Indo-Asean trade ties likely to get a boost with rail link

Written by Surabhi Rastogi | Surabhi | Rituparna Bhuyan | New Delhi | Updated: Oct 24 2009, 04:55am hrs
In a move that could further deepen economic ties between India and the ten-member Association of South East Asian Nations (Asean), the country is exploring the possibility of a rail link with the economic block to facilitate containerised movement of goods. Both the sides had inked a duty-free trade agreement in August this year to strengthen economic relations.

There is a lot of potential for the trade between India and Asean countries that can be carried out through the railways. We are thinking in terms of designating a cargo hub in one of the Asean countries, which can be linked with India through a direct rail line, a railway ministry official told FE.

Asean, a key pillar of Indias Look East Policy accounts for 10% of the nations exports, but trade is carried mostly through the sea route. The only transportation link with the region is through a road in Moreh in Manipur and Tamu in Myammar. But the value of trade through this land route is minuscule and is limited to local goods. Indias rail link with the Asean region will also have to pass through Manipur. Significantly, China is already at an advanced stage in building transportation links with the Asean countries.

With a broad gauge running throughout the region, infrastructure would not be a problem and the rail link could be connected on the existing line. A rail line can be built between India and Thailand through Bangladesh and Myanmar, the ministry contends.

Trade experts point that cross border infrastructure is critical in achieving greater economic integration. Physical transportation link between India and Asean is the next level in economic ties between both the sides, said Biswajit Dhar, director general of Research and Information System for Developing Countries. Political functionaries from Asean also agree. In a recent interview with FE, Thailands deputy prime minister Korbsak Sabhavasu had said, India will have to come in to Asean through Myammar. It is an ambitious thought.

There is already a railway line connecting India with Bangladesh but the only hurdle is the missing link in the form of Myanmar. There is roughly about 350 km between India and Myanmar that does not have a rail line. Of this about 150 km is in Indian territory.

While India did get a feasibility study done by RITES for a rail line between Jiribam-Moreh in India and Tamu-Kalay-Segyi in Myanmar in 2007, which is estimated to cost Rs 4,280 crore, nothing concrete has materialised so far. The ministry of external affairs is still pursuing the talks with the Myanmar government on this.

Rail Bhawan officials said they would push for it again in wake of the plans for a rail line with the Asean countries. The United Nations Economic and Social Commission for Asia and the Pacific has for long been pushing for a 1,14,000-km Trans Asian railway network that will connect Europe with Asia. In this direction one of its key proposals has been to link Asean countries with South Asia. The intergovernmental agreement on the rail network has come in to force from June, 2009 and will need investments worth $15 billion to connect the missing links.