India’s two-way trade and investment volumes with
China overwhelm the corresponding numbers with
each of its other neighbouring countries to the North
and the East, namely Bangladesh, Myanmar, Nepal,
and Bhutan. As with any other grouping of neighbouring nations, the security and territorial claims
of individual countries have consequences for economic exchanges. The physically and economically
larger, militarily more powerful nations within any
group of such countries with shared borders tend
to dominate, overtly or at times not so openly. This
is to be expected, given the smaller geographical
size, population, and lower technological-economic
development of the other four countries compared
to China and India. At the same time, surface
transportation routes between India and these four
smaller countries are much shorter. These relatively
inefficient overland transportation routes between
India and its smaller neighbours mean that additional transportation routes over land and water
could result in a multiplier effect on trade and investment volumes.
This study reviews the strategic aspects and related
ramifications of existing and potential surface
trading routes between India and the three South
Asian Association for Regional Cooperation
(SAARC) countries: Nepal, Bangladesh, and Bhutan,
and the Association of South East Asian Nations (ASEAN) member country Myanmar. If the current
military or some future leadership in Myanmar
were to become less apprehensive about political
liberalisation within the country, it could become a
key land transportation route for India to higher per
capita ASEAN countries such as Thailand, Malaysia,
and Vietnam. Given that this is unlikely to happen
soon, the alternative for India is to augment existing
sea routes to ASEAN nations. The currently strained
relations between India and China due to the military
confrontation in the Galwan area in Eastern Ladakh,
in April-May 2020, have complicated the raising
of trade and investment ties between the two most
populous countries in the world and within India’s
immediate neighbourhood (Kaura, 2020). In overall
terms, the differences in strategic interests between
India and its friends in the West and China1
are
likely to stand in the way of significant growth in
economic-technological exchanges. China has the
ability and intention to forge closer economic and
overall links with India’s neighbours to the north
and east, including Bangladesh. If India does not pay
sufficient attention, it could find itself incrementally
crowded out of its immediate neighbourhood, with
which it has had centuries of close economic, social,
linguistic, and religious ties. India needs to include
coordination with Japan and South-Korea in working
to enhance economic and transportation linkages
with its smaller neighbours to the north and east.
Authors
- Pages
- 52
- Published in
- India