Thanks to India’s new “Look East” policy aimed at expanding the country’s investment and influence to the east, and a 100-kilometer pot holed land bridge to Southeast Asia, trade between India and Myanmar—also known as Burma—is booming and the US government is interested.

Expanding from US $557 million to $1.2 billion between 2005 and 2010, India-Myanmar trade is behind China when it comes to Myanmar’s markets and mineral resources, which some economic analysts estimate as high as $4 billion.

Myanmar ships mainly agricultural goods and natural resources, while India exports chiefly machinery, industrial equipment, pharmaceuticals and consumer goods. The Myanmar market is filled, however, with Chinese-produced electronics, clothes, bags, and household utensils.

Besides interests in Myanmar as a link to markets and trade in Southeast Asia, India also wants to keep Chinese influence at bay. India’s rapidly expanding economy also needs more oil and gas from Myanmar.

India has plans to build a 1,200-megawatt hydroelectric power station and several other infrastructure projects inside Myanmar, including major road construction projects.

China signed an agreement in 2009 to build a pipeline through Myanmar to avoid the clogged and potentially volatile Strait of Malacca bottleneck for its fuel. Those projects are well underway.

India does not like the prospect of another major player in a maritime area that it considers its own lake. This concern provides another reason for India to counter China’s influence over Myanmar.

There are also signs that Myanmar is seeking to reduce its dependence on China. The Thein Sein government recently suspended a $3.6 billion Myitsone dam project that China was constructing in Kachin State. Should this become more than a one-time tiff, Myanmar maybe looking to New Delhi for partners.

In spite of the Myanmar’s military close ties with Beijing post-1988, many in the armed forces have not forgotten China’s role in nurturing and fueling the Burmese Communist Party’s armed insurgency. In addition, the public is deeply apprehensive of their giant neighbor to the north.

India rolled out the red carpet for Myanmar President Thein Sein when he arrived in New Delhi on a three-day state visit on October 14, adding to speculation that Myanmar aims to reduce its heavy dependence on China and make more room for India.

Indian Prime Minister Manmohan Singh welcomed Thein Sein’s “ongoing efforts at political, economic and social reform”.

Although a former general who came to power through a deeply flawed election, Thein Sein is reportedly a moderate keen on reform. Thein Sein’s government has granted amnesty to 200 political prisoners, ended restrictions on the Internet and lifted the ban on trade union activity.

In an attempt at building confidence, he has also appointed a former liaison officer to opposition leader Suu Kyi, as his minister of social welfare, relief and resettlement and her close friend, U Myint, as his chief economic adviser.

India signaled its strong support to Thein Sein’s reform efforts by announcing a US$500 million credit line to Myanmar – its largest ever – for specific projects, including irrigation. This comes in addition to $300 million of credit extended last year,

The Thein Sein government will also be looking to India to convince the United States and Europe to lift sanctions against Myanmar.

Progress towards such a venture was encouraged by a visit from US Secretary of State Hillary Clinton on December 1, who said the U.S. was “encouraged by the steps that you and your government have taken to provide for your people.”

The article was first published by BlogOfAsia. All rights reserved. Blog Of Asia © is a website providing various information related to the continent of Asia, such as: current news, culture, travel, business opportunities and living experiences.