A packed train leaves Myanmar’s Taungbyone station. The isolated country could enjoy easy connectivity to India. Until 1937, Britain ruled Myanmar as part of British India and some of the richest merchants in Myanmar were Indians. That was then. Now Myanmar is independent and isolated, and the rich Indian merchants are no more, although nearly a million people of Indian origin still live in Myanmar.

The economic relations between the Myanmar and India are now starting to improve again, but from a different base and for different reasons. The weak link in India’s “Look East” policy always has been the lack of physical infrastructure linking India with its South East Asian neighbours. Of all the South East Asian countries only Myanmar shares a land border with India, but unfortunately Myanmar is also one of the poorest countries in the region, and it suffers from appalling infrastructure.

But with economic and business relations between Myanmar and India improving and both countries engaging in the development of ports, roads and railways connecting the two countries, Myanmar may soon be able to resume its historical role as the “bridge” between India and South East Asia.

General Than Shwe, Myanmar’s head of state, recently made his second visit to India in six years. A number of trade and loan agreements were signed which, when developed in a few years, have the potential to dramatically increase the flow of trade and investment between the two countries, which now amount to about a US$1 billion (Dh3.67bn) a year.

Aung San Suu Kyi, perhaps the world’s most famous political prisoner, is still in custody in Myanmar and she has many supporters in India where she did part of her studies. But the Indian government policy now is to improve the state-to-state relations regardless of what the domestic political situation in Myanmar might be.

Elections are scheduled in Myanmar later this year and, depending on how fairly they are conducted, may well mark a turning point in its relations with the rest of the world. Right now the US and EU have imposed economic sanctions and this makes business and investment in Myanmar, especially in sectors such as gas and petroleum, difficult for foreign investors.

More than trade is at stake for India as it improves its relations with Myanmar. A look at the map of India will show that north-eastern states such as Assam and Mizoram are connected only by a thin strip of land to mainland India and suffer from poor connectivity to the rest of the country. In fact, the nearest ports are in Myanmar.

Isolated by the US and EU, Myanmar has developed good trade, political and investment relations with China. However, it is notoriously sensitive about retaining its sovereignty and independence and seems to be getting worried about being too reliant on China. That is another factor motivating Myanmar to develop better relations with its other giant neighbour – India.

Bangladesh, which sits between India and its north-eastern states, has until recently refused transit rights to Indian road and rail transport. But Bangladesh has also now agreed to transit rights with India. This, together with the opening up of Indian diplomatic relations with Myanmar, has the potential to transform the economic development of the poorer north east of India. India’s north-eastern states have fertile soils and receive good rainfall – in fact the place with the most rainfall in the world, Cherrapunji, is situated there – but have remained economically undeveloped because of lack of access to developed markets and even mainland India.

Myanmar is also reported to have one of the world’s biggest gas reserves, which are estimated to be more than 90 trillion cubic feet. Energy-hungry India is interested in that. The Indian government-owned Oil and Natural Gas Commission and the Gas Authority of India hold a 30 per cent stake in the exploration and production of gas in Myanmar’s offshore blocks, located in the Sittwe area of Arakan state.

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