August 30, 2016 12:27 am JST

India to complete Myanmar, Thailand highway by 2020

KIRAN SHARMA, Nikkei staff writer

Indian Prime Minister Narendra Modi, right, received President Htin Kyaw of Myanmar in New Delhi on Monday. © Press Information Bureau

NEW DELHI -- An ambitious three-nation highway that will connect India with Thailand through Myanmar is a central plank of Prime Minister Narendra Modi's Act East policy, which seeks to boost trade and connectivity with Southeast Asia.

The 3,200km project conceived in 2002 came up for discussion when Modi received visiting Myanmar President Htin Kyaw on Monday.

Modi said "we are deeply honored" that Myanmar's president chose India for his "first bilateral state visit abroad" since being appointed in March after Aung San Suu Kyi's National League for Democracy won a landslide general election following decades of military rule.

After the leaders met, the two countries signed agreements on bridge construction, road upgrades, renewable energy, and traditional medicine.

"Myanmar is special for us," said Modi. "It holds a unique position in India's neighborhood -- it is a land bridge that connects India with Southeast Asia."

Most of India's trade with the 10-member Association of Southeast Asian Nations (ASEAN) is seaborne. India and ASEAN signed a trade agreement for goods in 2009, and pacts on services and investment came into effect last year.

India-ASEAN trade saw average annual growth of 22% in the decade up to March 2012, but stagnated thereafter. In the financial year ending in March 2015, it was worth nearly $77 billion.

Indian officials are also interested in the onward access the India-Myanmar-Thailand highway will provide to Cambodia, Laos, and Vietnam. Initially, it will connect Moreh in the northeastern Indian state of Manipur to Mae Sot on the Thailand-Myanmar border.

Although the three countries agreed in 2012 to have the highway completed by this year, it is unlikely to be completed soon. According to a senior Indian official, Sripriya Ranganathan, India is upgrading or building 69 bridges along the highway, and being impeded by "a particularly bad stretch of road", but these public works are "now on track".

"My understanding is that the entire project will be complete by 2020," she said ahead of the Myanmar president's visit. "That is a fairly clear commitment that we now have." Ranganathan described Myanmar as a "very, very important neighbor" with which India shares a 1,600km border.

"We hope to take the commercial aspect of our relationship to a completely new level," she said, noting that sanctions imposed on Myanmar by the U.S. and others are being lifted. "We see this as a time for a lot of change."

Suu Kyi, Myanmar's state counselor and foreign minister, visited China for her first official visit outside ASEAN. This raised some concern in India since China has been seeking to increase its influence in Myanmar with a number of infrastructure projects.

Suu Kyi has confirmed she will attend an outreach BRICS (Brazil, Russia, India, China and South Africa) summit in the western Indian state of Goa in October. This will involve all countries in BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation): Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.

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