India urges BIMSTEC group members to relook proposed FTA

Union Minister of Commerce & Industry Shri Piyush Goyal, addressing the inaugural edition of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Business Summit, urged BIMSTEC member to reassess their trade priorities to finalize the delayed Free Trade Agreement (FTA). He highlighted the necessity for member nations to evaluate and address the reasons behind the stalling of the FTA and to develop a set of recommendations that are agreeable to all seven countries.

The inaugural BIMSTEC Business Summit 2024, was organized by the Confederation of Indian Industry (CII) in collaboration with the Ministry of External Affairs, Government of India.

The Minister suggested that as an interim measure, the Trade Negotiating Committee and the business community explore a preferential trade agreement to enhance intra-regional trade and investment, thereby boosting regional competitiveness. He highlighted that trade among BIMSTEC countries is currently low and emphasized the need for greater integration and constructive feedback to improve trade facilitation and the movement of goods across borders.

 He proposed several measures to improve trade and investment among member states, including reducing trade deficits, strengthening trade facilitation, and integrating customs processes using technology. He advocated for the computerization of border controls and faster clearance of import-export applications to enhance the Ease of Doing Business. Additionally, Shri Goyal emphasized the need to strengthen supply chains, remove tariff and non-tariff barriers, and adopt international norms for seamless transport connectivity.

He highlighted the potential of regional startups and entrepreneurs in driving investment, trade, and tourism within BIMSTEC. He urged member nations to support technology development and agricultural cooperation to ensure food security, healthcare, and human resource development.

The Union Minister noted that BIMSTEC member states have a thriving blue economy with high demand for ocean products that boosts livelihoods and job creation while protecting marine and coastal ecosystems. He underscored the importance of regional value chains in boosting agricultural and mineral production to foster regional development.

In a bid to promote local currency trade, he urged other member countries to examine whether local currency trade could be balanced out between the countries in the region. He noted that feedback from the business community would assist political leaders in making informed decisions. He urged the CII to lead discussions on the proposed agreement and provide their recommendations by next year’s summit.

Representatives from the member countries including Sri Lanka, Myanmar, and Thailand emphasized the need for early conclusion of FTA negotiations to enhance trade and investment in the region.

Suchart Chomklip, Thailand’s Deputy Minister of Commerce, noted that the seven BIMSTEC countries make up 22% of the global population, have a combined GDP of US$3.3 trillion, and enjoy an average annual economic growth rate of 6.8%.

BIMSTEC, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, consists of seven members: five South Asian countries (Bangladesh, Bhutan, Nepal, India, and Sri Lanka) and two Southeast Asian countries (Myanmar and Thailand). The bloc has been negotiating a Free Trade Agreement (FTA) since 2004, when the framework agreement on the BIMSTEC FTA was signed. So far 22 rounds of talks have been held for the agreement. The last one was held in 2018. 

India’s total trade with BIMSTEC countries was recorded at US$ 44.32 billion in 2023-24. Thailand was India’s largest trading partner within the bloc, followed by Bangladesh.