status of Letter of Intent and details of Certificate of Origin received from LDCs.

- Indicative formats for submission of Letter of Intent and details for Certificate of Origin.

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.

Bilateral Cooperation

JOINT TRADE COMMITTEE

The mechanism of the 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 four times so far and has successfully directed the rapid growth of commercial relations between the two countries. The 4^th JTC was held on 27 September 2024 at New Delhi. Myanmar delegation was led by H.E U Win Myint, Minister for Commerce. He was accompanied by a officials from Government of Myanmar and a 5 member business delegation including representative from Beans and Pulses sector, Tamu – Kalay Chamber of Commerce etc. During the meeting both sides reviewed bilateral trade and investment and agreed to double the bilateral trade to US$ 3 billion by 2015. Other important decisions taken were setting up of Border Haats and to set up an India- Myanmar Joint Trade and Investment Forum. The two sides also discussed ways to improve connectivity between the two countries, and setting up of a Border Trade Committee. India has proposed to send a delegation of representatives of Indian Banking Sector to explore to discuss banking arrangements with Myanmar banks. The next round of meeting is expected to be held in 2013 in Myanmar.

BIMSTEC and other Regional Groupings

India and Myanmar are members of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and Mekong Ganga Cooperation(MGC) regional groups. The six member countries of MGC have emphasized four areas of cooperation, which are tourism, culture,education, and transportation linkage in order to be solid foundation for future trade and investment cooperation in the region. For BIMSTEC which also aims at creating an enabling environment for rapid economic development, the seven countries signed the Memorandum of Understanding on establishment of BIMSTEC Energy Center in India and reached agreement to establish its Secretariat in Bangladesh. India has also signed an Agreement on Free Trade in Goods with ASEAN of which Myanmar is a member. Myanmar which is an LDC, also enjoys easier access for its goods exported to India.”.

Table 5. Bilateral Trade of Myanmar with ASEAN & Neighbouring Countries

                                                                                                                                                                                                       (US $ millions)

COOPERATION BETWEEN CHAMBERS OF COMMERCE

At the institutional level, Confederation of Indian Industry (CII) has developed links with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). CII and NASSCOM have linkages with the Myanmar Computer Federation (MCF) since 2004. UMFCCI also has an understanding of cooperation with the Bengal Chambers of Commerce and Industry (BCCI). North East India Federation of Investment and Trade signed an MoU with UMFCCI in July 2009 on bilateral Trade. Indo-Myanmar Chamber of Commerce and Industry (IMCCI) delegation visits Myanmar annually. Myanmar India Business Chamber, Yangon also has links with Federation of Industries and Commerce in North East India. Exchange of visits by various business chambers and participationg in each others exhibitions/fairs have fortified the close and friendly ties between the two countries.