India and the BCIM: Should the ā€˜Iā€™ stand up?

31 May, 2013    ·   3966

Asma Masood delves into possible strategies via which India can reap benefits from its association with the organisation

Asma Masood
Asma Masood
Research Intern

In his May 2013 visit to India, Li Keqiang highlighted the progress made in the BCIM Regional Forum. It was the first high level government endorsement for the organization. Manmohan Singh reiterated the possibility of setting up infrastructure linking Northeast India with BCIM members and Southeast Asia. A Joint Study Group will be floated on strengthening connectivity alongside consultations on developing a BCIM Economic Corridor.

The progress mentioned indicates the BCIM Business Council, formed by prime chambers of commerce from member-states in 2012. BCIM-BC set the tone for Track I cooperation, signaling a shift from the  preceding futile Track II dialogues. Economics being a powerful language, the commerce groups’ lobbying may have influenced the foreign policy initiative towards the region.
Should India continue to pursue the BCIM path? By what approach can India reap maximum benefits from the organization? 

The Significance of the BCIM Region for India
 The BCIM region entwines 9 percent of the world’s area, 40 percent of the population and 7.3 percent of the global GDP.  India is offered a wide market, presently mired in high tariff/non tariff barriers.

The focus of the BCIM trade corridor is on issues of real urgent interest to India, including energy security, as seen in increasing engagement with Myanmar.  Seven public and private Indian companies are prospective bidders for Myanmar’s hydrocarbons. The competition is against fifty two bidders, of which only one is Chinese.

India’s national interests will leverage Northeast India when shaping links with neighboring states. Enormous opportunities are possible for the sub-region that is demanding a greater role under BCIM. India has already sanctioned a $500 million loan to Myanmar for the Guwahati- based Trilateral Highway linking the two countries to Thailand by 2016. The Kaladan multi-modal project is also being given due importance. 

The region is a crucial gateway to Southeast Asia. Delhi can continue to harness the geostrategic location of Myanmar.  Bangladesh is a promising shipping hub for India’s spoils in oil. Commitment with smaller, indispensable neighbours and a future world economic leader lend to regional stability and order.

A Strategy for India
The observed dynamics determine that India should pursue the BCIM path and encourage the BCIM Business Community to the fullest extent. Trade barriers remain the biggest challenge.  One method is focusing on regionally asymmetrically arranged sectors. Kolkata is a hub for IT, communication and services- areas relatively benign in Bangladesh, Myanmar and Yunnan. These are small steps before the apex of free trade can be discussed let alone negotiated.

India’s Sinophobia has prevented a proactive stance in BCIM. A habit of hesitation is apparent even in organizations like BIMSTEC and Ganga-Mekong Cooperation where China’s absence does not see members driven by an Indian engine of growth. Beijing may have recognized that India wishes to be constantly assured before engagements. If the mountain does not go to Mohammed, then Mohammed will go to the mountain. An economic olive branch has been offered, perhaps after a deliberate test of nerves on the border. This may serve as a blessing in disguise for India’s role in the BCIM region. Delhi must propel the country into the role of a proactive regional power.

India did not waver when China used Myanmar territory for solving the Malacca dilemma and accessing an alternate oil transit route, which can also increase its access to the IOR. ONGC and GAIL are to pick up a small but sizable stake of a China-Myanmar oil pipeline. This shows a pragmatic Indian policy set to expand via the Forum’s scheme on joint energy exploration.

Indian companies opting for onshore, not offshore Myanmar oil blocs could be due to transportation limitations that impeded previous extraction attempts. Combining multimodal transport and energy transit is no longer an option, or India misses an opportunity for 100 percent FDI in water blocs as allowed by Naypyidaw. Aviation and port developers accompanying Li Keqiang are parallel to CII’s invitation for Chinese investment in infrastructure. Long term gains depend on improving international infrastructure standards and reducing reliance on Beijing.

Almost all roads to BCIM lead from Northeast India (NEI). Political balancing is a delicate act. NEI does not wish to be bracketed as a mere transit corridor. CII’s participation should expand from the eastern chamber to include the northeastern concern. Sister cities and provinces are to be identified in India and China for increasing cooperation. To prevent paying only lip-service, Guwahati should be given as much importance as Kolkata.

Existing non-traditional security concerns can proliferate via BCIM corridors. Combined efforts of all parties aided by ICT will lessen the surveillance burden on Indian intelligence and border forces. India may capitalize on the soft power enjoyed in Myanmar and Bangladesh, an area where China falters, as seen with relations with Aung San Suu Kyi and local ethnics. India’s proactive role should not threaten its BCIM partners’ interests. Beijing’s Myanmar mistakes are best avoided. While Yunnan is seen as a necessary associate, Delhi may be the desired strategic partner. If a benign policy could harness the observed favourable reputation, then India can cover greater strides by abandoning passive- reactive strategies.