$500 million in hand, India pushes to rebuild old links with new Myanmar

India and Myanmar expect to double their trade in three years, and despite a delay in introducing a bus link, hope to be connected not just over land and by air but also by rail when agreements signed by the two sides during the visit here of Prime Minister Manmohan Singh bear fruit.

Described as a “landmark” in bilateral relations, Dr. Singh's three-day visit is aimed at building on the existing relations, and his talks with President Thein Sein of Myanmar on Monday reflected this purpose.

Through most of the last two decades, New Delhi built ties with the military junta in Myanmar. But more at ease about engaging with the country after the recent changes brought Aung San Suu Kyi, the country's democracy champion, on board the political process, India signed a slew of agreements and memoranda of understand (MoUs) on day 2 of Dr. Singh's visit, to take forward economic ties, co-operation in development and capacity-building in a range of sectors.

They include an MoU to operationalise a $500-million line of credit announced during President Thein Sein's visit to India in October 2011. In the new brisk atmosphere, Myanmar has already identified agriculture and irrigation as the areas on which the money will be spent.

According to a joint statement, the two leaders also agreed that Myanmar would encourage investment by Indian companies in its oil and gas sectors. One of the Indian companies represented in the business delegation, Jubilant Energy, has won a drilling contract for an onshore block.

Briefing journalists on the talks, Foreign Secretary Ranjan Mathai rejected the suggestion that fear of China was behind the Prime Minister's visit and India's involvement in Myanmar.

“I don't think our plan to visit Myanmar or the activities of the Indian business sector is based on anything but our own considerations, and the calendar is set by our requirements,” Mr. Mathai said. “Our discussions with Myanmar are between us, and I don't think any third party comes into that.”

The Indian side has apparently been assured that Indian companies will be considered when more blocks are auctioned. India is also interested in downstream petroleum projects.

A representative office of the Union Bank of India will open in Yangon towards the agreed goal of doubling the $1.2-billion bilateral trade. The Central Bank of Myanmar and the Reserve Bank of India are also expected to finalise currency agreements for ease of trade.

The two sides will also open border markets, or haats, to improve trade between communities on both sides in the regions of the Northeast that lie along the Myanmar border.

Myanmar has helped India deal with the Northeast insurgencies by cracking down on safe havens on its side. On Monday, both leaders reaffirmed their "shared commitment to fight the scourge of terrorism and insurgent activity in all its forms and manifestations" and "reiterated the assurance that territories of either country would not be allowed to be used for activities inimical to the other, including for training, sanctuary and other operations by terrorist and insurgent organisations and their operatives."

India also sees as important Myanmar's efforts to make peace with the ethnic rebel groups on its side of the border. During his interaction with the Myanmar president, who has surprised the world with an unexpected visionary and inclusive approach to national reconciliation, Dr. Singh praised these efforts as he did those between the government and democratic parties, including Ms. Suu Kyi's National League for Democracy.

One of the big themes of the talks between the two leaders was “connectivity,” towards not just at improving trade and increasing people-to- people contact, but also as an instrument to mainstream the insurgency-wracked regions in India's north-eastern States as well as on the Myanmar side.