 "Government pushes for trade pact among Bimstec nations")
The government is looking to engage more with Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) nations and has started pushing for a trade pact.
The Bimstec grouping, which comprises seven nations lying in the adjacent areas of the Bay of Bengal — India, Bangladesh, Bhutan, Nepal, Myanmar, Sri Lanka and Thailand — is set to become a focus area for India thanks to the trade, economic opportunities.
However, the grouping has not progressed much in terms of economic cooperation or physical connectivity since 1997. Since then, only three summits have been held with the latest one being held earlier this month when India hosted the Bimstec nations on the sidelines of the BRICS (Brazil, Russia, India, China and South Africa) summit in Goa.
Back then, Commerce and Industry Minister Nirmala Sitharaman had called for an early conclusion of a trade pact based on the ‘complementarities’ among the seven-nation grouping. However, that might be easier said than done as persistent differences over tariff rates and sectors covered under merchandise trade had been difficult to break through even after 20 rounds of negotiation having taken place over the past 20 years.
The region brings together 1.5 billion people or 21% of the world population and accounts for almost 3.7% of global trade and a combined gross domestic product (GDP) of over $2.5 trillion.
A framework agreement to establish a free trade area was signed in 2004 but it is yet to be operationalised. Talks on services trade are set to resume.
The Bimstec nations being also engaged under other groupings such as South Asian Free Trade Area, the Association of Southeast Asian Nations and the Regional Comprehensive Economic Partnership have also made talks slow.
Intra-regional trade is currently very low at 2.8% of the total trade conducted by the countries. This is also blamed on equally low connectivity among nations in the region owing to tough terrain, under-developed border areas and the issue of funding.
The most successful connectivity project so far involves the sub-group of Bangladesh, Bhutan, India and Nepal who signed a Motor Vehicles Agreement in 2015. It enables vehicles to enter any of the four nations without the need for trans-shipment of goods from one country’s truck to another’s at the border. Trial runs of trucks between Bangladesh and India have also begun.
However, other major projects such as the Kaladan Multimodal project which seeks to link India and Myanmar, or the Asian Trilateral Highway connecting India and Thailand, are yet to be finished.
The Kaladan project envisages connecting Kolkata to Sittwe port in Myanmar, and then Mizoram by river and road. India and Myanmar had signed a framework agreement in 2008 for the implementation of this project. It is yet to be finished. Myanmar is the only Southeast Asian country that shares a land boundary with India and will help it extend trade into the region.
This will be accompanied by the Asian Trilateral Highway that is set to run from Moreh in Manipur to Mae Sot in Thailand via Myanmar. Expected to be completed this year, the highway is one of the key projects that figures in a big way in the government’s Act East (earlier Look East) policy.
Experts said these and other projects would have seen further progress had India’s approach to the grouping not been slow till now. India is still to appoint a full-time director representing the country to the Bimstec secretariat in Dhaka, a senior Bimstec official told Business Standard. The secretariat itself was set up only in 2014, some 20 years after talks started, and it is still in the process of studying and creating feasibility reports on the various sectoral issues.
The seven members of Bimstec cover 14 priority sectors. Each country leads at least one area in a voluntary manner. India leads two – counterterrorism & transnational crimes, and telecommunication & transport. The other key sectors are trade and investment, technology, energy, tourism, fisheries, agriculture, cultural cooperation, environment and disaster management, public health, people-to-people contact, and poverty alleviation.
