Indo-Myanmar relations and Northeast India: Peace, Security and Development, Lecture of MOSAIC 2015- 2016, TISS, Mumbai,January 22, 2016
Long consigned to the periphery of Indian geo-political imagination and viewed as a security liability for the Indian republic, the country’s Northeast is now seen as the overland bridge to connect the Indian mainland with South-east Asia and possibly China. The present government seems to have upgraded this engagement from ‘Look East’ to ‘Act East’. Its policy framework accounts for both security (linking up to South-east Asian countries worried over China’s assertiveness) and economics (going for BCIM and K2K). But India’s Northeast can only link up to South-east Asia by land through Myanmar. Which is why Myanmar, itself a battleground for influence between China, India, Japan, ASEAN and the West, holds the key to the success of India’s “Act East’ thrust. Myanmar is in transition after the November parliament elections led to a NLD landslide and the military promised a peaceful transfer of power. But restoration of democracy remains a far cry because the military retains its grip on the national power structure — three crucial ministries of Border Affairs, Defence and Home will remain with military and one-fourth of all members in both houses of the Myanmar parliament will be men in uniform. That almost surely cuts out the possibility of major amendments to the 2008 Constitution, which was meant to provide the military a way to hang on to power regardless of the electoral mandate.
I intend to provide a brief overview of India -Myanmar relations, touch on the various issues that influence it , look at how the Northeast figures — and will figure — in India’s Myanmar policy and how developments in both the Northeast and Myanmar’s border regions will impact on the country’s ACT EAST policy . It will also look at the ‘China factor’ in India-Myanmar relations and how that will play out in years to come. A close focus on the trans-border insurgencies in Northeast and Upper Myanmar and Delhi will also help address the issues of peace and security while a look at the trans-regional processes like BCIM and K2K will help address issues of connectivity.
INDIA’S Myanmar policy in the post-colonial era has always been influenced by the ‘China factor’. Addressing the Burma Council of World Affairs on 20 July 1950, Burmese scholar-diplomat U Tun Nyoe said: ‘India’s special interests in Burma cannot be denied owing to her geographical proximity. Her own security requires that no foreign power has a permanent interest in Burma.’ In fact, way back in 1945, Jawaharlal Nehru had even talked of a ‘South Asian Federation’ that would include Afghanistan, Burma and Iran along with India (at that time undivided).
Immediately after independence, when Communist insurgency threatened to bring down Myanmar’s federal government, India promptly extended military and financial help even before Myanmar had asked for it. Myanmar Prime Minister U Nu said: ‘Why India gave us help is her concern, not ours. India was herself concerned with growing Communist guerrilla activity at home and a Chinese backed Communist insurrection spreading out of Burma to engulf the whole of India’s Northeast was one of the worst case scenarios tormenting Indian intelligence in the early 1950s. Speaking at the UN General Assembly on 17 April 1953, V.K. Krishna Menon said: ‘What hurt Burma would hurt India because of links of friendship, geography and history between the two countries.’
After the 1962 military coup in Burma, India-Burma relations deteriorated. India backed the cause of democracy in Burma and protested strongly against the heavy-handed treatment meted out to Indian settlers during New Win’s nationalisation drive. But the fear of China and its support for the Burmese Communists drove General Ne Win back in to Indian arms. In 1968, the Burmese Communists unleashed a fierce offensive in the border regions to expand their liberated areas. By then the Naga and Mizo rebels had started using Burmese territory, both for locating bases and for reaching China for training. While Ne Win needed Indian support to fight the China-backed Communists and other ethnic rebels, India need Burmese support to block the North Burma corridor used by its own rebels to access Chinese training and weapons. On 29 March 1969, at a banquet hosted by Indian Prime Minister Indira Gandhi in Delhi Ne Win remarked: ‘Though we (India and Burma) may not agree on every single point, we have similar responses to many problems, specially on some international issues [read China].’
The ‘rebel factor’ has emerged as one of the most significant issues in India-Burma relations. Between 1966 (when the first ‘Naga Army’ batch reached China for training through Burmese territory) to 1980 (when Beijing stopped arming and training the Northeast Indian rebels), China had trained several batches of Naga and Mizo rebels and a few dozen Manipuri rebel leaders led by Nameirakpam Bisheswar Singh. It provided sanctuary, weapons and training to an entire generation of Burmese Communist insurgents. But China stopped supporting the rebels of Northeast India and Burma in the early 1980s, ending the ‘export of revolution’ phase of Chinese foreign policy.
In the early 1950s, the Naga National Council (NNC) in India’s Naga Hills came into contact with the Eastern Naga Regional Council (ENRC) that was active in Burma’s Sagaing region which has some Naga-inhabited areas. The ENRC joined the NNC in propounding the concept of a ‘Greater Naga Nation’ in which Nagas of India and Burma would live together. The ENRC provided the NNC the first links to the Kachin Independence Army (KIA) and helped the Naga Army fighters reach China. As the Indian Army tightened its grip in the Naga Hills and East Pakistan was lost as a safe base area in 1971, the NNC turned to Burma’s Sagaing region to set up some major bases.
When the NNC disintegrated after the 1975 Shillong Accord, its breakaway faction, the National Socialist Council of Nagaland (NSCN) shifted its main headquarters to the remote Tepak Mountains in Sagaing division. With S.S. Khaplang as their vice-president, the NSCN was firmly entrenched amongst the Hemi Nagas of western Burma. During a visit to the NSCN base area in 1987, this writer found that the Manipuri rebels as well as the United Liberation Front of Assam (ULFA) had also set up bases around the NSCN headquarters. In 1985-86, these rebels faced two Burmese military offensives but managed to beat them back because the troops found logistics a nightmare in the inhospitable terrain of the Sagaing Mountains.
The MNF maintained a large number of bases in Burma’s Chin Hills, further south of Sagaing, though their main headquarters were located in Bangladesh’s Chittagong Hill Tracts. These bases were dismantled when the MNF signed an accord with the Indian government in 1986. But over the years, the Northeast Indian rebel presence in Burma has increased. Now, the NSCN (Khaplang faction), the ULFA and the Manipuri rebel groups maintain at least 27 camps in Burmese territory. The NSCN’s Muivah faction pulled out of Burma after the spat with Khaplang that led to the split in the NSCN in 1988. While Khaplang’s fighters are based in the wild Tepak Mountains inside Sagaing division, the ULFA has few bases close to the Indian border. The Manipur Peoples Liberation Front (MPLF), a coalition of three leading Meitei rebel groups, has a number of bases around the town of Tamu and close to Molcham salient, while their main base area in Manipur’s Sajit Tampak area is located right on the border with Burma.
These rebel bases in Burma serve three important purposes for the Northeast Indian insurgents: (a) They sheltered the rebel leadership after East Pakistan was lost as a safe base area. (b) They serve as a crucial link zone through which rebels could go to China for training and weapons. (c) They provide a safe training and regrouping zone where new recruits can be taught the art of guerrilla warfare and active guerrilla units can be shifted out to when under pressure in India.
In November 2001, the Burmese army raided four Manipuri rebel bases, rounded up 192 rebels and seized more than 1600 weapons. Surprisingly, the Burmese later released these rebels including UNLF chief Rajkumar Meghen. While the Burmese junta claims that they attacked Khaplang’s base area in December 2004 and killed nearly 100 rebel fighters, they are unable to explain why they released the Meitei insurgents in 2001 and are not cracking down on their bases now. The Naga bases are located in much more difficult terrain than those of the Manipuri groups or the ULFA. It could well be that the Nagas are Burmese nationals whose demand for being a part of Greater Naga state is seen as a threat to Burmese sovereignty by the military junta. The Manipuri and the Assamese rebels do not covet Burmese territory – they are temporary guests and the junta can leverage their presence to bargain with India
As India’s relations with Burma improved in the mid-nineties, the Burmese army even participated in a joint operation ‘Golden Bird’ in April-May 1995. The 57 Indian Mountain Division was blocking a large rebel column of more than 200 NSCN, ULFA and Manipuri fighters who had picked up a huge consignment of weapons south of Cox’s Bazar (on the Bangladesh coast) and was moving through the Mizoram-Burma border towards Manipur. But, as India awarded the Nehru Peace Prize to Aung San Suu Kyi, the Burmese junta pulled out of the joint operation, allowing the trapped rebel column to escape. An upset Indian eastern army commander, Lieutenant General H.R.S. Kalkat remarked later: ‘India should leave its Burma policy to the army. We are soldiers, they (Burmese junta) are soldiers and our blood is thicker than the blood of bureaucrats.’
During the BJP’s tenure in power, the military-to-military relations between India and Burma improved dramatically. Burmese military chief, General Maung Aye visited India twice, once to meet the regional commanders at Shillong and then to meet his counterpart in Delhi. Indian Army chief, General V.P. Malik visited Rangoon twice in January and July 2000. During Maung Aye’s second visit to Delhi, India and Burma signed an agreement for ‘increased cooperation to tackle cross -border terrorism and drugs trafficking.’ A BBC analyst wrote of this visit: ‘While India was successful in getting Burma to make arrangements for conducting joint military operations against the rebel groups in future, Burma managed to strike deals for supply of military gear.
Ever since this agreement, the Burmese troops occasionally claimed attacking Khaplang’s bases often without being able to dislodge him from the Tepak mountains. The Indians have obliged Burma by cracking down on Chin and Arakanese rebel bases. In 1998, the Indian military betrayed the National Unity Party of Arakans (NUPA), by drawing a large contingent led by their military wing chief, Khaing Raza, to the Landfall islands in the Andamans. Six NUPA leaders, including Raza, were later shot dead. 34 of these Arakanese guerrillas are still lodged in a prison at Port Blair, charged with gunrunning. The army is so far stonewalling investigations into this controversial ‘Operation Leech’.
Operation Leech marked the end of India’s limited cultivation of the Burmese rebel groups and pro-democracy coalitions that had climaxed in the covert quid pro quo between Indian intelligence and the Kachin rebels. After the Kachin Independence Army (KIA) became the main source of training and weapons for all northeastern rebel groups, India’s external intelligence agency, Research and Analysis Wing (RAW), cultivated the KIA for six long years, supplying them weapons and even allowing them to carry a limited trade in jade and precious stones using Indian territory. The KIA stopped aiding and abetting the Northeast Indian rebel groups after its chief, Maran Brangsein, met the RAW chief in Delhi twice.
India is now strengthening its military-to-military understanding with Myanmar for tackling her northeastern rebels after having tried to contain them through an understanding with the Burmese ethnic rebel groups like the KIA in the late 1980s and early 1990s. Burma has so far neither agreed to joint operations suggested by India nor obliged her by undertaking a comprehensive Bhutan-style operation along her western borders. The Thein Sein worked out a ceasefire with Khaplang’s NSCN faction in 2012 which has remained in effect despite Khaplang breaking off his ceasefire with India in March 2015, after which he launched attacks on Indian forces and Delhi claims having attacked one of his bases inside Myanmar. Khaplang and ULFA’s Paresh Barua have spearheaded the formation of an anti-Indian rebel coalition called ULFSWEA which has four groups — NSCN-K, ULFA (I) .KLO and NDFB (S). The Meitei groups, though they cooperate with Khaplang and even stage joint attacks, have not joined the coalition.
India is pushing Myanmar to
(a) force Khaplang to discontinue his attacks on Indian forces
(b) do away with the UNLFSWEA and push out other anti-Indian rebel groups from his area of influence in Sagaing
(c) to join the process of development that could be undertaken with Indian funding of the backward tracts of Sagaing
(d) to help the area develop to end its remoteness because India does want a major rebel formation hovering over an area through which is trying to develop its multi modal connectivity to Myanmar and the rest of south-east Asia.
India’s troubled Northeast sits on the western corner of Burma’s infamous Golden Triangle, one of the two largest opium producing regions in the world. The International Narcotics Control Bureau (INCB), in a global report, has said that more than 70% of the amphetamines available worldwide are produced in countries around the Golden Triangle, particularly Burma. The INCB report ranks Burma as second to Afghanistan in opium production, but this position could well change in a year or two. It says international pressure compelled Burma’s military rulers to undertake tough anti-drug measures that led to a 40 to 50% fall in Burma’s opium production from the peak of around 2500 tonnes in 1996 to around 1700 tonnes in 2001 after a ten-fold increase in between 1976 and 1996. Between 1985 and 1995, Burma’s heroin output rose from 54 tonnes to 166 tonnes. By all indications, this could now rise again after reaching a plateau or a marginal drop in the last seven years.
What is more worrying about the ‘Golden Triangle’ is the eight-time rise in the production of amphetamines from an estimated 100 million tablets in 1993 to 800 million tablets in 2002. Amphetamines are cheap and popular as performance-enhancing drugs, as much in demand in Calcutta or Delhi as in London or New York. Recent huge seizures of amphetamine tablets in Northeast India clearly indicates that India has more to worry about Burma than just insurgency. Heroin and amphetamines are likely to find their way into Indian cities and border towns on a much larger scale than ever before.
Two important developments have taken place in the ‘Golden Triangle’ that augurs ill for India: First, traditional drug lords like Khun Sa have been eclipsed by ethnic rebel armies like the United Wa State Army in the Triangle. The Wa formed the bulk of the fighting force of the Burmese Communist Party until they revolted against the Burmese commissars in the late 1980s. The once strong BCP just withered away and its Wa fighters took to drugs. Now, the UWSA monopolises the amphetamine output to the extent that a Time magazine cover described the Wa as the ‘speed tribe’.
Second, the Wa monopoly over amphetamines has forced traditional drug lords like Khun Sa to reinforce their control over the heroin output. Khun Sa has tried to establish monopoly on the heroin export routes to Laos and Thailand from the Golden Triangle. Three years ago, he imposed a hefty 60% ‘profit tax’ on smaller cartels, forcing at least three of them to relocate their drug refineries to the borders with India’s Northeast and China’s Yunnan province. These three cartels – headed by Zhang Zhi Ming (former BCP officer), Lo-Hsin Nian and the Wei brothers – have between 14 to 18 refineries in western Burma, mostly in the Sagaing division and the Chin Hills but some as far low down as the Arakans.14
In January 2002, the six countries – Thailand, Burma, Laos, Cambodia, Vietnam and China – set up the ‘Joint Special Task Unit 2002’ to coordinate the fight against drug trafficking. India is yet to join this initiative, despite clear indications that Burmese drug cartels are increasingly using Northeast Indian states to send their deadly cargo into Bangladesh, mainland India or Nepal en route to regional and global markets. Seizures of heroin and amphetamines have risen in most Northeast Indian states and they are believed to be the tip of the iceberg.
The threat posed by the increased drug trafficking to India and particularly to its sensitive northeastern region are threefold:
Trafficking through the northeast has led to a rise in local consumption. The region’s drug addict population is currently estimated at around 1,20,000 by the Indian Council of Medical Research (ICMR) . Many addicts use intravenous injections to push drugs and become HIV positive. The number of HIV positive cases in the Northeast has risen to around 20,000 in the last two decades.
Several military and paramilitary officials have been arrested for smuggling heroin or lesser drugs in Northeast India. The drug cartel has sucked in several politicians, bureaucrats and even security force officials to carry on their illicit trade. Unless checked firmly, this trend is dangerous for the morale of Indian security forces.
Ethnic separatists in India’s northeast are taking to protection of drug mafias as a quick way to raise funds. Some like the Manipur Peoples Liberation Front continue to fiercely resist the drug traffickers, but other groups, including the NSCN, have taken to the drug trade, as seizures from their camps in recent months indicate. The Burmese drug lords are also encouraging tribal farmers to plant poppy. Unless these new plantations are promptly destroyed and gainful agricultural alternatives provided to the farmers, the India-Burma border will soon be dotted with poppy fields feeding the processing plants in western Burma. A rebel-drug lord-officialdom nexus is emerging in India’s Northeast in a repeat of the Colombian scenario.
Early in this millennium, an upcoming drug lab set by the ‘Ah Hua’ network of Yunnan and North Burma in Calcutta’s posh Salt Lake area (in an apartment owned by a senior police official) was busted by the Narcotics Control Bureau. Six Chinese and Burmese nationals arrested from that apartment confessed that it was much easier to get the requisite quantity of poppy into Calcutta and sell the drugs in the Indian market than get tonnes of processing chemicals like acetic anhydride to remote Burmese locations from Calcutta.
India sees a major threat in the rising flow of narcotics from Burma’s ‘Golden Triangle’. It will have to engage Burma closely to fight this menace. Without further delay India should, and finally perhaps will, join the six-nation task force set to fight narcotics in the Mekong region, but the state of bilateral ties between India and Burma will be crucial to its efforts to keep out Burmese drugs from South Asia. Tackling the drug menace emanating from Myanmar is a major concern for India.
When the Naga rebels started their guerrilla campaign in 1956, they depended on World War II weapons left behind by the Japanese and the Allies. A few years later, Pakistan started arming the Nagas and the Mizo rebels in a big way. Later, the rebels received most of their weapons from China, as Pakistani support waned after the break-up of that country in 1971. As the Chinese weapons were carried back by the rebel groups through Burma, India started cultivating the Kachins to deny the north-eastern rebels the corridor to reach China. Between 1988 and 1994, the KIA developed close ties with the Indian RAW.
By the mid-1980s, however, as China stopped backing these rebel groups and Pakistan was too far away for direct help, the rebels of Northeast India turned to black markets of southeast Asia for weapons. The long conflict in Indo-China created a thriving arms bazaar that the LTTE was the first to access through the ‘Karikal Muslims’ (who hailed from the Tamil-speaking French dependency of that name and had settled down in Indo -China during French rule). Subsequently the rebel groups from the Northeast gained access to this black-market through different sources. Most of the weapons were received in Thailand, loaded in ships and brought to the coast of Bangladesh, from where they would find their way into Northeast India through land routes, with guerrillas doubling as porters.
The NSCN, the ULFA, the Bodo and the Manipuri rebels as well as the Tripuri guerrillas have all brought in huge quantity of arms through this route. But the Indian Army’s Operation Golden Bird in April-May 1995 and a mysterious explosion in a weapons carrying ship next year, exposed the risks involved in bringing huge quantities of weapons over such a long route. By the end of the 1990s, the rebels of the Northeast had turned to the Yunnan mafia. In an attempt to turn the state-run ordinance factories into profit centres, Chinese state-run Norinco started selling huge quantities of weapons to even mafia groups based in Yunnan – groups such as the Blackhouse. By 1999-2000, these mafia groups had become the prime source of weapons for the Northeast Indian rebel groups like the ULFA. A top leader of ULFA, now surrendered, told this writer that the weapons from Yunnan are at least 50% cheaper than those in Thailand.
In November 2001, the Burmese army raided five Manipuri rebel camps in and around Tamu and recovered 1600 pieces of weapons including mortars and rocket launchers. Investigations have revealed these weapons have been purchased from the Yunnan mafia.
Even after losing close to a thousand pieces of weapons in Bhutan, the ULFA military wing chief Paresh Barua told this writer that ‘weapons were no cause of worry, loss of men was.’ Indian intelligence reports suggest that the ULFA has become the major conduit for these weapons for a whole host of rebel groups from the Nepal Maoists to the Peoples War in the Indian mainland. The ULFA has ‘been frying fish in its own oil’ – buying weapons from the Yunnan mafia and selling it to the Nepali and the Indian Maoists or the Islamic jihadis in Bangladesh at double the price, good enough to pay for their own acquisitions.
From Bogra in Bangladesh to Calcutta in West Bengal to Chittagong in April 2004, huge quantities of weapons meant for the ULFA or for forwarding to its many clients have been seized. The quantities varied from a few truckloads in Bogra in western Bangladesh to a whole shipload good enough to arm a whole army division in Chittagong. A regional expert, however, asserts that the huge quantities of weapons seized at Chittagong port on 2 April 2004, had originated in Hong Kong, ‘which was shipped to Singapore where more weapons were added.’
The easy availability of cheap weapons from China, either transported through the land route by the Yunnan mafia through Burmese territory, or brought by sea on trawlers through the Bay of Bengal, will remain a major source of worry for Delhi. These are routes it will have to block to control insurgency and militancy in the country’s Northeast and in neighbouring countries like Nepal and Bangladesh. The latest disclosures by NSCN’s chief of procurement Anthony alias Nikkhang Shimray and Thai gunrunner Willy points to a $ 1.2 million deal to land a huge consignment of Chinese weapons that would have been loaded on a ship at Beihei in South China sea and unloaded near abeach in Bangladesh’s Cox’s Bazar in 2010 to be brought into Northeast. The NIA has already secured concrete evidence of the money trail for the deal.
Ever since the Chinese stopped official help to the insurgents of Northeast India, these rebel groups have remained in a position to access and buy huge quantities of weapons at very affordable prices. That would mean they can raise more recruits and arm them. Indian military officials say unless this new weapons route is blocked (a) the northeast Indian rebel groups will have much more arms to fight with; ( b) they will have much more money raised through weapons trafficking to other groups; and (c) they will have close fraternal ties with these groups and have access to their support networks in the subcontinent and abroad that may have a direct bearing on their potential to make trouble.
India will have to engage China on this whole issue of small arms proliferation in South Asia. But until such time the Chinese are willing to restrain a very profit-making weapons industry for the sake of regional peace and stability, India will have put huge pressure on the Burmese military junta to stop the thriving Yunnan-Upper Burma-Northeast India weapons route.
India is now seeking to use the Northeast as a land bridge to Southeast Asia, which is where Myanmar figures in a big way. Since the early 1990s, India has been seeking to situate the country’s troubled Northeast at the heart of what eventually evolved into its so-called ‘Look East’ policy. This has led to a reorientation of Indian policy and many analysts have revised their attitudes on the country’s long troubled Northeast. Some would say that the Look East policy centred on the Northeast is not strictly true as the decision to reorient India’s foreign policy towards its eastern borders came first, and the strategic location of the Northeast, useful for the implementation of this new direction, came as a necessary corollary. The Northeast has historically been considered a means to an end- the successful implementation of the LEP- and herein lies the problem. One analyst says that the many problems identified with the Northeast in the context of the LEP are symptomatic of the unequal focus on forward as well as backward integration and connectivity, which implies that internal developments must be concomitant to external developments.
Viewing the Northeast as a “land bridge” has also led to the fear that development will pass through without doing much good to the region itself. The author takes note of the multiple insurgencies that have held up development in the past and continue to do so (to a lesser degree, although this is not mentioned), that have also eaten into “vital resources” that could have been more gainfully used. However, he does not take note of the problem of funds not reaching their recipients due to the ubiquitous corruption in the seven states. Another issue – that of inter-state politicking – based primarily on the notion of Assam’s primacy due to which the other Northeastern states are not granted equal focus, is also not discussed.
I have strongly advocated opening of the defunct Stilwell Route, on which the debate is split. To illustrate the opposition to the Stilwell route, I have talked about in various forums about the “strange security mindset” of Indian military officials who think that this could allow China great advantages in the event of a conventional war with India. Trade officials say the Stilwell road could be used by China to dump its goods on Northeast India and through it to the rest of the country.” The reality is that Chinese goods have already infiltrated the Indian market through the large volume of informal trade that takes place at the border. In this paper therefore, while concessions are made for a wide range of problems in seeking to situate the Northeast in the LEP, the ‘what’ has been accorded much more focus than the ‘why’.
I am a strong advocate of developing regional cooperation that would link South to South East Asia through India’s Northeast. But I am clear on one point– if China is not included in the matrix and we only have south-east Asia in mind when talking of using Northeast as a land bridge, this LOOK EAST policy won’t work. No Indian or foreign manufacturer would relocate to Northeast if not promised the western and south-western China markets — promise of a market in Laos or Myanmar is not good enough.
So one would have to treat the Northeast as a land bridge for India to both south-east Asia and China and Myanmar as an area of Asian cooperation rather than competition.
In that case, one would expect rising Indian presence in Myanmar and its economy, especially after all the glib talk of a “Great Game” on Myanmar involving China, Western powers and India. But does India have the minimum economic footprint in Myanmar to play a Great Game? Total foreign investment ( FDI) in Myanmar crossed $43 billion in August 2013, according to the Myanmar Investment Commission.
“Myanmar has foreign investment from 32 countries in four major sectors: energy, oil and gas, mining, and manufacturing,” said an official from the Myanmar Investment Commission. China is the biggest investor in Myanmar, followed by Thailand, Hong Kong, South Korea, Britain, Singapore, Malaysia, France, Vietnam and India.
India’s investment in Myanmar is now around $273.5 million. It is expected to soar to $2.6 billion over the next few years. Indian companies that have a presence in Myanmar include ONGC Videsh (OVL), Jubilant Oil and Gas and the Century Ply-Star Cement group.
Thailand is the largest importer from Myanmar. As much as 41% of Myanmar’s total exports went to Thailand last year, while 15% went to India and 14% to China. Myanmar imported mainly from China, as usual, in 2012. A total of 37% of Myanmar’s imports came from China, while 20% came from Thailand, but just 3% from India. Myanmar’s total trade volume in 2012 was $25.16 billion.
The trade deficit reached $5.76 billion because total exports stood at $9.69 billion and total imports were $15.46 billion. Myanmar enjoys a favourable trade balance with India, but of its total trade of over $18 billion, India accounted for only about 7.5% in 2011-12. Whenever one asks a foreign trade official for an explanation, one is bombarded with statistics. Like India’s bilateral trade with Myanmar has “expanded significantly” from $12.4 million in 1980-81 to $1,070.88 million in 2010-11.
But why should be looking at a progression over 20 years? Where was Sino-Indian trade 20 years ago? Now China is India’s biggest trade partner, and it all happened in a few years.
India’s exports stand at $334.4 million, while it imports goods worth over $1 billion from Myanmar. The main exports to Myanmar are pharmaceutical products, iron and steel, electrical machinery and equipment. India imports large amounts of vegetables, pulses and wood products from Myanmar.
The Indian IT industry and also the entertainment industry has not really looked at Myanmar as a market. From an investment point of view, healthcare and education beckon Indian players for large-scale investment with possibilities of great returns and that will also ensure an Indian presence with “winning hearts-and-minds” capabilities.
Even Indian media has possibilities of investments in an untapped market, where a new democracy has increased an appetite for news. The trouble is that India has generally looked at Myanmar for its hydrocarbons.
Seven Indian companies figure among the 59 shortlisted foreign companies for the second round of bidding, among them are the likes of ONGC-OVL, Jubilant and Cairn Energy.
But the real irony unfolds in this sector when OVL and Gail decide to invest $1.33 billion in the China-Myanmar gas pipeline and Punj Lloyd wins a construction contract for two parallel pipelines for oil and gas involving a Chinese investment of $475 million to build the 200-km Kyaukphyu-Kunming oil and gas pipeline.
India lost out on this pipeline because we could not offer Myanmar a route to bring their gas from the Shwe fields. Bangladesh under Khaleda Zia did not oblige by providing its territory for the proposed pipeline and it was considered too expensive and risky to route it through India’s northeast.
India has requested Myanmar to start fresh negotiations on the pipeline now that Delhi has a more friendly government in Dhaka. But we can’t guarantee that will be the case by the time negotiations start.
To conclude, I would emphasize that (a) to be able to play a meaningful role in Myanmar that is important to the success of our Look East policy, India must help Myanmar find solutions to its long drawn ethnic insurgencies– Indian support for Myanmar democracy and federalism is crucial for its success, top Burma watcher and my good friend Bertil Lintner has said. (b) find solution to its own ethnic imbroglio in Northeast– one can’t expect a major policy initiative like LEP work through an area if its myriad conflicts are not resolved (c) develop a sizeable economic footprint in Myanmar by encouraging Indian state and private capital a presence in that country– Indian crony capital have to get over its inhibitions of investing in Myanmar and not expect government hand-holding all the time (d) allow for much greater sub-regional cooperation between Northeastern states and neighbouring provinces of Myanmar — this is crucial to develop local stakes in a larger bilateral and multilateral partnership (e) avoid conflict and competition and cooperate with China on Myanmar — the way to do it is to get Myanmar to leverage China for what it is good at like infrastructure and leverage India for what it is good like services and skills development.