India is expected to affirm its commitment to ties with Myanmar during Prime Minister Narendra Modi's visit on September 6 and 7, but slow implementation of projects could pave the way for greater Chinese influence in the region. “Officials are trying to get things in place because of the Prime Minister's visit, but it's a difficult situation,” says Ashok Murarka, vice president, Indo-Myanmar Chamber of Commerce and Industries. China, he adds, has been implementing projects more efficiently than India.
Being the gateway to Southeast Asia, Myanmar is key to India's strategic interests, but China has been wielding a strong influence since the 1990s, when it supplied arms and ammunition to the military and rebel groups. Of late, China has been investing heavily in building infrastructure projects there. “Any delay in the execution of projects is an opportunity lost for India," says Murarka. "It will benefit China, as it has a strong relationship with the Myanmar government and local groups.”
One of the pending ventures is the Kaladan Multimodal Transit Transport Project to connect the seaport in Kolkata to Mizoram via sea and river routes in Myanmar. Initially targeted for 2013, the deadline was extended to 2015 and then to 2019. “The project has faced several hurdles,” is all that a member of a chamber of commerce that works closely with Myanmar will say, on the condition that neither he nor his organisation is named. However, other organisations associated with the project said that labour unrest, funding problems, and the monsoon have been holding back progress. The project cost also had to be revised from nearly Rs 600 crore to nearly Rs 3,000 crore.
Similarly, the India-Myanmar-Thailand highway project, scheduled to be completed in the last decade, was rescheduled for 2015, but has now been pushed to 2020 because of procedural and funding issues.
Yet another project that has not made much progress is the India-Myanmar Advanced Center for Agriculture Research and Education in Yezin, for which India was supposed to provide equipment and technical support.
"EXIM Bank officials claim that their role is that of a trustee and they cannot disburse funds on their own," says Murarka. "If you speak to the Indian government officials, they simply pass the buck.” Out of the $500 million (Rs 3,158.5 crore) credit extended to Myanmar, $200 to $250 million has been utilised, he added. The Ministry of Commerce and Industry did not respond to requests for inputs.
Burma's political dynamics is also a key factor, says Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations. “Even though the political reins have changed hands, the military still has a strong influence in the country, which has resulted in delays.”
India’s trade with Myanmar was pegged at $2.18 billion in FY17, registering an annual growth of 6%. Several companies such as Tata Motors, Escorts, Sonalika Tractors, and Zydus Cadila have operations in Myanmar. India also wants to increase its role in sectors such as agriculture, automobile, pharmaceuticals, oil and gas, and manufacturing. However, it lost out to China in sourcing gas from Myanmar because it could not figure out ways to transport it. Around 80% of this gas is now going to China.