India is choosy about eastern neighbours

Written by ASHOK B SHARMA | Updated: Dec 5 2007, 05:11am hrs
India has been selective in developing its relationship with its eastern neighbours. Over the years, Indias merchandise trade with Asean remained concentrated in five major countries, namely Malaysia, Indonesia, Singapore, Thailand and to some extent, the Philippines.

In June 1997, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMST-EC) was set up at a sub-regional meeting in Thailand comprising countries like Bangladesh, India, Sri Lanka and Thailand. Subsequently Myanmar, Bhutan and Nepal joined up and BIMST-EC decided to work out a free-trade framework agreement. India expected that BIMST-EC would be the gateway for strengthening its relationship with Asean.

The Mekong-Ganga Cooperation (MGC) came into being from November 10, 2000 at Vientiane and the first ministerial meeting was held at that time. MCG comprises six countries namely, Thailand, Myanmar, Cambodia, Laos, Vietnam and India. The emphases are on four areas of cooperation, which are tourism, culture, education and transportation linkage in order to be the solid foundation for future trade and investment cooperation in the region.

But Indias policy over the years has been to develop relations with the influential countries in east and south-east Asia like China, Japan, South Korea, Malaysia, Indonesia, Thailand, Singapore and the Philippines. India has not shown a great deal of interest in some of its other smaller neighbours.

The Cambodian prime minister, Samdech Hun Sen, for instance, was not accorded a ceremonial welcome when he landed in Delhi on July 9, this year. He had to leave the country immediatelythe reason wasthe nation was mourning the death of the former prime minister, Chandra Shekhar. However, Sen is again visiting India on December 8, this year.

In bilateral trade with Cambodia, Laos and Vietman, the trade balance is heavily weighed in favour of India, while in bilateral trade with Thailand and Malaysia, the trade balance is not in favour of India. In 2006-07, Indias exports to Cambodia grew by 115.63% to be at $52.16 million, while its imports from that country was only $1.58 million.

Similarly, Indias exports to Laos in 2005-06 grew by 106.55% to be at $5.47 million, while its imports from that country was only $0.10 million. Indias exports to Vietnam in 2006-07 grew by 42.27% to be at $982.60 million, while its imports from that country was only $167.65 million. Vietnam has rich deposits of natural gas and oil that can benefit India in meeting its energy needs. If India develops better economic cooperation with small countries in the region namely, Cambodia, Laos and Vietnam, it would help to boost its presence in the Asean region. Also, there is a need to improve trade and economic cooperation with Myanmar for strategic reasons. Myanmar has good reserves of gas and oil that can help India in meeting its energy needs.

Myanmar grows and exports pulses to India, which is in shortfall in this essential agro commodity. Increase in border trade with India can help the landlocked northeastern part of the country with better prospects. At present border trade in select 22 items is permitted through three select points, namely Moreh in Manipur, Zowkhathar in Mizoram and Lungwa in Nagaland. The border trade is severely limited. Indians are allowed to cross the border with the assurance that they would return on the same day. It has been proposed to link United Bank of India at Moreh post in Manipur with Myanmarese Economic Bank at Tamu. If this happens, the two banks would avail the letter of credit facilities under which Indian rupee and Myanmarese kyats can be legally converted.

Cooperation between India and Myanmar is also essential to check narcotic trade. Myanmar can act as Indias gateway to the Asean through the land route.

Indias relations with Myanmar over the past years had been severely affected due to political reason as the former had criticised the latters martial regime. Recently, there has been a shift in the Indias attitude towards Myanmar and the relationship between the two countries is inching for better. It would be better to integrate Myanmar into South Asian economy by inviting it to join Saarc. India should win over less important economies in the Asean region and counter the growing presence of China, Japan and Korea.