Press Information Bureau
Government of India
Ministry of Commerce & Industry
15-June-2016 18:20 IST
Border trade crucial for India’s ‘Act East’ policy says Commerce Secretary Rita Teaotia, as India focuses on Myanmar

‘Enhancing India-Myanmar Border Trade: Policy and Implementation Measures’, a Study brought out by the Ministry of Commerce and Industry, Government of India and Research and Information System for Developing Countries (RIS), provides a detailed analysis for enhancing trade through land borders between India and Myanmar. It also suggests not only policy measures to achieve this objectives but also outlines relevant implementation measures.

The Commerce Secretary Ms. Rita Teaotia, launched this study of the Ministry at an event organized by the Research and Information System for Developing Countries (RIS) in New Delhi on Wednesday, 15th June 2016 which aims at providing an impetus to India’s Act East policy as emphasized by Prime Minister Mr. Narendra Modi, by harnessing the potential of trade between India and Myanmar through borders. The welcome address was given by Dr Sachin Chaturvedi, Director-General, RIS.

In this context, Myanmar is uniquely placed – geographically, economically and strategically. India and Myanmar not only share national borders but also historical, cultural and civilizational linkages. It is thus no surprise that the two countries have traditionally shared important economic linkages and production spaces. Myanmar has the distinct potential to serve as a land-bridge between India and South-east Asian region, Commerce Secretary Ms. Rita Teaotia said.

Speaking on the occasion, Ms. Rita Teaotia highlighted that border trade between India and Myanmar through the land routes has seen a paradigm shift from Barter to Normal Trade and also abolishing the list of items restricted until recently. This effectively means that now India and Myanmar trade through the border can take place under the DFTP and AITGA. She also underscored the need for making trade an instrument for achieving developmental objectives in the border areas through employment generation. Investment in infrastructure on both sides was highlighted as an essential prerequisite for trade.

A distinguishing feature of India’s border trade with Myanmar and normal trade is that, in case of border trade both import and export growth exceed growth rates in overall bilateral trade, said Mr. Ravi Capoor, Joint Secretary in the Ministry of Commerce and Industry. He amplified on the role of integration with Myanmar for development of Myanmar and also accessing ASEAN and other markets which Myanmar has preferential access.

Mr Capoor also mentioned that this study is comprehensive, as it adopts an integrated approach towards border trade by focusing on trade in goods, trade in services, cross-border investment, trade facilitation, and infrastructure, at the India-Myanmar border region and since the study was conducted by combining desk-top research with field survey and stakeholders’ consultation, in a quest to make the analysis realistic and the recommendations practical. He further emphasized that it is time that we adopt a ‘fast-track’ approach to implement policy recommendations that could address the constraints acting upon border trade in particular and development of the region in general.

It is in this context that the Ministry’s study, which is prepared by Dr. Ram Upendra Das, an economist and professor at RIS, presented its analytical and empirical basis for enhancing India-Myanmar Border Trade. He argued that one of the reasons for less than optimum levels of economic activities in the region under consideration and the low quantum of border trade is absence of peace in the region along with other constraints. The study in a novel way argues towards a new framework of ‘peace-creating prosperity’ whereby focusing on employment generation in the region could unlock the potential that the region possesses. It is in this backdrop that the enabling conditions to augment border trade could well serve as a driver for greater economic activities in the region and at the border, making newer employment opportunities for the youth a real possibility, and preventing them from resorting to unfair means of livelihood.

One of the mechanisms to increase border trade are the Border Haats that play a facilitating role of enabling local trade and increasing people-to-people contacts and promoting the well-being of the people in areas of difficult access across the borders of two countries. This is done through establishing a traditional system of marketing the local produce at local markets at the border. After realising the requirements of communities residing near the border, the two countries took the decision to set up the Border Haats. Currently, the authorities have agreed upon 10 locations to be set up as Border Haats.

Overall, to increase border trade which can be conducted in an unfettered way as ‘normal trade’ actions focusing on laboratory testing at border, warehousing and storage facilities, certificate of origin related facilities, integrated check posts, border haats, trade promotion activities and most importantly improving banking facilities and bridging information gap need to be stepped-up along with focusing on security situation in the region.