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India seeks stronger Myanmar ties as PM visits

In northwest Myanmar, where the Kaladan River flows out into the Bay of Bengal, the two giant arms of a half-built wharf enfold the estuarine mud with steel and concrete.

Their embrace is fraternal - Myanmar’s giant neighbour India is funding the new port in Sittwe, the capital of Rakhine State - but also strategic.

The port is part of a $214-million river and road network that will carve a trade route into India’s landlocked northeast and underscore New Delhi’s determination to capitalise on Myanmar’s growing importance at Asia’s crossroads.

Manmohan Singh will seek to bolster ties this week during the first visit by an Indian prime minister to Myanmar in 25 years. His official agenda includes road, rail, waterways and air links, says India’s foreign ministry.

Unofficially, he must also overcome a history of bad blood with Myanmar, where Indian investments are already dwarfed by regional rival China.

The visit follows a year of dramatic reforms in which Myanmar has pulled back from China’s powerful economic and political orbit a n d won a suspension of US and European sanctions.

President Thein Sein’s government has held peace talks with ethnic minority rebels, relaxed strict media censorship, allowed trade unions and protests and held a by-election dominated by Nobel Peace Prize laureate Aung San Suu Kyi’s opposition party.

As Myanmar emerges from decades of isolation, trade between the countries is already swelling. Myanmar’s government expects two-way trade with India to nearly double in two years to $2 billion, from $1.4 billion in the year to March 30, a figure that was nearly 30 percent higher from the previous year, according to Myanmar’s Ministry of Commerce.

India should be a natural partner, with ties stretching back to the ancient emperor Ashoka and, more recently, a shared experience of British colonialism and World War Two.

But its business interests in the former Burma have been “few and far between” since the mass expulsion of Indian merchants after the military seized power in 1962, says Thant Myint-U, author of “Where China Meets India: Burma and the New Crossroads of Asia”.

“Many in India remember all too well that this was the country that nationalised Indian businesses and expelled hundreds of thousands of ethnic Indians with literally nothing more than the shirts on their backs,” he said.

One hopeful symbol of improved ties is Sittwe.

The two countries formally agreed on the so-called Kaladan Multimodal Transit Transport Project in April 2008, just seven months after Myanmar’s military junta crushed nationwide pro-democracy protests led by Buddhist monks.

Work began on Sittwe port in September 2010, shortly before the former military junta held a rigged election that brought to power a quasi-civilian but surprisingly reformist government.

Indian conglomerate Essar Group is building the port on 70,000 square metres (753,000 sq ft) of landfill in Sittwe’s centre. It should be ready in two years, says Myanmar’s Commerce Ministry, accommodating ships from the Indian city of Kolkata, a 539-km (334 mile) voyage away across the Bay of Bengal, and handling up to 500,000 tonnes a year.

From Sittwe, ships will sail up the Kaladan River to the town of Paletwa, where Essar will build a second, smaller port. A 122-km (76-mile) highway will connect Paletwa to the Indian state of Mizoram. The two ports and dredge work will cost $74 million. The highway will cost $140 million.