Indian investors interested in Myanmar opportunities, but more govt support needed

Despite travel restrictions and other setbacks as a result of COVID-19, investors from India have shown a great interest in expanding into Myanmar and some have even proposed novel ideas on boosting business and trade between the two countries, said Sunil Seth, President of the India-Myanmar Chamber of Commerce (IMCC).

Since international flights to and from Myanmar were suspended in April, the IMCC has conducted several virtual trade fairs with the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICC) in India “demystifying and highlighting growth opportunities in Myanmar.”

That’s resulted in new business discussions and plans among members of all three chambers to invest in the country, Mr Seth said. He added that interest had already been growing at the start of the year, before the pandemic broke out. “In fact, we had started the first few Indigo flights from Calcutta to Yangon before COVID-19, and many Indian businesses, including women entrepreneurs, had already been exploring opportunities here,” he said.

The majority of Indian businesses are interested in growing beans and pulses in Upper Myanmar. “We are looking at replacing some of the products that Canada currently exports to India, particularly yellow peas and red lentils, which is part of the daily diet and widely consumed in India,” Mr Seth said.

Canada currently exports up to four million tonnes of yellow peas to India, but traders are exploring the opportunity to grow the crop in the upper parts of Myanmar, including Sagaing, Kachin, northern Shan State and even parts of Chin, where the climate is sufficiently cold and soil conditions are more suitable. “There will be some seed technology involved, which India is very good at,” Mr Seth said, adding that there is also domestic demand for yellow peas, which is rich in protein and vitamins.

He said the IMCC has been in talks with the India embassy in Myanmar and the local Beans and Pulses Association for the past two months to bring Indian seed scientists and local farmers together to explore possibilities of growing yellow peas in Myanmar. “We still need to discuss important issues such as contract farming arrangements and land availability as well as regional government support,” Mr Seth said, “but if successful, a pilot project could start within the next six months.”

Importantly, trade between Myanmar and India could potentially double if Myanmar is able to replace Canada as a main exporter of yellow peas. This would also come at a time when local farmers are struggling with quotas implemented on the existing beans and pulses trade. Last year, India imposed quotas of between 250,000 tonnes and 500,000 tonnes on the import of black matpe, green gram and pigeon peas from Myanmar in an attempt to protect Indian farmers. “What we are discussing now are new crops that will bring an additional revenue stream to Myanmar,” Mr Seth said.

The other big advantage for Myanmar is the potential to eliminate the need for transshipment via Singapore and Malaysia. With the volume of yellow peas exported, Myanmar can easily fulfill the base cargo load needed to book a single vessel and ship the crop directly to India, which will help to reduce transport time and costs hile expediting payments and trade. Currently, beans and pulses from Myanmar are shipped to hubs in Singapore or Port Klang in Malaysia before being rerouted to India.

More convincing needed

Up until now though, Indian investments in Myanmar have mainly been limited to the oil and gas sector. As of June this year, India had invested around US$668 million in the exploration and production of natural gas in Myanmar, according to the Directorate of Investment and Company Administration. These involved large companies such as ONGC Videsh, GAIL (India) and Reliance Industries.

Other smaller investors include the Adani Group, which is building a container terminal in Yangon, while companies like pharmaceutical product maker Zydus Cadilla and Bajaj Auto, which supplies three-wheeled tuktuks to second-tier cities, have established a credible presence in the country. Mr Seth urged the government to level the playing field for foreign investors to draw more businesses and capital from India. For example, even though Indian companies are well experienced in solar, he said none participated in a solar tender launched by the Myanmar government last month. “For one, we understand that the power purchase agreement is only for five years. Typically these projects need 25 years to be economically viable,” he said.

Moreover, while travel restrictions prevented many Indian firms from coming to Myanmar, investors from China were able to take advantage of fast lane agreements to enter the country. Mr Seth said arrangements like this have led to a lack of confidence doing business in Myanmar among Indian investors. “One of the concerns is the lack of clarity and transparency on how big projects will be carried out,” he said. For example, Indian investors watching developments unfold at the New Yangon City were disappointed when arrangements to proceed with a Chinese investor under a Swiss challenge did not materialise.

“Investors want to see how such projects pan out in terms of procedures and timeline. These should be executed and documented transparently to give investors the confidence they need to expand here,” said Mr Seth. He added that Indian companies are eyeing a number of construction and infrastructure projects under the Myanmar Project Bank, “but no-one knows how these projects, some amounting to hundreds of millions of dollars, will be carried out,” he said.
Finally, the government should get on calls and virtual conferences with existing investors in Myanmar to keep the momentum going. “Over the last few months, ministers in Nay Pyi Taw have not been meeting with us. Many large companies like ONGC and GAIL have committed to investing in Myanmar, while others are excited about the opportunities available in sectors ranging from construction to pharmaceuticals. The government should give them more reassurance and support,” he said.

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Source : Myanmar Times

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