India Eyes Further Expansion Into Burmese Markets

By Kyaw Hsu Mon 30 August 2016

RANGOON — India’s investors have been eyeing Burma’s health, energy, agriculture and automobile sectors, with bilateral trade agreements inked during President U Htin Kyaw’s recent visit to the country.

During his four-day trip to India, which began on Saturday, the Burmese President and the Indian leadership, including Prime Minister Narendra Modi, agreed to promote trade and expand cooperation, particularly in agriculture, banking and energy. According to a joint statement released on Tuesday, both sides commended how trade between the Burma and India has demonstrated “resilience to global trends.”

Despite being neighbors, India’s total investment in Burma was just over US$224 million during the 2015-2016 fiscal year—significantly lower than the investments of other regional countries, like China. No new Indian investments were made during the first four months of the 2016-2017 fiscal year.

Than Aung Kyaw, deputy director general of the Directorate of Investment and Companies Administration, said that India is interested in investing in Burma’s automobile and agricultural sectors, but that those sectors are currently heavily influenced by other Asian nations.

“For example, Japan’s used car market is very powerful and China’s used agriculture machines and equipment are also taking the majority of shares in the market,” he said.

Since under the previous government administration led by U Thein Sein, India’s Tata Motors has had a presence in the automobile industry in Burma, but their products have not been able to shake Japanese dominance in the sector.

“Actually India’s import volume is quite low; Burma’s export is much higher. There are many factors why trade is still low,” said Than Aung Kyaw.

According to the Ministry of Commerce, total trade volume between India and Burma has reached US$1.17 billion, while Burma-China trade is $10.9 billion.

Economist Khin Maung Nyo said a major factor contributing to the low trade volume with India is a lack of connectivity and infrastructure in both Burma and India.

“Infrastructure development is weak. For example, the India-Myanmar-Thai highway is still under construction from the Indian side. There are still armed groups on the Indian side that can make it difficult to promote border trade, as well,” he said, also describing India’s bureaucracy as “complicated.”

President U Htin Kyaw’s visit, Tuesday’s statement said, was an effort on the part of both the Indian and Burmese governments to “identify and remove…impediments to bilateral trade,” while highlighting the importance of security along the India-Burma border.

The two sides expressed satisfaction at the progress made in the implementation of Kaladan Multi-Modal Transit Transport Project, agreeing that the completed facilities in Sittwe in Arakan State, and Paletwa in Chin State, should be operational by December 2016. Both countries’ leaders were also pleased by the signing of two memorandums of understanding pertaining to the implementation of India-Myanmar-Thailand highway project connecting the region.

The two leaders highlighted the progress made in upgrading the Yangon Children’s Hospital and the Sittwe General Hospital with assistance from India.

Both sides also agreed that continuing to export a supply of pulses from Burma to India would mutually benefit Burmese farmers and Indian consumers.