Bloomberg News

India’s Krishna in Myanmar to Counter China’s Economic Ties

June 20, 2011

(Adds analyst comment in third paragraph.)

June 20 (Bloomberg) -- India’s Foreign Minister S.M. Krishna began a three-day visit to Myanmar today, holding the first high-level talks with the government elected in November as he seeks to counter China’s influence in the country.

Krishna, accompanied by Foreign Secretary Nirupama Rao, will meet Myanmar President Thein Sein to discuss increasing trade and cooperation in areas such as energy and defense. The governments will also discuss work on the Kaladan project that will improve transport links across their border, Krishna told reporters in New Delhi today.

“India wants to strengthen its economic ties with Myanmar, it doesn’t want it to go completely into the embrace of China,” said S. Chandrasekharan, director of the South Asia Analysis Group, a policy-research organization in New Delhi. “China has a head start in terms of influence. India started late so it is now looking to catch up.”

India and China are competing around the world to secure oil, gas and metals to feed their fast-growing economies. The two countries are investing in ports, railways and oil and gas pipelines in Myanmar, formerly known as Burma, that give them access to natural resources and trade routes in the Indian Ocean region.

November’s elections, the first in Myanmar in two decades, were won by the military junta-backed Union Solidarity and Development Party. The United Nations condemned the vote for excluding pro-democracy leader Aung San Suu Kyi and about 2,100 political prisoners. Suu Kyi was released from house arrest on Nov. 13, six days after the poll.

Energy Projects

Myanmar, sandwiched between China and India, Asia’s two fastest growing economies, is a resource rich country, with a proven 20 trillion cubic feet (570 billion cubic meters) of natural gas and mines that are potentially the world’s greatest source of high-quality rubies and jadeite jade.

Last year, China National Petroleum Corp. started building oil and gas pipelines across the country, and India approved plans for Oil & Natural Gas Corp. and GAIL India Ltd. to invest a combined $1.3 billion in a natural gas project.

Thein Sein met Chinese President Hu Jintao in Beijing on May 27, securing a series of financial agreements, including a 540 million euro ($776 million) line of credit from a government lender.

Indian bilateral trade with Myanmar has more than doubled since 2006 and reached $1.5 billion last year, according to Indian government figures.

--Editors: Mark Williams, Sam Nagarajan

To contact the reporter on this story: Andrew Macaskill in New Delhi at amacaskill@bloomberg.net

To contact the editors responsible for this story: Peter Hirschberg in Hong Kong at phirschberg@bloomberg.net


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