There have long been Indian voices calling for strengthened agricultural cooperation among the countries of South and Southeast Asia in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), which was founded in 1997.

Trade and investment are major instruments to attain food security across the BIMSTEC member-states, particularly in a climate-affected, post-pandemic world. However, trade and market integration is an area where the performance of BIMSTEC countries has been subpar.

The share of all BIMSTEC countries — that include two ASEAN member-states, namely, Thailand and Myanmar — in world trade is less than 4 per cent. The BIMSTEC intra-regional trade was at $70 billion in 2021, significantly lower than ASEAN’s $600 billion, where exports were over $111 billion. Home to 1.8 billion people (22 per cent of global population, with a combined GDP of $3.6 trillion), the level of agri-food trade among BIMSTEC countries has been strikingly below potential.

Internal integration

BIMSTEC’s progress is hindered by a lack of internal integration; countries adjacent to the Bay of Bengal are less integrated today than they were 50 years ago. Further, the situation in BIMSTEC agri-food trade is getting more challenging due to competition with proliferating regional trading arrangements, such as the Regional Comprehensive Economic Partnership (RCEP), and bilateral arrangements like the India-Australia free trade agreement (India is a party to no less than 28 bilateral or regional arrangements while Thailand is part of 23 arrangements).

A better overview of changing agri-food market trends in the region, and how individual countries fit into these, is required. Like in manufacturing and services, there is greater value chain integration that transcends borders and specialisation occurs in components of the value chain. Value capture from agri-food trade requires countries to settle on a specific component of the value chain where they have a comparative advantage. Such specialisation is largely missing for most BIMSTEC member-states except possibly Thailand. BIMSTEC also needs institutional changes in order to enhance food safety and health attributes, which should be driven by mutual recognition and risk-based decision systems and standards that are recognised and are credible across member-states. In the absence of a formal free trade area agreement, BIMSTEC countries still do not have a shared system for product standardisation and testing. Lack of such arrangements significantly increases the time and costs of trade that disproportionally affect the agri-food sector.

To further enhance value chain integration, BIMSTEC countries need to liberalise both import and export restrictions.

Import competition brings productivity gains and delivers on quality and safety attributes. These effects can be clearly seen in India’s automobile sector. Why should the agri-food sector be different? Rapidly changing import and export policies among BIMSTEC countries create instability, greater uncertainty, and risk. For example, India’s unpredictable trading rules for pulses are a significant barrier for Myanmar, which produces pigeon peas almost solely for export to India.

BIMSTEC needs to be recalibrated and repurposed to have a greater focus on the agri-food trade. A complete overhaul of thinking about agri-food trade within the global value chain framework — that includes an openness on both sides (importing and exporting) and scaling up on attributes like quality, safety, and health as product differentiator — is an essential precondition for BIMSTEC to become an effective platform for successful cooperation among the Bay of Bengal countries.

Roy is Senior Research Fellow, Rashid is Director-South Asia and Pradhan is Research Coordinator at International Food Policy Research Institute