Myanmar seeks to expand investment, trade ties with India, Energy News, ET EnergyWorld

Myanmar is seeking to expand its trade and investment ties with neighbouring India and exploring the possibility of export of rare earth minerals as part of efforts to reduce its overdependence on China.

India has become the fourth largest trading partner of Myanmar. In recent months, both sides have seen visits by each other’s business missions.

A delegation led by the deputy director general, Geological Survey of India, visited Myanmar in December 2024 and held a bilateral meeting with the natural resources and environment conservation ministry to explore potential collaboration in the rare earth and critical mining sector, said people familiar with the matter.

Myanmar is rich in rare earth minerals, particularly those required for electric vehicles. Currently, China has the highest share of Myanmar’s rare earth exports.

India is presently the eleventh largest investor in Myanmar with an approved investment of $782.821 million by 39 Indian enterprises, according to people in the know. The Myanmar government has shown interest in collaborating in pharmaceuticals, textiles, chemicals, spices, agricultural machinery, renewable energy, solar, food processing and fast-moving consumer goods.

Bilateral trade has increased steadily, increasing 23% year-on-year to $1.50 billion in April-November 2024, with India’s exports of about $396.51 million and imports from Myanmar of around $1,113.71.91 million.

Pharmaceuticals, in particular, are a significant export and India has captured 60% of Myanmar’s market, according to the people cited earlier. Indian made medicines are widely used in Myanmar owing to their affordability and quality. On the other hand, Myanmar exports pulses, wood products and agricultural goods to India. Pulses such as lentils and beans are major imports for India, as they help meet the domestic demand for food staples, said one of the persons.

India and Myanmar operationalised the Rupee Kyat Trade Settlement Mechanism from January 25, 2024, in order to boost bilateral trade, ensure smooth flow of goods and enhance the use of local currencies.

Under this mechanism bilateral trade is done in Indian rupees. Punjab National Bank is the nodal agency from the Indian side. Nine of Myanmar’s banks have established a special rupee vostro account mechanism for settlement of transactions. So far, 14 transactions have been made under this mechanism, amounting to about Rs 7 crore, said people privy to the details.

To review entire bilateral trade and commercial engagement, the eighth joint trade committee meeting was organised in Delhi on September 25-29, 2024. Trade related issues such as tariffs, non-tariff barriers, custom procedures and new areas of engagement in the field services, energy, agro-products and pharmaceuticals were discussed during the meeting, said the people.

Discussions are also underway to finalise the Coastal Shipping Agreement, which is expected to be signed soon. Further, to explore more cooperation between the two countries in the field of steel, pharma and textile industries, the Indian embassy in Myanmar facilitated a study tour of a six-member delegation led by Charlie Than, Myanmar’s minister for industry. U Minn Minn, deputy minister, ministry of commerce, visited Delhi in August 2024 and participated in the BIMSTEC business summit.

Last month, the Indian embassy in Yangon, in association with the India-Myanmar Chamber of Commerce, organised the India-Myanmar Business Conclave 2025. The event brought together policy makers, businesses and other stakeholders, fostering closer economic and trade ties between the two countries.

To promote active business dialogue between India and Myanmar, Myanmar’s Union minister for investment and foreign economic relations Kan Zaw participated in the Global Business Summit organised by the ET in Delhi last week. Separately, on February 13-14, an eight-member delegation led by deputy minister U Minn Minn held a meeting with the minister of state for commerce and industry Jitin Prasada and minister of state for consumer affairs and food and public distribution BL Verma.

• Published On Feb 22, 2025 at 07:28 AM IST

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