BIMSTEC and BCIM Initiatives their Importance for India

BIMSTEC and BCIM Initiatives their Importance for IndiaBackgroundThe emergence of regional economical cooperation among neighbouring countries is becoming a dominant feature of institution economy. It means that globalization has been escorted by regionalisation inside different geographic regions of the being. It encouraged different countries and regions of the ball specifically the countries of to the south- tocopherol Asia and North- tocopherol Asia to create collaborative ties with India. It results the formation of some sub-regional throngings which involves India as a member coarse.In June 1997, a new sub-regional group called Bangladesh, India, Sri Lanka, Thailand economic Cooperation (BIST-EC) was established.The grouping expanded withthe addition of Myanmar in August 1997, and of Bhutan and Nepal in February 2004, after that it came to be known as Bay of Bengal Initiative for Multi-Sectoral practiced and frugal Cooperation (BIMSTEC). The aim behind the form ation of BIMSTEC was to create an enabling purlieu for rapid economic eruptment, accelerate social progress in the sub-region and confirm close and beneficial cooperation with existing international and regional organizations. BIMSTEC was initiated with the goal to shuffle the Look West policy of Thailand and ASEAN with the Look East policy of India and South Asia. Initiated in 1991, Indias Look East form _or_ system of government marked a shift in Indias foreign policy.This meeting intrust has identified 14 beas for strained cooperation where a member country takes lead India is the lead country for Transport and Communication, Tourism, Environment and Natural Disaster Management and Counter act of terrorism and Transnational Crime. Bangladesh is for Trade and enthronement. Myanmar is for Energy and Agriculture. Sri Lanka is for Technology. Thailand is for Fisheries, People to People contact and semipublic Health. Nepal is for Poverty Alleviation. Bhutan is for Culture. It is then evident that the BIMSTECs agenda for cooperation is quite elaborate and comprehensive.The Bangladesh, chinaware, India and Myanmar (BCIM) forum for regional cooperation, earlier known as the Kunming Initiative, is a Track II1initiative, which came into existence in 1999 and comprisesBangladesh, china, India and Myanmar. It advocates sub-regional cooperation on theme outgrowth, enhancing economic integration and people-to-people contact by the member countries. This sub-region comprises of Bangladesh, Myanmar, North eastern do master(prenominal)s of India and southern provinces of China.The BCIM is conceptualised on the basis of ingathering Zones, which involves cooperation in the midst of 3 or more member countries for the development of a geographically contiguous region comprising of a part or the firm of each of the participating nations. Growth zones facilitate pooling of resources, opportunity to blend cooperation in handle, investment, transport and comm unication in a planned way.Importance and alikely of BIMSTEC and BCIMIndia had closure ties and links with the BIMSTEC member countries, with the signing of BIMSTEC agreement India got an opportunity to upraise its past links with its old partners. In the speech at the s BIMSTEC Summit in New Delhi, the then Prime Minister of India stated that the 21st century be longsighteds to Asia and Asia exit be the engine of the world economic growth. BIMSTEC is an important part of the wider Asian community. It has the effectiveness of playing a decisive role in the Asian communityof nations linked by effective road, rail, line of work and shipping services across which in that location would be free presence of people, capital,ideas and goods2.BIMSTEC fosters socio-economic link between South Asia and Southeast Asia bringing together 1.3 one million million people accounting for 21 percent of the world population, and a unite GDP of US$750 billion3. BIMSTEC could be Indias gatewa y to forging an association with ASEAN through collaborations with Myanmar and Thailand. Additionally, it is an opportunity to create a grouping that excludes Pakistan and would withal raise to enhancing Indias focus on balancing its fires to protect its strategic position in the region. by a bilateral association with Myanmar, Indias North East region target be integrated into the overall growth and development schema. control board 1 manage of Indias Export to BIMSTEC (in %)BIMSTEC20062012Growth Rate (%)Bangladesh26.7431.875.13Sri Lanka33.7524.62-9.13Thailand21.6622.300.64Nepal14.8416.701.86Myanmar1.993.401.41Bhutan1.021.100.08Indias tradeationinging to BIMSTEC (US$ Billion)6.215.5Indias exportation to world (US$ Billion)121.2290BIMSTEC share in sum of money Indias export5.155.350.20 ancestor ITC Trade mapping (May 2014) Authors CalculationIndias export to world has enlarged by 2.4 times during the outcome 2006 to 2012. During the aforementioned geological period Indias export to BIMSTEC member countries has increased by 2.5 times. As revealed in Table 1, Indias export to BIMSTEC member countries has increased, excluding Sri Lanka. With respect to the size of the economy, intact export of India to BIMSTEC members is reckoned to be rather very(prenominal) low. Though Indias export to BIMSTEC countries has increased by 2.5 times but BIMSTEC percentage share in Indias export has not increased proportionately. During 2006 to 2012 it has increased marginally by 0.20 per cent.Table 2 Percentage share of BIMSTEC export in 2011BangladeshBhutanIndiaMyanmarNepalSri LankaThailandBIMSTECBangladesh..............Bhutan0.56500.06001India72.15911497.46909755Myanmar..............Nepal0.55190003Sri Lanka0.980800.0233Thailand25.75878862.451039Source ITC Trade Map (May 2014)Authors Calculation*(..) Country has not reported to ITC for this yearTable 2 shows the country-wise share of intra-BIMSTEC trade as a percentage of their tot trade in 2011. Among BIMSTE C member countries, Indias export to Nepal (97.46 per cent) is highest and to Myanmar is lo west (14 per cent) in 2011, as revealed in Table 2. Indias import from BIMTEC member countries is less(prenominal) than 10 per cent, except Thailand (78 per cent). A wider look at the bilateral trade share from the table reveals that India and Thailand are the main destinations of trade for other member countries. Even though the intra-BIMSTEC trade share of these ii countries are very low. This shows that large amount of trade potence is unexplored in this region.BCIM covers a total area of 13.7 million sq. km- accounting for 9 per cent of world area, total population of about 2635 million- accounting for 40 per cent of the world population, and a combined GDP of US$ 3485 billion- accounting for 7.3 per cent of the total GDP of the world4.BCIM is a good platform for a country like India to play a more active role in sub-regional grouping, thereby linking the twin objectives of developing In dias isolated and relatively backward uniting east region and consolidating Indias role as a signifi back tootht and goal-directed player in Asian regional initiatives.The BCIM initiative has the potential to unlock the vast opportunity for growth and development in the region.After the first inter-governmental meetingin Yunan (China), Bangladesh-China-India-Myanmar scotch Corridor (BCIM-EC) was put on fast track basis.Combining the advantages of the two largest emerging economies of India and China with the rich natural and human resources possessed by Bangladesh and Myanmar, this economic corridor (EC) get out enable the member countries to accelerate economic growth and commodiouser admission and connectivity with the global market. The BCIM-EC give excessively enable the member countries to foster nestled ties on issues of common lodge ins and develop strategies for regional development.This would lead to better fellow feeling and mutual trust, and raise stability, p rosperity and peace for the region. Once this EC is established, it will combine China-ASEAN clean-handed Trade Area5, ASEAN Free Trade Area and ASEAN-India Free Trade Area6. This would result in the creation of the largest FTA in the world and will also contribute to the free flow of goods, services and people thus serving as a gateway for greater cooperation between the Pacific and Indian Ocean.In position, BCIM-EC is designed to translate advantages ofgeographical proximity, political dealings and economic complementarity into strengths of concrete cooperation and sustained growth, with the aim of achieving mutual benefit and common development.Indias export to world has increased by 2.4 times during the period 2006 to 2012. During the aforementioned period Indias export to BCIM member countries has increased by 2.1 times. As revealed in Table 3, Indias export to BCIM member countries has increased, excluding China. Though Indias export to BCIM countries has increased by 2.1 times but BCIM percentage share in Indias export has decreased by 0.96 per cent.Table 3 Share of Indias Export to BCIM (in %)BCIM20062012Growth Rate (%)China81.3872.94-8.43Bangladesh17.3324.457.11Myanmar1.292.611.32Indias export to BCIM (US$ Billion)9.620.2Indias export to world (US$ Thousand)121.2290BCIM share in total Indias export7.946.97-0.96Source ITC Trade Map (May 2014)Authors CalculationIssues and Challenges of BIMSTEC and BCIMChina has shown interest in joining the BIMSTEC and some discussions have also interpreted place on merging the BCIM and BIMSTEC. If this happen, it would be a blow to India, as China is likely to dominate the regional sub-grouping and take away Indias central role. non nevertheless this, the objectives are at a variance, while BIMSTEC aims to create west to east connectivity, the BCIM is about forging North-South connectivity. This could create an atmosphere of geopolitical fight among the two countries.Though India has given a nod for BCIM-EC but it seemsunlikely that it would be realized in an early timeframe in either meaningful manner. The fact of the matter is, theBCIM-EC throws up a lot of security apprehensions for India which might thwart the progress of this initiative. These concerns are borne about insurgency in the North East India and their links with some Chinese elements and also Chinas claim on Arunachal Pradesh. And also the threat of Chinese economic exploitation in the North East India is the basis of Indias hesitation.Unless there is a positive change in the reputation of Sino-Indian relations except for hosting some Kolkata to Kunming car rallies and some other peripheral activities the substance in BCIM would remain absent. Substantive issues of BCIM would only receive worry when the geo-politics between twain nations move towards a positive resonance.There are some challenges faced by BCIM in the form of tariff and non-tariff barriers, pitiable trade facilitation measures, lack of custom harmonis ation, prevalence of informal tradeandinadequate infrastructure at and beyond the borders resulting in obstacles to cross-border movement of goods.These impediments hike up the cost of doing line of credit in the region, discourage trade-oriented investment and affect the competitiveness of entrepreneurs in the region. These bottlenecks get hold of to be addressed in order to increase intra-regional trade and also strengthen global integration of the region.Energy security is consistently tiny for economic development and growth. Energy security of a country is out beneficial related to its economic security. Ensuring skill security body a reject challenge for all the member countries of BIMSTEC. The grouping gives an opportunity to the member countries for common exploration of untapped energy resources, collaborative investment in energy firmament development and cross-border trade and movement in energy sector development within the region.Some member countries like Bang ladesh and Myanmar possess large drift reserves and some have untapped potential of hydropower such as Nepal and Bhutan. Whereas, members like India, Sri Lanka, and Thailand are major energy importers. Collaboration among them through pin development could result in better use of energy resources, benefiting both producer and consumer countries.Suggestions and RecommendationsIn order to boost exports to BIMSTEC and BCIM countries, India should try to identify potential product groups which can be pushed into export market, identify major markets which can absorb a countrys potential products, select the right manufacturing export units which can undertake the responsibility of entering the overseas markets, grant adequate rectifyd infrastructure to exporters, bring tariff rates in line with the international level in order to remove any bias against production for exports, allow exporters to borrow from the international markets if rates of interest are higher in the domestic m arkets, adopt strategic state intervention to promote exports aggressively and create necessary institutions and organizations which aid and promote exports, create special domestic financial facilities in term lend institutions for export related investment, check the domestic consumption of commodities which have great export potential so as to require surpluses available for exports and to bring on exporters cost and quality conscious.Tourism is another area of great potential through which the member countries could reap benefits through sub-regional cooperation. Tourism is one of the main focus areas of the BIMSTEC and for India it represents another opportunity to extract mileage for its LEP through cooperation with Myanmar to develop North-East Region (NER) as a tourist destination. NER of India is blessed with foreign flora and fauna, natural scenic beauty, unique performing arts and vary cuisine and handicrafts. Tourism in NER has an untapped business potential. Through the expanding upon of tourism within the region, the member countries would be able to collect more revenue and investment may therefore be increased.BIMSTEC countries by uprightness of their strong traditional expertise have overabundance of products which can financial statement high value in international markets if they adhere to quality standards. Among the member countriesThailand is the only country that has developed a sound marketing strategy for these products. This can be carried out in other member countries as well,like, India, Bangladesh, Sri Lanka etc. since all of them have a strong handicrafts sector.There is a scope to increase intra-BCIM trade by reducing tariff and non-tariff barriers, alter infrastructure, increasing investment flow and deepening of trade facilitation. Currently, the BCIM countries are utilising only 40 per cent of their trade potentials. This could increase manifold if necessary infrastructure is developed, ensuring more trade and investme nt flow in higher volume. Therefore, there is a need to create BCIM fund to remove infrastructure deficits and improve connectivity. There is also a need to introduce faster visa processing for higher intra-regional trade.The success of the BCIM initiative relies heavily on the participating countrys ability and willingness to develop a suitable and safe infrastructure connectivity to facilitate movement of goods and services.In the context of the current state of play, BCIM remains one of the least connected regions in the world.The BCIM members should focus onimproving the state of connectivity within the region, and mobilising therequired resources to build the necessary infrastructure. This must be seen in the context of a long term development strategy which will have greater outreach in enhancing the economic integration in the region.ConclusionIt can be concluded with the above discussion that the success of BIMSTEC and BCIM sub-regional groupings will surely contribute to improve the position of India in the current global era and peculiarly to the progress of North-east region of India as well as its LEP.Definitely these regional groupingswill help to India for making closer link with its proximate and immediate neighbours, to increase economic integration with Southeast Asia and Northeast Asia, to address security concerns of NER and the development of its untouched potential. Stronger bilateral relations between India- BIMSTEC and India-BCIM would be helpful to make Asia as more stable and prosperous region of the world. The proper capital punishment of these sub-regional groupings would also be helpful to control informal trade between their member countries.ReferencesBanik, N. (2007), The BIMSTEC FTA and Its Relevance, condense for Studies in International Relations and Development (CSIRD), interchange Paper (DP),36.Bhatia, R. K. (2013), BCIM Economic Corridor, New Delhi, IndiaHaokip, T., Indias Look East policy Prospects and Challenges for Northeast India.Hossain, S. M. (2013), Impacts of BIMSTEC Free Trade Area A CGE Analysis, journal of Economics and Sustainable Development Vol.4, No.13.Nag, B., De, D. (2007), Asian Integration Process and BIMSTEC, centralise for Studies in International Relations and Development (CSIRD) Discussion Paper (DP), 35.Policy brief, (2004), Future Directions of BIMST-EC Towards A Bay of Bengal Economic Community (BoBEC), 12 RIS, India.Rahman, M. (2014), BCIM Economic Corridor An emerging Opportunity, The Daily Star Pg 52, Col 1-B.Rahman, M. M. (2011), Trade and Investment Potential among BCIM Countries Prospects for a Dynamic Growth Quadrangle.Rahman, M., Rahman, H., W. B. Shadat (2007), BCIM Economic Cooperation Prospects and Challenges, Centre for Policy colloquy (CPD), Bangladesh.Rahman, T. M. M. A. Amin, (2009), Prospects of economic cooperation in the Bangladesh,China, India and Myanmar regionA quantitative assessment, ARTNet.Saxena, S., Bhadauriya, S. (2012), India and BIMSTEC An Analysis of Indias Trade Performance Prospects, Business psychoanalyst A Refereed Journal of Shri Ram College of Commerce,33(1), 103-114.Singh, L. S. (2010), Northeast India in BIMSTEC The Myanmarese Factor.Uberoi, P. The BCIM assemblage Retrospect and Prospect11Track-II initiatives are initiatives taken by the non-government section, whereas initiatives taken by the government section are known as Track-I Initiatives2Manmohan Singh,PMs go-ahead Remarks at the Second BIMSTEC Summit, Prime Ministers Office, Press culture Bureau, Government of India, 13 November 2008, available athttp//pib.nic.in/newsite/erelease.aspx?relid=447903RIS Policy Briefs 12, Future Directions of BIMST-EC Towards A Bay of Bengal Economic Community (BoBEC)4Rahman, M., Rahman, H., W. B. Shadat (2007), BCIM Economic Cooperation Prospects and Challenges, Centre for Policy Dialogue (CPD), Bangladesh.5The leaders of both China and ASEAN Member (AMS) signed the Framework conformity on China-ASEAN Comprehen sive Economic Cooperation at the sixth China-ASEAN Summit in November 2002. In November 2004, Chinese Premier Wen Jiabao and leaders of AMS witnessed the signing of the stipulation on Trade in Goods of the China-ASEAN FTA which entered into force in July 2005. In January 2007, the two parties signed the Agreement on Trade and Services, which entered into effect in July of the same(p) year. In August 2009, the two parties signed the Agreement on Investment. The brass section of China-ASEAN free trade area enhances the close economic and trade relations between the two parties, and also contributes to the economic development of Asia and the world at large. (http//fta.mofcom.gov.cn/topic/chinaasean.shtml)6 ASEAN and India signed the framework Agreement on Comprehensive Economic Cooperation at the 2nd ASEAN-India Summit in 2003. The Framework Agreement envisages the brass of an ASEAN-India Regional Trade and Investment Area (RTIA) as a long term objective.