India-Myanmar: Trade, Investment and Finance

Presentation at Brainstorming Session on India-Myanmar Strategic Partnership, Organised by RIS, 4 February 2013

India Trade Figures(Values in US $ Millions)

(Source: Ministry of commerce, New Delhi)

Year 2009-10 2010-11 2011-12 2012-13(up to Sept)

India’s exports to Myanmar

207.97(6.17%)

320.62(54.17%)

545.38(70.1%)

197.09

India’s imports from Myanmar

1,289.80(38.84%)

1,017.67(-21.1%)

1,324.82(30.18%)

729.09

TOTAL TRADE

1,497.77(30.17%)

1,338.29(-10.65%)

1,870.20(39.75%)

Myanmar Trade Figures(MNPED, Myanmar) (US$ Million)

Year 2009-10 2010-11 2011-12 2012-13(up to Nov)

Myanmar exports to India

1013.14 871.59 1045.99

(20%)

(Apr-Nov – 726.12)

686.61

(Negative)

Myanmar imports from India

193.52 195.46 325.38

(66.46%)

(Apr-Nov – 190.57)

187.43

(Negative)

Total trade 1206.66 1067.05 1371.37 874.04

Exports of India to Myanmar

Exports to MyanmarSl. No Commodity 2008-09 2009-10 2010-11 2011-12 (9 mths)

1 Others 94.17 79.85 111.4 110.12

2 Meat & Edible Meat Offal - 1.91 71.59 13.31

3 Pharmaceuticals 49.92 55.98 61.29 76.09

4 Iron & Steel 63.93 43.66 40.21 26.29

5 Sugar & Sugar Confectionery

- 0.07 21.27 -

6 Electrical Machinery & Equipment

13.62 16.69 16.39 26.81

7 Chemicals & allied products - 9.81 12.27 5.4

8. Oil well & Mining Equipment - - - 75.88

Total Exports 221.64 207.97 334.42 333.9

Exports of Myanmar to IndiaImports from MyanmarSl.

No Commodity 2008-09 2009-10 2010-112011-12 (9 mths)

1 Pulses and beans 611.78 851.53 570.82 628.57

2 Wood & Articles of wood 311.01 404.95 419.16 388.71

3Products of Animal

Origin 2.93 6.22 12.32 0.56

4 Others 2.34 7.19 7.88 14.65

5 Raw Hides & Skin 2.05 4.55 3.41

6Coffee, Tea, mate &

spices 0.91 3.07 2.94

1.22

Total Imports 928.97 1289.8 1017.67 1037.12

Myanmar- India Border Trade (US $ Millions)

Year Myanmar Export

Myanmar Import

Total

2009-10 7.79 5.95 13.73

2010-11 8.30 4.50 12.80

2011-12 8.87 6.54 15.41

2012-13 NA NA

Recent large projects bagged by Indian Companies

(a) Punj Lloyd – US$ 475 million (Oil and gas pipeline)(b) L&T (Zawtika) – US$ 250 million (wellhead platforms

pipelines)(c) Jubilant Energy – PSC -I Block)(d) L&T (Yetagun) – US$ 112 million (Wellhead platform

& pipelines)(e) Nipha Exports – US$ 20 million (Multiple vegetable oil

processing complex)(f) Vihan Networks Ltd. – US$ 5 million (Mobile telecom)

Foreign Investment of permitted Enterprises As of (31.12.2012) (By country) (US $ in Million)

Sr.No

ParticularsPermitted Enterprises

No.Approved Amount

%

1 China 41 14167.943 34.15

2 Thailand 61 9568.093 23.06

3 Hong Kong 43 6374.36 15.36

4 Republic of Korea 74 2976.73 7.17

5 U.K* 54 2799.185 6.75

6 Singapore 78 1858.83 4.48

7 Malaysia 43 1031.285 2.49

8 France 2 469.000 1.13

9 Viet Nam 5 349.796 0.84

10 India 8 273.500 0.66

Trade Facilitational Measures

• Need for Air Connectivity now that there is a good bilateral air services agreement.

• Need for Sea Connectivity.

• Need for Concessional Financing and banking arrangements.

Air Connectivity (New flights to Myanmar since July 2012)

Korean Air (Yangon-Seoul-Yangon) Frequency: EverydayAll Nippon Airways (Yangon-Tokyo-Yangon)Frequency – Thrice in a weekSingapore Airlines (Yangon-Singapore-Yangon)Frequency – EverydayEVA Air (Yangon-Taipei-Yangon)Frequency – Thrice in a weekQatar Airlines (Yangon-Doha-Yangon)Frequency – EverydayChina Airlines (Yangon-Taipei-Yangon)Frequency – EverydayCandor Airlines ( Yangon-Frankfurt-Yangon)Frequency – Once in a week

Shipping Connectivity

1. Essential to have direct liner services with regular frequency.

2. While trade is growing, it is currently asymmetrical and somewhat seasonal .

3. SCI has done a feasibility study for Colombo-Chennai-Yangon-Colombo. After discussing with some companies involved in Shipping, Mission suggested Chennai-Colombo-Yangon-Chennai.

4. Subsidy may be essential at least for a period of one to two years.

Financing

1. More of our banks to be present in Myanmar including EXIM Bank.

2. While sanctions for US dollar denominated transactions still seem to be around, pending paperwork, some have indicated if these are routed through Myanmar private banks sanctions may not apply. Our banks will need to check.

3. Ministry of Commerce’s scheme of ‘Interest Equalization Support’ for EXIM Bank’s supplier or buyer credit for bringing down ‘coupon rate’ is welcome but greater elaboration of this new scheme will be useful.

Opportunities in Investment

1. On specific offer now:

• Tender for 18 oil and gas Onshore blocks

• Tender for Offshore blocks to be invited soon

• Telecom services

2. At a development stage

• Thilawa SEZ• Dawei SEZ• Kyaukphyu SEZ• Housing Construction• Hotel Zones in Yangon

and Mandalay

gggggggg

3. For proactive exploration by companies

(a) Virtually anything but priorities are labourintensive industries; production of construction material (cement plants for example); power plants; refineries; and SMEs.

(b) Take over existing companies owned by government – engineering, auto, rice mills, sugar mills, plywood, paper and pulp, paints.

Strategic Thinking

(a) Commission a feasibility study for Kyaukphyu.(b) Explore participation of our companies in Thilawa,

Dawei, SEZs.(c) Developing strategies for Sagaing Region where we are

undertaking road connectivity (and possibly rail connectivity) projects – Myingyan development where we are promoting an industrial training centre.

(d) Look for some specific sectors to play a larger role –Some engineering sectors, IT, dairy, agricultural processing, SMEs.

(e) Set right Moreh-Tamu border trade

Thank you