Various Connectivity Projects in South Asia

This is a fact sheet comprising information on various connectivity projects in South Asia involving India and its neighbours, their status, problems, expectations and bilateral / multilateral issues.

Importance of Connectivity

• Physical connectivity is directly co-related to trade, investment and development.
• The greater the connectivity, the higher is the prospect for trade, investment and development.
• There is hardly any country that is well placed in connectivity and poor at the same time. Rather, poor are only those countries that are lagging behind in connectivity.
• ASEAN’s Low road connectivity with India has proved a major hurdle in the advancement of Economic cooperation.
• India’s North East is lagging behind in development due to connectivity issue.

Problems in Connectivity in South Asia

• The road and rail links between India, Myanmar, Bangladesh are patchy, the quality of roads below standards and highways partially constructed with missing links.
• Maritime transportation suffers from twin problems of Operational efficiency as well as deficiencies of draft.
• Air infrastructure has improved in the recent years, but trading through air routes is much costlier. Air connectivity is just average when it comes to connecting to secondary town and lesser for small towns.

BBIN initiative

Bangladesh, Bhutan, India and Nepal (BBIN) motor vehicle agreement is an initiative taken by India. The transport ministers of four countries in South Asia, including Bangladesh, Bhutan, India and Nepal (BBIN) signed Motor Vehicles Agreement (MVA) at Thimpu in Bhutan in June 2015. Its aim is to reduce travel time and cost in transporting goods and also to ensuring seamless connectivity among the countries of the region. It will be complementing the proposed BIMSTEC MVA and is seen as a conducive model of sub-regional co-operation in the area of Connectivity, which involves transport as well as energy.

Key Issues and Current Status

This agreement was rejected by the National Council (NC), the upper house of the Bhutanese Parliament. Bhutanese Government was of the view that BBIN MVA is not of much help to Bhutan in economic development as Bhutan’s trade is mostly with India and both nations already allow free movement of vehicles across their border. Kindly note that Bhutan’s objections are environmental and not political. Consequently, BBIN has only three countries, which are trying to implement the MVA soon, while keeping a provision for Bhutan to join later. Bhutan had earlier requested to join the initiative later since its upper house of parliament failed to ratify the pact.

BIMSTEC MVA

BIMSTEC MVA will have all multi-modal features connecting Sri Lanka, which has so far been connected to the other members of the grouping only through air or sea.  This agreement is a critical part of India’s Act East policy, which is aimed at enabling strengthening of ties with the ASEAN in the periphery of China. BIMSTEC is also planning to promote tourism and coastal shipping between the member states. Connectivity through trans-border rivers among BIMSTEC member is also a target. Currently, this is under proposed state only.

The BCIM Economic Corridor

Bangladesh, China, India and Myanmar Economic Corridor is an initiative conceptualised for significant gains through sub-regional economic cooperation within the BCIM. The multi-modal corridor will be the first expressway between India and China and will pass through Myanmar and Bangladesh.

Progress Made So far

• The BCIM priority agenda has evolved over time. From the 3-T’s of Trade, Transport, and Tourism, the BCIM priority agenda has moved to TTE (Trade, Transport, and Energy).
• The idea of multi-modal transportation was also added to the BCIM connectivity agenda with the focus on Inland Water Transportation and the promotion of port development and coastal shipping.
• The year 2013 was crucial in the development of BCIM initiative. In February that year, a car rally from Kunming to Kolkata (K2K) was organised with great success

Issues/Concerns associated with the Project

• While people in border regions are more concerned about socio-economic and environmental impacts, national governments are more concerned with security and political issues.
• Issue of Regionalism and Sub regionalism– whether the aim of the BCIM project is to develop the remote areas or to link the remote regions to the global supply chain?”
• Given the rich biodiversity of the region, questions have been raised about the impact of the project on the region’s fragile ecology since the project would involve clearing of forests, land acquisition and possible eviction.
• India lacks the resources to set up competing networks compared to China.

Connectivity Projects involving India and Nepal

Nepal now stands connected with India through roadways, railways, airways and cross border power transmission lines. However, Nepal’s connectivity with countries other than India is poor. India played a key role in developing and modernising Nepal’s infrastructure structure, including the roads and airports.

Connectivity Projects Involving India, Bangladesh and Bhutan

The key connecting projects involving India and Bangladesh are as follows:

Bus Services Connectivity

Kolkata-Dhaka- Agartala Bus service would reduce the travel distance between the two state capitals of West Bengal and Tripura. Similarly, Dhaka-Shillong-Guwahati Bus Service would promote people to people contact between the two countries.

Power agreement and internet service

Prime Ministers of India and Bangladesh commissioned international gateway of internet service in Agartala and supply of 100MW power to Bangladesh from Tripura. India will supply 100 megawatt (MW) of electricity in return for 10 Gigabits per second Internet bandwidth.

Transmission Line Connectivity

A memorandum of understanding for trilateral hydropower cooperation among Bangladesh, India and Bhutan is expected to be signed soon. India had agreed to facilitate import of electricity to Bangladesh from hydro projects in Nepal. The MoU between NTPC Vidyut Vyapar Nigam Limited and Bangladesh Power Development Board for the supply of 500 mw hydropower from the 900 mw Upper Karnali Hydropower plant in Nepal was signed in April 2017.

At present there are 2 interconnections through which 660 mw of power is transferred from India to Bangladesh. The India plans to set up a 1,320 mw coal-fired thermal power plant at Rampal in Bangladesh and several private players are also setting up power stations in Bangladesh.

Pipeline Connectivity

India will construct a 135-km-long pipeline from Assam to supply oil to Bangladesh.

Air, Rail and Port Connectivity

These include:

• Bangladesh-North Bengal rail link,
• Chittagong-Kolkata-Colombo shipping connectivity
• Trade route connecting Nakugaon Land Port in Bangladesh to Gayleyphung in Bhutan via India.
• Dhaka-Chennai-Colombo air connectivity
• Bangladesh-Bhutan internet cables through India.

Connectivity Projects involving India & Myanmar – Kaladan Multi-Modal Transit Transport Project

This project will connect Sittwe Port in Myanmar to the India-Myanmar border and is expected to contribute to the economic development of the North-Eastern States of India, by opening up the sea route for the products.  It also provides a strategic link to the North-East, thereby reducing pressure on the Siliguri Corridor.

Kaladan Project consists of following segments-

• Kolkata to Sittwe port in Myanmar – Shipping – 539 km
• Sittwe to Paletwa (River Kaladan)– Inland Water Transport (IWT)- 158 km
• Paletwa to Indo-Myanmar Border-Road –  110 km- (in Myanmar)
• Border to NH54 (Lawngtlai)(in India) Road–  100 km

Problems with the project

• Kaladan project is running behind schedule. “Every stage of the project has suffered delays,”
• It was originally due to be completed in July 2013. Many more deadlines were set and missed.
• Under the original plan, the inland terminal was to be located at Kaletwa, north of Paletwa. However, the Kaladan River was found to be unnavigable beyond Paletwa. This required the road from Lawngtlai to be extended up to Paletwa.
• This “underestimation of the road length on the Myanmar side” has resulted in cost escalations.
• The Kaladan movement, an umbrella group of civil society organizations, has criticized India for opacity in the implementation of the project. Local communities were not consulted or informed about the project’s impact.

Connectivity Projects involving India, Myanmar & Thailand: India–Myanmar–Thailand Trilateral Highway

IMT Highway, which is under construction under India’s Look East policy that will connect Moreh, in Manipur India with Mae Sot, Thailand via Myanmar. The idea is to connect the trilateral highway with a free trade zone that will be developed at the Sittwe Port in Myanmar. The distance from the Sittwe economic zone to the trilateral highway is about 100-120 km.

Significance of IMT Highway

• Its political significance is that it will strengthen regional grouping and boost India’s look east / act east policy.
• Its economic significance is that it could substantially increase border trade with Myanmar, which has not picked up the way it should have because of infrastructure bottlenecks on both sides of the border but especially inside Myanmar. It is expected to spur growth in trade and investment in the entire region.
• Its strategic importance from India’s perspective is that it will connect Manipur and other northeastern states with Thailand through Myanmar. Thailand is already well linked to Malaysia and Singapore, which means that the trilateral highway to Mae Sot in Thailand could in effect connect India with four of its Southeast Asian friends.  Such connectivity project helps us to some extent in in countering China’s ambitious One Belt One Road (OBOR) initiative.

Bottlenecks in IMT highway

• Currently, this project is facing inordinate delays, and has already missed a couple of deadlines. Financial problems remain a contentious issue.
• New government in Myanmar has demanded a renegotiation of the Motor Vehicles Agreement (MVA) and its applicability on the trilateral highway as the agreement was negotiated under the previous military government. Additionally, there are also many debilitating security concerns in the region.
• India’s investment in Myanmar is a fraction of that of China. India invested just over $224 millionin Myanmar during fiscal year 2015-2016. In comparison, China invested $3.3 billion in Myanmar in 2015-16.
• Lack of coordination among different implementing agencies, poor monitoring, and financial constraints are among the main reasons for India’s failure to meet deadlines.
• Rohingya crisis in Rakhine state of Myanmar cannot be ignored.

Future Prospects in IMT

• India has also proposed extending the highway to Cambodia, Laos and Vietnam.

Other steps to boost Connectivity

Raisina Dialogue 2016

• It was envisioned as India’s flagship conference of geopolitics and geo-economics and was designed to explore prospects and opportunities for Asian integration as well as Asia’s integration with the larger world.
• The theme of the conference was ‘Asian connectivity’. The 2016 conclave focused on Asia’s physical, economic, digital connectivity and fostering common global spaces with an emphasis on Asia.

ITI-DKD-Y corridor

• This proposed “Trans-Asian Railway (TAR)” or the “ITI-DKD” (Istanbul-Tehran-Islamabad; Delhi-Kolkata-Dhaka) corridor
• It will be 6,000 km long, covering Dhaka-Kolkata-DelhiAmritsar-Lahore-Islamabad-Zahedan-Tehran- Istanbul.
• India is actively working with Asian countries to establish a railway network, starting from Dhaka to Istanbul.
• It would cover a 6,000-km journey across five countries – Bangladesh, India, Pakistan, Iran and Turkey.

Future Prospects

• There is also a proposal to extend this corridor to Yangon (Myanmar). Thus, the “ITI-DKD-Y” corridor could become one of the major international rail corridors in the world.

 Role of Regional Groups to Promote Connectivity (Physical, Digital,Transmission Line etc)

SAARC

• To quicken the economic growth, social progress, and cultural development.
• During the 18^thSAARC Summit in November 2014, Nepal signed SAARC Framework Agreement for Energy Cooperation to develop connectivity in power sector in South Asia.

SASEC

• South Asia Sub-regional Economic Cooperation (SASEC) is a program by Asian Development Bank (ADB), set up in 2001.
• It brings together Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal and Sri Lanka in a project-based partnership to promote regional prosperity by improving cross-border connectivity, boosting trade among member countries, and strengthening regional economic cooperation.

Economic significance

• SASEC seeks to strengthen multimodal cross-border transport networks that boost intraregional trade and open up trade opportunities with East and Southeast Asia.
• The program helps build modern and effective customs administration that speeds up the time and reduces the costs of moving goods, vehicles, and people across borders.
• Better connectivity will help unleash the tremendous potential for mutually beneficial trade between the seven SASEC countries.
• SASEC also assists member countries in improving energy security by developing infrastructure and promoting intraregional power trade to reduce costs and import dependence.
• In 2016, the SASEC countries approved the SASEC Operational Plan 2016-2025, a 10-year strategic roadmap, which introduced Economic Corridor Development as a fourth sectoral area of focus, to promote synergies and linkages between economic corridors across SASEC countries.
• Under assistance of SASEC new project of upgradation and widening of 65 kms of Imphal-Moreh Section of NH-39 in Manipur has been taken up. The project corridor is also a part of the Asian Highway No. 01 (AH01).

BIMSTEC as A substitute

• The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organization involving a group of countries in South Asia and South East Asia.
• These are: Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal
• It provides an alternative platform to India to engage with all its immediate neighbors such as Sri Lanka, China, Bhutan, Burma, Nepal, while keeping Pakistan at an arm’s length.
• BIMSTEC fits in very well with the concept of India’s Act East policy.
• Connectivity is the main theme in BIMSTEC. For example: the Kaladan Multimodal project that seeks to link India and Myanmar. The project envisages connecting Kolkata to Sittwe port in Myanmar, and then Mizoram by river and road.
• BIMSTEC members share “lot of commonalities” and there are no serious contentious issues in the grouping.

Connectivity Projects without India: China’s One Belt and One Road (OBOR) Initiative

OBOR initiative is China’s key development strategy that targets to boost its connectivity and trade in Asia, Africa, and Europe. It includes two components viz. Silk Road Economic Belt and 21st Century Maritime Silk Road.  It was proposed by Chinese President Xi Jinping in 2013. Considered a part of China’s recovered 21st century Silk Road diplomacy that pushes it to take a bigger role in global affairs. India has opposed the OBOR due to its sovereignty concerns over China Pakistan Economic Corridor (CPEC) which passes through Pakistan-occupied Kashmir (PoK). OBOR imitative is led by China and hence there is a possibility of China’s domination and a possible threat to India’s internal security.