The World Bank has approved a US$107 million credit to improve transport connectivity for the landlocked northeastern Indian state of Mizoram and to help open up the potential for regional trade among neighbouring countries, including Myanmar, the bank said on June 12.

The Mizoram State Roads II – Regional Transport Connectivity project, approved by the bank’s board of executive directors, will enhance Mizoram and other northeastern states’ road links with Bangladesh, Nepal, Bhutan as well as Myanmar, a bank said in a news release.

It said the link to Bangladesh will facilitate greater bilateral trade and access to the Port of Chittagong – the nearest shipping port for the northeastern region of India.

The link to the border with Myanmar will facilitate connectivity to Myanmar and the rest of East Asia and beyond. The impacts on trade and employment will be felt at two levels, intra-state and between Mizoram and Bangladesh and Myanmar.

Mizoram’s road network is of poor quality and under developed, and has among the lowest density in all of India, the release said.

Travel from Aizawl to the nearest Indian port of Kolkata via the congested, 11 kilometre-wide Siliguri corridor, also known as the “Chicken’s Neck,” is a 1,547 kilometre-long journey. Prices for basic staples like rice, sugar, tea and tomatoes can cost as much as three times more in Mizoram and other northeastern states compared with most Indian cities or neighbouring countries like Bangladesh.

The release said estimates showed that annual intra-regional trade in the region can more than double from $16 billion to $38 billion if barriers to trading with neighbors were removed.

“Being strategically located between Myanmar and Bangladesh, a better connected Mizoram can open up huge trade potential for the entire northeastern region of India with South and East Asian countries,” the World Bank’s country director in India, OnnoRuhl, was quoted as saying in the release.

“These countries will be able to export and import goods cheaper and faster. Consumers will also benefit from better pricing and choices,” MrRuhl said.

Roads that will be widened or strengthened includethe 27.5km Champhai-Zokhawtharroad on the border with Myanmar and the 41.7km Chhumkhum-Chawngte North-South alignment connecting to the border roads with Bangladesh to the west and Myanmar to the south.

The project will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm – which provides interest-free loans with 25 years to maturity and a grace period of five years, the release said.

[1] De 2013 : Intra-regional trade can more than double if constraints are removed (US$ 16 billion to US$ 38 billion annually) Zhai 2010: Investments in transport infrastructure to increase Pan-Asian connectivity could reduce trade costs by more than 20% in India, and12.5% in Bangladesh.