India Myanmar Free Trade Agreement: A Promising Step Towards Bilateral Trade
India and Myanmar, two Asian nations with a shared history, have recently signed a free trade agreement (FTA) aimed at boosting their bilateral trade. The agreement was signed in August 2020 and is expected to significantly enhance the economic ties between the two countries. In this article, we will discuss the key features of the India Myanmar Free Trade Agreement and its potential implications for the two countries.
India-Myanmar Trade Overview
India and Myanmar have a long-standing relationship, and the two countries share a land border of almost 1,600 kilometers. Despite the geographical proximity and historical ties, the bilateral trade between the two countries has remained relatively low. In 2019-20, the total trade between India and Myanmar was valued at $1.4 billion, with India’s exports accounting for $1.18 billion and imports from Myanmar valued at $220 million.
Key Features of the India Myanmar Free Trade Agreement
The India Myanmar FTA is expected to provide a significant boost to bilateral trade. Here are some of its key features:
– Reduced Tariffs
One of the primary objectives of the FTA is to reduce tariffs on various goods traded between the two countries. As per the agreement, India and Myanmar will eliminate or reduce customs duties on 86% of the traded goods in a phased manner. This will help boost exports from both countries, making their products more competitive in each other`s markets.
– Trade in Services
The FTA also includes provisions for the liberalization of trade in services between India and Myanmar. The two countries have agreed to improve market access and provide national treatment to each other`s service providers. This will promote greater collaboration in sectors such as healthcare, education, and tourism.
– Investment Promotion
The FTA aims to promote greater investment flows between India and Myanmar by providing a predictable and transparent investment regime. The agreement includes provisions for the protection and promotion of investments, as well as the resolution of investment disputes.
Implications of the India Myanmar Free Trade Agreement
The India Myanmar FTA is expected to have several positive implications for both countries. Here are some of them:
– Increased Bilateral Trade
The reduction in tariffs and the liberalization of trade in services are expected to significantly increase bilateral trade between India and Myanmar. This will benefit both countries, as it will open up new markets and increase competition, leading to better quality products and lower prices for consumers.
– Greater Investment Flows
The FTA is expected to promote greater investment flows between the two countries. India is Myanmar`s fifth-largest investor, with investments of over $1.2 billion in several sectors such as oil and gas, power, and manufacturing. With the FTA in place, we can expect more Indian companies to invest in Myanmar, leading to greater job creation and economic growth.
– Improved Connectivity
The FTA is also expected to improve connectivity between India and Myanmar. The two countries have agreed to collaborate on several infrastructure projects, including the Kaladan Multi-Modal Transit Transport Project and the India-Myanmar-Thailand Trilateral Highway. These projects will improve connectivity between the two countries and facilitate trade and commerce.
Conclusion
The India Myanmar Free Trade Agreement is a promising step towards greater economic integration between India and Myanmar. By reducing tariffs, promoting trade in services, and facilitating investment flows, the FTA will significantly enhance bilateral trade between the two countries. It is expected to open up new markets, promote competition, and improve connectivity, leading to greater job creation and economic growth. With the FTA in place, the two countries can work towards strengthening their historic ties and building a more prosperous future together.