News and Analysis • Volume 12 • Number 24 • 2nd July 2008

India, Myanmar Sign Four Economic Cooperation Agreements


India and Myanmar deepened their bilateral economic relations last week with the finalisation of four economic cooperation agreements. Along with an investment protection accord, India has agreed to provide Myanmar with US$ 84 million in loans and credits to expand the country’s power distribution network.

The Bilateral Investment Promotion Agreement (BIPA), the first of the four agreements, is intended to facilitate greater investment flow between the neighbouring nations by providing a framework for resolving disputes, extending national treatment, and repatriating investment and returns, among other things.

Under a separate agreement, India will finance three 230-kilovolt transmission lines in Myanmar. The deal, worth US$ 64 million, is to be executed by the Power
Grid Corporation of India Limited.

In a related credit line agreement, the Exim Bank of India and the Myanmar Foreign Trade Bank will contribute US$20 million towards the establishment of a manufacturing facility to help facilitate the expansion of Myanmar’s power distribution network.

Finally, the United Bank of India and the Myanmar Economic Bank signed an agreement aimed at facilitating the implementation of a border trade agreement between the two countries.

Relations between the two nations, which share a 1,330-kilometre border, soured in 1988 when a military junta took control of Myanmar, but the relationship has improved steadily since 2000. An example of their advancing economic ties was a US$ 120 million deal struck in April, in which India agreed to invest in waterways and highways along Myanmar’s Kaladan River and to develop the north-western port of Sittway.

Bilateral trade between India and Myanmar reached US$ 590 million in 2005-2006. Currently Myanmar is striving to develop its hydroelectric potential; India, China and Thailand have thus far proven to be the biggest foreign investors.

ICTSD reporting; “India, Myanmar sign agreements,” THE HINDU, 26 June 2008; “India, Myanmar sign investment promotion pact,” THE ASSOCIATED PRESS, 25 June 2008; “India to give Myanmar $84 million in loans, credit,” THE ASSOCIATED PRESS, 25 June 2008; “India, Myanmar ink four pacts, including BIPA,” THE ECONOMIC TIMES, 24 June 2008; “India, Myanmar to sign investment pact,” AGENCE FRANCE-PRESS 23 June 2008.