R a h u l K a r a n

C h e n n a i C e n t e r f o r

C h i n a S t u d i e s ( C 3 S )

1 6 O c t o b e r 2 0 1 8

Acting Beyond Borders

- An Action Plan

for

Reorienting BIMSTEC -

Introduction

The recently concluded BIMSTEC Summit of

2018, held in Kathmandu led to the inclusion of

Blue Economy and Mountain Economy to the list

of sectors of cooperation among the members.

Given that BIMSTEC is a sector-driven

organization aiming to harness and accelerate

shared economic growth in areas of mutual

interest, the addition of two new sectors was

received with some skepticism, given the limited

progress made so far in existing sectors. These

sectors, namely Trade, Technology, Energy,

Transport, Tourism, Climate Change and People-

to-People contacts are a few of the focus areas

for the BIMSTEC member states of India,

Bangladesh, Nepal, Sri Lanka, Bhutan, Myanmar

and Thailand. Though the grouping has been

operational since 1997 and targets a wide

variety of issues for cooperation, it has

organized a Summit only four times. However,

since the Leaders Retreat at Goa in 2016 where

Indian PM Narendra Modi expressed New

Delhi’s intention to prioritize BIMSTEC, a flurry of

activity has fueled speculation about India’s

attempted revival of the grouping.

Despite skepticism from certain sections, the

strategic importance of the Bay of Bengal cannot

be overstated, given its location, its role as a

funnel for trade into the Malacca Straits and

being a primary area of operations for the Indian

Navy. Notably, one-fourth of global trade every

year is carried by global maritime shipping

routes sprawled across the Bayi. The Bay’s

energy resources are some of the world’s most

abundant, but are yet to be fully exploited by

BIMSTEC member states. On the other hand, the

silt-rich Bay’s waters contain large fishing stocks

that are driving vigorous efforts of regional

players. Leveraging these geographic and

resource advantages the Bay has to offer is the

basis for the BIMSTEC grouping to cooperate on

infrastructure, transportation, trade facilitation

and connectivity.

This cooperation is crucial, as the region has

scope to overcome physical and psychological

barriers to integration. The need for connectivity

networks such as BIMSTEC is apparent, as seen

in the dependence of Nepal and Bhutan on India

for access to sea trade, given the smaller

countries’ landlocked nature. Bangladesh’s geo-

strategic advantage of being situated at the

junction between South and South-East Asia can

be cultivated through BIMSTEC projects, thus

bridging the two regions. This would give

benefits of trade diversification to Bangladesh

as well. For India, Thailand and Myanmar, such

connectivity between regions is a means to

integrate neighborhoods, and hence enable

unprecedented economic growth for BIMSTEC

members.

Mainstreaming the Alternative:

BIMSTEC over SAARC

BIMSTEC’s newfound prominence partly stems

from SAARC’s moribund and defunct status

since 2016. Shortly after cancelling the 2016

SAARC Summit, Indian Prime Minister Narendra

Modi signaled the advent of a new phase of

cooperation through BIMSTEC. Significantly, the

2016 BRICS-BIMSTEC outreach summit in Goa

brought international attention to the revival of

BIMSTEC as India’s priority forum for regional

cooperationii. New Delhi’s rejuvenated

commitment was underlined eight months later

in 2016 by an increase in the MEA’s budget for

BIMSTEC from 12 lakh to 4.5 croreiii. The Indian

PM appeared to be making good on his

statement made at the 2014 SAARC Summit in

Kathmandu, to seize opportunities for

integrating the region ‘through SAARC or outside

it’ and ‘among us all or some of us’.

Image Courtesy: The Hindu/PTI

However, BIMSTEC does not share the same

priority status as was enjoyed by SAARC

previously, from the perspective of New Delhi or

India’s neighbors. BIMSTEC has been criticized

for being a lethargic and ineffective ‘talk shop’.

New Delhi may be looking to mainstream

BIMSTEC and accord a more central role to the

grouping in India’s foreign policy. Nonetheless,

the grouping requires streamlining and reform to

take the stage as New Delhi’s main regional bloc.

In this context, this report analyses the current

status of BIMSTEC and its potential to emerge

not only an alternative to SAARC, but also

become the prime connectivity and trade hub of

the region.

BIMSTEC offers a more amenable environment

for New Delhi’s diplomatic interactions with its

neighbors, compared to SAARC. Primarily, the

balance of power in BIMSTEC is different from

that of SAARC, the latter being unstable and

riddled with political differences. This is based

on the advantages offered by BIMSTEC

members. The grouping includes Thailand, a

regional player whose relations with India can

have the effect of calming nerves of BIMSTEC

members wary of New Delhi’s influence. And

unlike the India-Pakistan dynamic in SAARC,

which is based on animosity and disagreement,

the India-Thailand relationship is based on

convergence in significant policy areas

concerning trade and connectivity.

Moreover, India’s Act East policy and Thailand’s

Act West Policy indicate a common interest in

bridging South Asia and South East Asia. India’s

neighbors have also expressed their ambitions

to activate BIMSTEC to their advantage.

Bangladesh too has an Act East Policy and Sri

Lanka has voiced its intention to develop as a

regional hub for maritime trade, like Singapore.

In this respect, Myanmar is realizing its role as a

bridge between South Asia and South-East Asia

and is keen on capitalizing on its location. The

stable balance of power and acknowledgement

of common interests between members are

advantages of BIMSTEC over SAARC that could

translate into smoother cooperation and greater

progress.

Image Courtesy: bimstec.org

How to not repeat history

Despite the advantages offered by a more

balanced and stable grouping, BIMSTEC has

found it difficult to conclude negotiations on

Agreements. This hints at economic self-interest

of each member state acting as a barrier to

progress in BIMSTEC. This report will explore

resolutions for such issues subsequently.

Interestingly, Agreements to improve trade and

connectivity including the Free Trade Agreement

(FTA) and Motor Vehicles Agreement (MVA) were

originally negotiated under SAARC, which failed

to implement them. The same Agreements are

still being negotiated in BIMSTEC with little

progress. This report offers suggestions on

expediting the negotiation process.

Another problem area for which this paper will

give solutions, is the BIMSTEC FTA. This FTA is

yet to be ratified after prolonged negotiations

spanning 14 years due to the fact that member

countries have not moved past the framework

agreementiv. There is an alarming sense of déjà

vu vis-a-vis the South Asian Free Trade

Agreement (SAFTA). In the case of BIMSTEC FTA

too, countries have disagreements about

implementation and non-tariff barriers. The

framework agreement of the BIMSTEC FTA

outlines specific areas of trade facilitation,

which require consensus for implementation–

Mutual Recognition Agreements (MRA’s),

customs cooperation, travel facilitation and non-

tariff barriers. Unless these are achieved, cross-

border trade via the BIMSTEC FTA would not see

reality. Bhutan’s delay in implanting the

BIMSTEC Motor Vehicles Agreement (MVA)

resonates of SAARC scenarios. While the SAARC

MVA had been stalled by Pakistan, Bhutan’s

upper house of parliament is debating the

ratification of the BIMSTEC MVA for the third

time since 2015v. This issue will be seen in

detail subsequently in this paper.

Bhutan’s actions are a reflection of how

protectionist attitudes and mistrust need to be

tacked among BIMSTEC members. For instance,

some BIMSTEC members are reluctant to

participate in areas of military and counter-

terrorism cooperation as well. Counter terrorism

and military cooperation are the most recent

sectors in BIMSTEC to receive special attention

since 2016. Military cooperation in BIMSTEC

faced its first roadblock when members Nepal

and Thailand refused to participate in the joint

military exercises conducted at Pune, India in

2018vi. While security cooperation was never a

consideration in SAARC, BIMSTEC would do well

to overcome differences in this realm, given the

conspicuous advantage of no border disputes

among member states.

Hence this report would analyze various

dimensions of BIMSTEC, the problem areas and

offer recommendations. These will be in the

following domains:

• BIMSTEC FTA

• Trade Facilitation

• Connectivity

• Motor Vehicles Agreement

• Coastal Shipping Agreement

The way forward to address the under

mentioned issues is also projected

• Over-bureaucratization and

Understaffing

• The China factor

BIMSTEC FTA

The implementation of the BIMSTEC FTA would

be a positive first step for intra-regional trade.

However, negotiations are yet to be concluded.

The framework agreement was signed fourteen

years ago and specifies the timeline for

negotiations for trade in goods as 2005 and for

trade in services and investment as 2007vii. The

FTA was still being negotiated at the 2018

Kathmandu Summit. The Agreement seems to

BIMSTEC Leaders at the 4th BIMSTEC Summit in

Kathmandu, Nepal. Image Courtesy: Hindustan Times

be facing resistance from members of the

grouping. Sumith Nakandala, Former Secretary

General of BIMSTEC, responding to a question

about the delayed FTA pointed out that “one

country” delayed the submission of

recommendations till 2014 and wanted to revise

the list of Production Specific Rulesviii.

Reportedly, Thailand may have been the country

being referred to. In fact, Bangkok is currently

reluctant to allow Indian computer engineers to

work in Thailand citing fears that a large inflow

of Indian professionals will adversely impact the

prospects of the local workforceix.

In light of the above facts, it is imperative for

India to scrutinize the issue for a solution that

clears the way for the BIMSTEC FTA. The

movement of Thai professionals and skilled

personnel is also an issue in India, where

lobbying efforts by professional associations

stall the removal of barriers. This reluctance to

make markets accessible hints at economic self-

interest and protectionist attitudes that typically

drives negotiations between states. It is possible

for New Delhi to surmount this challenge by

engaging in reciprocal action that demonstrates

the mutual economic benefits that will accrue

from greater market access. New Delhi could

overcome this challenge by eliminating one of

the most important barriers to the movement of

Thai workers in India, which is the minimum

salary condition of $25,000 per annum imposed

on foreign workersx. This restriction is

particularly harmful for Thai spa, massage and

medical services in India, leading to the closure

of 50 spa projectsxi. It would allow India and

Thailand to leverage the sectors in which they

enjoy comparative advantages and harness the

benefits of complementaritiesxii. Reciprocal

action by India and Thailand to overcome self-

interest should reduce the trust deficit and

positively affect the finalization of the BIMSTEC

FTA.

The FTA is crucial for the facilitation of intra-

regional trade within BIMSTEC countries, which

currently stands at 7%xiii. Successful groupings

like ASEAN and the EU have higher level of

dependence among members at 22.8% and

63% respectively. Though some studies have

argued that implementing the BIMSTEC FTA

would not impact intra-regional trade

significantly, it is a necessary pre-condition, if

not sufficient for the creation of Regional or

Global Value Chains.

Trade Facilitation

Trade facilitation measures play a significant

role in overcoming barriers and enabling

economic integration of BIMSTEC members.

Overcoming trade barriers will be a significant

challenge for BIMSTEC, but is also an

opportunity to inspire confidence in the

grouping. These barriers are relatively high in

South Asia compared to the rest of the world,

making the resolution of these issues imperative

for future economic growth. Table 1 outlines

costs and delays incurred at the border that

impede intra-regional trade among BIMSTEC

members. Costs and delays are a result of

gateway barriers and behind the border issues.

They refer to non-transport and ‘soft’

infrastructure issues concerning the

administrative and operational aspects of cross-

border trade. They present themselves in the

form of complex certification requirements,

inefficiently run border crossings, restrictions on

rail and road movement of goods, customs

clearance procedures, long dwell times at

ports/borders and the lack of regulatory

harmonizationxiv. Table 1 below illustrates that

the trading environment in BIMSTEC is a

consequence of bottlenecks at the border,

behind the border and across the borderxv.

To illustrate how these costs and delays

translate into low level of intra-regional trade,

take the case of Nepal. Nepal has been provided

with the facility to import bulk cargo via

Kolkata\Haldia port from where it takes 11.5

days for cargo to reach Birgunj in Nepal by railxvi.

According to the Nepal Freight Forwarders’

Association, around 600 Nepal-bound

containers arrive in Kolkata port daily, but only

half of them are transferred to Birgunj dry port

due to delays in clearancexvii. In the case of

Nepal’s imports, cargo spends almost 5 days at

Table 1: Trading Environment in BIMSTEC

Image Courtesy: WDI and WEF

the Birgunj-Raxaul land border in clearing goods,

loading and unloading and idle time inside the

portxviii. The delays in moving cargo across the

border arise from congestion at the Raxaul-

Birgunj land port where the problems of

insufficient warehousing, inadequate

infrastructure, lack of equipment to load and

unload goods and attitudes of customs officials

add delays to the imports/exports of Nepal.

There are also reports of Nepali traders being

forced to suffer shipment delays and pay money

as demurrage charges due to complex

paperworkxix. Though the Indian government has

made the Vishakhapatnam port available to

Nepali traders, very few traders use the new

route citing the lack of adequate infrastructure

and higher costsxx. Granting access to the port

does not by itself constitute an improvement in

the trading environment, and has to be

complemented with trade facilitation measures

that reduce costs and delays.

Several studies have made recommendations

for such measures, and most identify customs

procedures as the primary obstacle to

facilitating economic activity. In a survey carried

out by FICCI in 2017 (See Graph 1), respondents

pointed out that simplified customs processes

was the first step to make BIMSTEC a pro-

business regionxxi. All BIMSTEC members other

than Thailand have complex customs clearance

procedures requiring large amounts of

documentation that cause delays and

discourage businessxxii. The World Bank reports

that the time taken to comply with Thai border

regulations takes 50 hours, while the same

takes 265 hours in Indiaxxiii. Another indicator

that illustrates the document-heavy customs

procedures at Indian borders is the time spent

on document compliance, which is 4 hours in

Thailand and 61 hours in Indiaxxiv.

BIMSTEC members have much to gain, when

they would make uniform implementation of the

principles set by the Revised Kyoto Convention

on Customs procedures and compliance This

Convention calls for the maximum use of IT,

simplification of documentation and

transparency in actionsxxv. Clearly, the goal of

optimum trade cannot be achieved without

internationalization of standards.

In this respect, New Delhi could set an example

by harmonizing these standards and simplifying

customs, which could be followed by similar

efforts from India’s neighbors, The Asian

Development Bank (ADB) Study on BIMSTEC

Transport, Infrastructure and Logistics

recommends reforming customs procedures

Graph 1: How to make BIMSTEC a pro-business region

Image Courtesy: FICCI Perception Survey 2017

especially in the Indian North-East Region (NER)

by further automating customs procedures,

developing national single windows and

harmonizing import-export procedures between

member states. The NER is positioned to act as

a logistics cluster for trade in and around the

region, aligning the recommendations of the

ADB study with India’s developmental agenda

for the NERxxvi. Furthermore, it would facilitate

the development of Regional and Global Value

chains that rely on timely delivery of

parts/components. Unfortunately, in the climate

of big infrastructure projects that currently

dominates policy on connectivity, customs

simplification and regulatory harmonization

does not get the attention it should. BIMSTEC

members cannot afford to concentrate mostly

on trade with big powers while not prioritizing the

Bay neighbors. It must also be pointed out that

cumbersome customs and regulatory

procedures stand in the way of promoting

people-to-people contacts that generate

goodwill among members and can have the

effect of reducing mutual suspicion.

The spillover effect of trade facilitation into

people to people contacts:

People-to-people exchanges are also affected by

barriers to cross-border interaction. Cultural

exchanges are important for peoples of different

countries to understand each other and develop

a common identity. Tourism and education are

means to promote an understanding between

cultures and countries that India has been

historically well connected to. In the modern era,

complicated visa and documentation

procedures, requirement of special permits and

poor coordination among tour operators has

impaired the ability of people to connect with

cultures of different regions. For example,

Jayantha Colombage, the Director for Indo-

Lanka Initiatives of the Pathfinder Foundation

pointed out that he received only a four day visa

when he went to Bangladesh for a conference,

while the US was prepared to offer him a five

year visa with multiple entries and the UK

offered him a two year visaxxvii. Therefore, trade

facilitation would benefit not only commerce, but

enable cultural exchange as well.

Border Trading post at the India Nepal border. Image Courtesy: Kathmandu Post

Connectivity

Connectivity is one of the main pillars of

cooperation under BIMSTEC and the means of

integrating economies in the Bay of the Bengal

region. BIMSTEC’s success in this key area will

shape opinion on the grouping and its efficacy.

So far, several agreements have been

negotiated on connectivity. One such agreement

that improves both trade and people-to-people

contacts is the Motor Vehicles Agreement (MVA).

The MVA facilitates trade and improves

connectivity by eliminating the need to transship

goods – unloading goods from one truck and

loading them onto the truck of the other country

at the border, which is a cumbersome process

that increases delaysxxviii. The MVA also contains

a Passenger Protocol that details the procedures

for cross-border movement of busses and

private vehicles. The first trail run of the

Bangladesh-Nepal Bus service that runs through

India as a part of BBIN was a positive

development for the MVA which demonstrated

cost savings of about 20% alongside a

substantial reduction in timexxix. But the MVA has

not been implemented by Bhutan, who has

expressed concerns about the livelihoods of

Bhutanese truckers and wants a cap fixed on the

number of vehicles entering its territory. The

increase in vehicle traffic and tourists may

damage the environment of Bhutan, the only

Carbon-Negative country in the worldxxx.

However, India has a chance to get Bhutan on

board the MVA through reciprocal action.

Thimphu has raised the issue of Bhutan’s

decreasing exports to Bangladesh as a result of

quotas imposed on the number of Bhutanese

trucks entering Bangladesh. The decline was

attributed to a ratio system unilaterally

developed by Truck Owners and Exporters

Association of Changrabandha, West Bengal

that allows only 25 trucks carrying Bhutanese

goods to enter Bangladesh for every 30 trucks

with Indian goodsxxxi. This bottleneck has

resulted in only 50 Bhutanese trucks entering

Bangladesh while there are 100-150 trucks

carrying Bhutanese goods waiting to enter

Bangladesh every day. New Delhi has the

opportunity to break this bottleneck and

demonstrate the benefits to trade that would

accrue if the MVA was ratified. While pushing

other members to join the initiative, New Delhi

must look to find practical ways, like the trial run

of the bus service and reciprocal action, to

demonstrate the efficacy of these initiatives.

Unfortunately, the Agreement may face more

roadblocks in the future with Thailand also

expressing concerns about the effect of the

Agreement on its domestic transport industryxxxii.

Conveying the importance of the MVA for future

big ticket infrastructure projects can have the

effect of softening Thailand’s position. New

Delhi could argue that since the MVA is slated to

boost trade once the India-Thailand trilateral

highway is completed, ratifying the MVA is

imperative for the highway to bring intended

benefits of increasing the volume of trade across

borders.

Coastal Shipping Agreement (CSA):

The participation of landlocked countries like

Nepal and Bhutan in intra-regional trade can be

improved through greater maritime connectivity

that the Coastal Shipping Agreement looks to

address. Currently, over-land routes are the

dominant means of transporting cargo in the

BIMSTEC region and account for about 70% of

the freight movement in the regionxxxiii. However,

better maritime connectivity will ensure that a

greater volume of trade is transported through

the Bay of Bengal.

The Coastal Shipping Agreement (CSA)

distinguishes between coastal shipping and

The India-Thailand Highway which passes through

Myanmar and NER will bring South and South-East Asia

closer. Image Courtesy: Times of India

deep sea shipping since coastal shipping is

cheaper because it is carried out by smaller

vessels and requires lower draft, thereby

reducing costs and making it more efficientxxxiv.

It is an environmentally friendly means of

transport and is of particular interest for Nepal

and Bhutan.

The benefits of the CSA are evident from the

India-Bangladesh Coastal Shipping Agreement

which has reduced travel time for India

Bangladesh trade. Prior to the CSA between

India and Bangladesh, maritime trade would

have to be routed through Colombo or

Singapore, for which freight charges were

between $1700 USD - $2400 USD and transit

time was 30 - 40 days. However, with the CSA,

transit times have been reduced to 8 – 10 days

and costs have shrunk to $400 USD.xxxv This has

the added advantage of reducing costs to

transport goods from Bangladesh and mainland

India to the NER. As the leader of the Working

Group on Trade, India must fast track

negotiations on the CSA, by highlighting the

success of Bangladesh in improving maritime

connectivity.

For greater connectivity between regions and for

improved trade across borders, the CSA and

MVA agreements must be prioritized and their

implementation should be expedited. To do so,

New Delhi must demonstrate that the MVA and

CSA, will yield the maximum intended benefits of

infrastructure spending on highways and ports

The ADB BTILS study has identified and

prioritized 66 projects (See Table 2) that can

bring about an improvement in trade

facilitationxxxvi. However, these hard

infrastructure projects need regulatory

harmonization and Agreements like the MVA and

CSA that simplify the procedures and processes

associated with the transport of goods and

people across borders, without which the

projects will have limited impact.

Tackling other challenges in

BIMSTEC Beyond Over-bureaucratizion and Understaffing

India’s attempts to cultivate momentum for

contemporary South Asian regionalism have met

Shipping Routes as per the protocols of the CSA

Image Courtesy: ADB BTILS Study

Table 2: List of projects prioritized by the ADB BTILS Study to improve trade and connectivity.

with limited success. While discussions and

cooperation through SAARC have reached an

impasse, the lack of leadership and streamlining

in BIMSTEC has created its own share of

problems. Marked by infrequent Summits,

stalled agreements and a marginalized status of

the grouping symptomatic of the lack of

leadership, BIMSTEC remains underutilized.

Cooperation under BIMSTEC has expanded to

14 sectors, already an unwieldly list. However,

BIMSTEC does not have the resources or

manpower to generate progress in all the fields

considering that the grouping operated without

a secretariat till 2014 and has a staff of only ten

membersxxxvii. India’s earlier commitment to

BIMSTEC is also questionable since its budget

for the grouping until 2016 was only Rs. 12

lakhsxxxviii. It has been recommended that

rationalizing the organization by reducing the

sectors of cooperation and focusing on priority

areas is a way to make the grouping relevant and

active.

An active Secretariat with specific directives to

implement Agreements and follow through with

negotiations is essential for BIMSTEC. A stronger

Secretariat will perform the task of eliminating

mutual suspicion among members who fear that

India seeks to promote its own interests through

BIMSTEC. It will also maintain continuity and

consistency in implementing policies and

projects that would otherwise be tethered to the

uncertainties of domestic politics and elections.

To safeguard against these uncertainties, the

BIMSTEC Secretariat should be empowered with

more personnel and finances. The functioning of

the Secretariat could be complimented with the

inclusion of think tanks and advisory groups that

assess the effects of various Agreements and

engage in dialogue with partners in other

BIMSTEC countries. These linkages would have

the effect of gauging and creating public opinion

on BIMSTEC and its agreements, while bridging

the resource gap that constrains BIMSTEC.

The China Factor

China’s infrastructure projects and financial

assistance in South Asia have the potential to

influence India’s neighbors. Beijing’s influence

has been shrewdly calibrated in the form of

infrastructure and connectivity projects for

India’s neighbors who are either geographically

inaccessible or lack the resources to develop

connectivity with other markets. Nepal has

indicated its willingness to engage Beijing and

relieve its dependency on India to diversify its

economic growth.

Beijing recently signed an Agreement with

Kathmandu to build the Kathmandu-Kerung

railway line, which is an extension of the Qinghai-

Lhasa railway line. The Kathmandu-Kerung

railway line is part of the Trans-Himalayan

Multidimensional Connectivity Network, which

was one of eight cooperation deals worth $2.4

billion USD signed by Nepal and China in

September 2018 that focused on infrastructure,

connectivity and energyxxxix. The railway line

opens up a previously difficult-to-access market

of 400 million people by land and will diversify

Nepal’s trade, reducing dependency on India

and also raising Kathmandu’s confidence during

trade negotiations with India.

Nepal also stands to benefit from the Transit and

Transportation Agreement that grants Nepal

access to four Chinese seaports, three land

ports for imports and six transit points for

exports, for third-country tradexl. These

Agreements and projects have the potential to

fulfill promises of economic growth that K.P. Oli

made to the people of Nepal during the elections

in 2017, thereby justifying Kathmandu’s

relationship with Beijing. The railway and Transit

and Transportation Agreement improve Nepal’s

bargaining position vis-a-vis India and ensure

that in the event of another blockade,

Kathmandu is not stranded.

The Kerung-Kathmandu railway line. Image Courtesy:

Spotlight Nepal

Alarmed by the inroads made by China since

2017, New Delhi reacted to these developments

by fast-tracking the construction of a 130 km

railway line from Raxaul in Bihar to

Kathmanduxli. The Agreement was signed at the

BIMSTEC Summit in Kathmandu where PM

Narendra Modi and PM K.P. Oli agreed to

develop connectivity and bilateral ties between

the nations. An amendment was also made to

the provisions of the Transit Treaty that allows

Nepal to import bulk cargo directly to three other

transit points other than Birgunj, which faces

delays and hassles. The expansion of Nepal’s

import capacity is welcome and underlines

India’s relevance to Nepal’s economic

development. Overall, the agreements are an

attempt to improve regional connectivity but are

perceived to take place when a compulsion to

match China’s offer bothers New Delhi. Now that

an alternative to India’s support has been made

available to Kathmandu by Beijing, Nepal is

unlikely to be swayed by ad-hoc, piecemeal

overtures.

Nepal’s position and China’s influence do not

bode well for BIMSTEC whose inaugural military

drills and disaster relief exercises Kathmandu

did not attendxlii. Instead, Nepal participated in

counter-terrorism exercises with Beijing held

only 10 days laterxliii. Moreover, K.P. Oli has

maintained that SAARC cannot be replaced by

BIMSTEC, which has yet to gain any momentum.

With Nepal staking the future of BIMSTEC on the

revival of SAARC, New Delhi will have to contend

with the idea of revisiting cooperation through

SAARC where China is an observer state.

Moreover, it could undermine New Delhi’s

attempt to isolate Pakistan in SAARC.

In short, New Delhi stands to lose the

cooperation of its neighbors if BIMSTEC fails to

deliver on its commitment to regional

connectivity. This makes it more incumbent for

India to apply the recommendations made in

this report, which would lead to BIMSTEC

becoming a buzzword concerning the region’s

connectivity and trade.

Conclusion

BIMSTEC and SAARC do not serve the same

strategic purpose, but share common objectives

for the South Asian region. Realizing these

objectives – greater connectivity, increased

trade and alignment in security responses – is

more likely through BIMSTEC as a result of

convergence in foreign policies of BIMSTEC

members. This is a positive for the grouping that

is free from contentious issues. This

environment in BIMSTEC can facilitate greater

progress on trade facilitation and people-to-

people contacts, where New Delhi and other

members can concentrate their efforts to

generate momentum.

BIMSTEC can benefit from prioritizing customs

cooperation, regulatory harmonization and other

trade facilitation measures that are often

sidelined for high profile infrastructure projects.

Delivering on these areas of cooperation will

inspire confidence in the operational capacity of

BIMSTEC and increase the ability of large

infrastructure projects to improve trade and

connectivity. Doing so achieves foreign policy

objectives for New Delhi while also attaining

some of its national development goals in the

NER. However, this process will require

increasing the autonomy and authority of the

BIMSTEC Secretariat which New Delhi has only

recently begun to do. An independent and

dedicated Secretariat will bring consistency to

the workings of the grouping, keeping it relatively

free from the influence of New Delhi or any other

member.

Like with other regional groupings, BIMSTEC is a

platform for negotiating the self-interest of

states. To overcome differences and deadlocks

in negotiations, New Delhi must engage in

reciprocal action to demonstrate the mutual

benefits that accrue from better connectivity and

regulatory harmonization across borders. The

MVA and CSA must be placed front and center of

discussions on connectivity while efforts like the

BBIN bus services from Bhutan to Bangladesh

must be encouraged as ways of bringing

members on board. For its part, New Delhi must

empower the grouping to demonstrate the

positive effects of integration, while keeping the

grouping alive and active.

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