Why BIMSTEC is Important for India?

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organization of seven nations of South Asia and South East Asia.

The BIMSTEC member states—Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal
Fourteen priority sectors of cooperation have been identified and several BIMSTEC centers have been established to focus on those sectors

BIMSTEC Free Trade Area Framework Agreement (BFTAFA) has been signed by all member nations to stimulate trade and investment in the parties, and attract outsiders to trade with and invest in BIMSTEC at a higher level. Subsequently, the “Trade Negotiating Committee” (TNC) was set up, with Thailand as the permanent chair, to negotiate in areas of trade in goods and services, investment, economic co-operation, trade facilitations and technical assistance for LDCs. Once negotiation on trade in goods is completed, the TNC would then proceed with negotiation on trade in services and investment.

BIMSTEC Coastal Shipping Agreement draft was discussed on 1 December 2017 at New Delhi, to facilitate coastal shipping within 20 nautical miles of the coastline in the region to boost trade between the member countries.

Compared to the deep sea shipping, coastal shipping requires smaller vessels with lesser draft and involve lower costs.
Once the agreement becomes operational after it is ratified, a lot of cargo movement between the member countries can be done through the cost effective, environment friendly and faster coastal shipping routes.

BIMSTEC Summits

1st summit (2004)               Host Nation: – Thailand (Bangkok)
2nd Summit (2008)             Host Nation: – India (New Delhi)
3rd Summit (2014)              Host Nation: – Myanmar (Nay Pyi Daw)
4th Summit (2018)              Host Nation: – Nepal (Kathmandu)
5th BIMSTEC Summit would be hosted by Sri Lanka at Colombo. Dates are yet to be announced

Why is it important for India?

Two major factors have driven India’s interests in the BIMSTEC forum.

1. Stagnation of the South Asian Association for Regional Cooperation (SAARC)

A key reason for India to reach out to its BIMSTEC neighbours has been the stagnation of the South Asian Association for Regional Cooperation (SAARC). This limited both the scope of India’s growing economic aspirations as well as the role it could play in improving regional governance.

Reasons of Stagnation at SAARC

At the 18th SAARC Summit in Kathmandu, in 2014, India proposed the SAARC Motor Vehicles Agreement. However, this could not progress due to resistance from Pakistan.

This compelled Bangladesh, Bhutan, India, and Nepal (BBIN) to sign the BBIN Motor Vehicles Agreement in 2015

Pakistan also opted out of the ambitious SAARC Satellite project proposed by India, leading to a change in its name to the South Asia Satellite
There is a tendency in some quarters to see India’s interests in BIMSTEC as part of its strategy to isolate Pakistan and position BIMSTEC as an alternative to SAARC

2. Ensure Stability in the south Asian Region

It is in the India’s interest to ensure that the region does not lag behind and that an unstable neighbourhood does not drag its growth. India’s desire to link South Asia to the economically dynamic Southeast Asia is also part of this strategy.
The rationale behind making the BIMSTEC mechanism work is to reassure South Asia that the region can work together to achieve common goals with India playing its due role.

Challenges for India at BIMSTEC

1. Issue of Budget:-

India is currently the largest contributor to the BIMSTEC secretariat’s budget. India’s annual contribution was Rs. 2 crore (or 32% of the total secretariat budget) for 2017-18. With the secretariat planning to strengthen its capacity by increasing human resources and the number of officials representing each member state, India may need to consider allocating more resources. India’s generosity would be a key test of its commitment to the sub-regional grouping.

2. Lack of confidence among smaller nations in longer run

There are chances for India to counter the impression that BIMSTEC is an India-dominated bloc, a problem that it faced for a long time in SAARC. Today, most of the smaller neighbours are more willing to engage so as to benefit from India’s economic rise. Nonetheless, for internal political reasons, the same issue may re-emerge and pose hurdles in the progress of BIMSTEC. To moderate such suspicions, India will need to show sensitivity to the concerns of smaller neighbours.

Outcomes of 4th BIMSTEC Summit

BIMSTEC Development fund:-  BIMSTEC Member states committed to Direct the relevant Ministries/national agencies of their respective governments to explore the possibility of establishing a BIMSTEC Development Fund (BDF), at an appropriate time, with voluntary contributions from the Member States, which will be utilized for research and planning of BIMSTEC and financing of projects, programmes and other activities of BIMSTEC Centers and Entities as agreed upon by the Member States.

Eradication of Poverty: – The member states Reiterate their commitment to the eradication poverty in the Bay of Bengal Region by 2030 in line with the 2030 Agenda for Sustainable Development and
call for effective implementation of the BIMSTEC Poverty Plan of Action and for gearing up efforts of all sectors to contribute to the over-arching goal of poverty alleviation.

Transport and Communication:-  All member nations committed  to establish seamless multi-modal transportation linkages and smooth, synchronized and simplified transit facilities through the development, expansion and modernization of highways, railways, waterways, sea routes, airways in the region and direct our respective authorities to speed up their efforts to conclude the BIMSTEC Coastal Shipping Agreement and the BIMSTEC Motor Vehicle Agreement as early as possible taking into account the special circumstances and needs of the Member States.

BIMSTEC Grid Interconnection: – The member states also agreed to provide uninterrupted and affordable power supply for the economic development of the region, through energy trade. They welcomed the signing of the Memorandum of Understanding on BIMSTEC Grid Interconnection and to instruct the relevant agencies to take concrete measures to initiate harmonization of technical, planning and operational standards for removing barriers to grid interconnections and also ensure early establishment of a BIMSTEC Grid and call for an early operationalization of the BIMSTEC Energy Centre in order to strengthen energy cooperation in the region.

Development of MSMEs :- The members Agrees to enhance cooperation for development, access and sharing of affordable technologies – including for Micro, Small and Medium Enterprises for promoting sustainable development across sectors and welcome the efforts of the Member States towards the signing of the Memorandum of Association on the Establishment of BIMSTEC Technology Transfer Facility in Sri Lanka.

Mountain Economy

All nations Highlighted the necessity of making concrete efforts to ensure the conservation of mountain ecosystems, including their bio-diversity in order to support sustainable development; welcomed the concept note on promoting mountain economies in BIMSTEC countries developed by Nepal to promote cooperation in this area; and decide to establish an Inter-governmental Expert Group to develop an action plan.

Counter Terrorism and Transnational Crime

Members discussed the possibility of signing of the BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters.

All members Expressed their determination to strengthen cooperation and coordination among the law enforcement, intelligence and security agencies; and decide to hold meetings at the level of BIMSTEC Home Ministers and continue with the BIMSTEC National Security Chiefs meetings as part of promoting cooperation and coordination on counter terrorism and transnational crimes.

PM Narendra Modi had proposed to host the joint military Exercise (MILEX-18) for to enhance cooperation in Counter terrorism tactics. The Field Training Exercise named MILEX-18, was inaugurated in second week on September.

Miscellaneous facts

The South Asian Association for Regional Cooperation (SAARC)

The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of nations in South Asia.

Its member states include Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka.

SAARC comprises 3% of the world’s area, 21% of the world’s population and 3.8% of the global economy, as of 2015.

SAARC was founded in Dhaka on 8 December 1985.

Its secretariat is based in Kathmandu, Nepal

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