Jun 27, 2013

India Inc's next big destination: Myanmar

Chalo Myanmar’! This seems to be the new mantra of Indian industry which is not leaving any stone unturned to make its mark there. From telecommunications to energy to aviation, Indian industry is making its presence felt everywhere.

Albeit late, India seems to be determined now to make up for the time it lost there, while countries like US, Japan and China have all started making deep inroads there.

At present, Indian investments in Myanmar stands at around $273.50 million, which is expected to soar to $2.60 billion in the next few years. Some of companies that are already present there are OVL, Jubilant Oil and Gas, Century Ply among others.

Other investors having operations in Myanmar are Tata Motors, Essar Energy, RITES, Escorts, Sonalika Tractors, Zydus Pharmaceuticals Ltd., Sun Pharmaceuticals Ltd, Ranbaxy, Cadila Healthcare Ltd, Shree Balaji Enterprises, Shree Cements, Dr. Reddy's Lab., CIPLA, Gati Shipping Ltd, TCI Seaways, Apollo, AMRI.

Recently during the visit of commerce and industry minister Anand Sharma there, the government set up India-Myanmar Joint Trade Committee which will be co-chaired by Bharti Enterprises’ Sunil Bharti Mittal. The first meeting of the committee took place on June 7.

The Myanmar government awarded two telecom licenses under their new policy framework. Bharti Airtel has been shortlisted for submission of final bids.

“Out of Myanmar’s total trade volume of over $18 billion, India accounted for around 7.5 percent (in 2011-12) and India is behind China, Singapore, Thailand and Japan in exports to Myanmar," said DS Rawat of Assocham.

India-Myanmar bilateral trade has expanded significantly from $12.4 million in 1980-81 to $1,070.88 million in 2010-11. With Myanmar exports to India at more than three times its import value, trade balance has been in favour of Myanmar in the last several years, he said.

In the oil and gas sector, Myanmar Government has shortlisted 59 companies for submission of final bids for 18 onshore gas blocks on offer. Seven Indian companies are part of those shortlisted. OVL and GAIL have announced $1.33 billion investment in China-Myanmar gas pipeline project.

The construction of two parallel pipelines for gas and oil has been awarded to Punj Lloyd which involves investment worth $475 million for building 200 km Kyaukphyu-Kunming Oil & Gas pipeline. Jubilant Energy India has also won the government’s contract worth $73 million for exploring an onshore block in Central Myanmar.

India has also urged the Myanmar government to revive discussions on the gas pipeline connection between India and Myanmar through Bangladesh. For this, the Indian government has recommended the name of Essar Ltd.

Recently, Myanmar government opened tendering for exploration and production of onshore and offshore oil blocks. For the 18 onshore blocks, Indian companies both public sector and private companies (ONGC-OVL, Jubilant, Cairn energy group, Gujarat etc) have been qualified for second round of bidding process.

In order to create a better connectivity, India’s SpiceJet has asked for operating rights for flying to Yangon from Delhi through Dhaka (Bangladesh). India is also involved in the infrastructure development of Myanmar. It is involved in building inland waterways and upgradation of the Sittwe Port.

Shipping Corporation of India Ltd. (SCI) has conducted feasibility study to start a liner service between India and Myanmar.