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India plans to establish direct air connectivity with Myanmar as the country has granted it fifth freedom rights that will allow flights originating or ending in the country to fly between two foreign destinations.
It is also examining the economic feasibility of direct shipping lines between the two countries as India’s engagement with Myanmar is expected to increase several fold.
“Yes, we have got fifth freedom rights, a major concession, as it means passengers can be flown from a third county to another as, for instance, from Myanmar to Bangkok or from Myanmar to Singapore and then to India. The Myanmar Government is encouraging airlines to use this,” Commerce & Industry Minister Anand Sharma told Business Line .
India’s Spice Jet has requested for operating rights in the Delhi-Dhaka-Yangon sector, but is yet to get the required clearance.
India expects its trade with Myanmar, which is much below potential, to multiply in the coming years with the recent spate of political and economic reforms in the country.
Myanmar’s military regime, which had been ruling the country since 1962, allowed elections in 2010, following which the country’s democratically elected Government took charge. This more or less ended the country’s economic isolation with most countries, including India, extending a hand of cooperation.
Myanmar’s popular pro-democracy leader Aung San Suu Kyi participated in the by-elections last year, winning 43 of the 45 seats, adding more legitimacy to the Government. Although Suu Kyi has expressed disappointment with the performance of the new Government so far, she has said she is hopeful that India would help the country improve infrastructure.
“Our economic link with the country is rapidly expanding and we need direct air links and shipping lines to ensure that infrastructure does not prove to be the crippling factor in relationships,” a Government official pointed out.
While in the case of direct air links, it is only a matter of time before an Indian company gets permission to fly, for direct shipping links India has to first ascertain if it is commercially viable. The Shipping Corporation of India Ltd. (SCI) has conducted a feasibility study to start a liner service between India and Myanmar with one in-chartered vessel. The study was carried out with a port rotation of Colombo-Chennai-Yangon-Colombo and a round voyage duration of 14 days.
However, as it has been estimated that there will be annual loss of approximately Rs 28 crore, the Ministry of Shipping has sought the comments of other Ministries and Departments.
“The Commerce Department has informed the Ministry of Shipping that direct container services to Myanmar from Indian ports would definitely boost trade. However, a decision about the funding option for the subsidy proposed by the SCI for starting direct container services may be taken by the Shipping Ministry as per the SCI’s feasibility report,” the official said.
A joint working group is also examining the feasibility of direct rail links and met in January this year. It is yet to give its suggestions.
India’s imports from Myanmar stood at $1.4 billion in 2012 while its exports to that country were just $542 million.
Apart from doubling trade, India hopes to increase its investments in the country several-fold over the next few years.
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