Overcoming a Strategic Blindspot: India’s Turn Towards Myanmar

Published November 12, 2024 | This is a working paper presented at the Takshashila Institution Internal Conference on ‘India’s Neighbourhood’, September 2024

Authors

Executive Summary

As instability and unpredictability define India's neighbourhood, marked by Pakistan’s persistent internal crises, China’s aggressive posturing along India's borders, and political unrest in Bangladesh, India’s engagement with Myanmar is a crucial component of its broader regional strategy. This paper presents a three-dimensional framework categorising India’s engagement with Myanmar through state-to-state, state-to-people, and people-to-people interactions.

Through an analysis of these prisms, the paper briefly outlines India’s interests in Myanmar, the current engagement scenario, the challenges in pursuing an effective foreign policy, and the strategies India can employ to preserve its long-term objectives. While India’s interests in the country spread over several domains, including security, economic cooperation, regional connectivity, and geopolitical balancing, Myanmar has regretfully been a blindspot in India’s traditional imagination of its neighbourhood.

I. Introduction

There are three important stakeholders in Myanmar today: the military or the Tatmadaw, the National Unity Government (NUG) in exile, which claims legitimacy as Myanmar's democratic leadership, and the Ethnic Armed Organizations, which seek greater autonomy and rights for themselves. Foremost, India seeks to collaborate with Myanmar on counterinsurgency and border security to mitigate threats from insurgent groups operating in its northeastern states. Economic goals complement this security-driven engagement, as Myanmar is essential for India to improve regional trade and infrastructure connectivity. 

However, several challenges have prevented deeper engagement. Political instability, particularly following the military coup in 2021, has complicated India’s ability to maintain balanced diplomatic relations. Further, China’s expanding footprint in Myanmar via infrastructure projects and economic aid challenges India’s influence as Myanmar grows more reliant on Chinese investments. The country’s internal conflicts and human rights issues surrounding the Rohingya crisis have also generated international scrutiny, placing India in a difficult position.

Historically, however, India has enjoyed better ties with Myanmar on all three fronts- state-to-state, state-to-people, and people-to-people- than it currently does. During the 1990s, India was among the few countries to engage with the military-led State Law and Order Restoration Council (SLORC), recognising the strategic importance of cooperation and regional stability in the northeast. In recent years, however, India’s approach to Myanmar has become more restrained. 

Cross-border interactions, particularly among communities in border villages, alongside cultural and religious affiliations, such as Buddhism, led to a sense of kinship and shared heritage. This was coupled with higher migration rates in previous decades, creating robust social linkages between the two nations. However, these ties have also weakened recently, with reduced migration and fewer cultural exchanges. Similarly, state-led initiatives that were already limited have seen further regression.

Therefore, it becomes essential to assess the roadblocks and opportunities that define the bilateral relationship and explore how India can tackle these challenges to enhance its influence and maintain regional stability in the years to come.

II. India’s Interests

Security and Counter-insurgency Cooperation

India’s northeastern states, such as Nagaland, Manipur, and Mizoram, have long struggled with insurgent movements. Many of these insurgent groups have used the dense forests and porous borders between India and Myanmar to find shelter, regroup, and conduct cross-border operations. The Indian government views cooperation with Myanmar as critical to combatting these insurgencies. In recent years, Myanmar’s military has worked with India’s security forces to conduct joint operations against rebel groups and other northeast insurgent organisations operating from Myanmar’s territory.

Ensuring that insurgent groups do not find sanctuary in Myanmar is key to maintaining stability in India’s northeastern region. Both countries have coordinated through intelligence sharing, joint military operations, and diplomatic engagement. In 2019, under Operation Sunrise, where India and Myanmar forces collaborated to dismantle insurgent camps along the border, making it difficult for rebels to use Myanmar as a launchpad for attacks on Indian soil.

Economic and Energy Interests

India and Myanmar’s trade relations are still developing, with bilateral trade valued at approximately $2 billion. India exports pharmaceuticals, agricultural machinery, and consumer goods to Myanmar while importing pulses, beans, and timber. However, an untapped potential exists in sectors like textiles, agro-products, and technology. India aims to enhance trade relations through development projects, investment in Myanmar’s infrastructure, and increasing bilateral economic exchanges.

Myanmar has significant reserves of natural gas, oil, and other resources like timber and precious minerals. India has sought to expand its engagement in Myanmar’s energy sector to secure energy supplies for its growing economy. India’s state-owned companies like ONGC Videsh and GAIL have been involved in oil and gas exploration, production, and transport in Myanmar. Investments in the energy sector help India diversify its energy sources and reduce dependence on Middle Eastern suppliers.

Infrastructural Investments

The India-Myanmar-Thailand Trilateral Highway, a 1,360 km route, connects India’s northeastern states to Thailand via Myanmar, facilitating the easier movement of goods and people. By improving infrastructure and road connectivity, India hopes to promote trade with Southeast Asia, decrease transportation costs, and integrate its northeastern region with the larger Southeast Asian economy.

The Kaladan Multimodal Transit Transport Project seeks to connect India’s landlocked northeastern states to the Bay of Bengal, which have limited access to international markets. The project includes developing the Sittwe port in Myanmar and building roads and inland waterways to link the port to Mizoram. The project is strategically important because it will reduce India's dependence on other transit routes through Bangladesh and the narrow Siliguri corridor.

Strategic Connectivity

Myanmar’s geographical location makes it a vital link between India and Southeast Asia. India’s Act East Policy (formerly Look East Policy) aims to improve economic and strategic ties with Southeast Asia, and Myanmar serves as a land and maritime gateway for these efforts. India is eager to strengthen its relationship with ASEAN, and Myanmar is crucial to that strategy. A peaceful and stable Myanmar can act as a bridge between South Asia and Southeast Asia, facilitating regional cooperation and integration.

India also engages with Myanmar on platforms like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), which connects South and Southeast Asia. Myanmar’s involvement in these regional organisations is essential for India to build stronger ties with ASEAN nations. Strengthening relations with Myanmar allows India to establish better trade routes, security collaborations, and regional partnerships with ASEAN countries.

Geopolitical Considerations

China has invested heavily in Myanmar, particularly in infrastructure, energy, and ports through its Belt and Road Initiative (BRI). India sees China’s growing influence in Myanmar as a geopolitical challenge, particularly given the competition for influence in the Indian subcontinent and Southeast Asia. India’s efforts to build infrastructure, engage in economic diplomacy, and support Myanmar’s development projects are part of a broader strategy to provide an alternative to Chinese investments, thereby balancing Beijing’s dominance.

The military coup in 2021 that overthrew the civilian government of Aung San Suu Kyi put India in a difficult diplomatic position. India has tried to maintain balanced relations with both the military junta and democratic forces, as cutting ties with the military could endanger its strategic and security interests. At the same time, India supports democracy in Myanmar, which aligns with its broader foreign policy principles. India’s pragmatic stance, engaging with all parties while advocating for a peaceful democratic transition, allows it to maintain stability in its bilateral relations.

In international forums, India plays a balancing role in Myanmar. For instance, while many Western nations have imposed sanctions on Myanmar’s military junta following the coup, India has refrained from doing so. While it seeks to promote democracy and human rights, preferring diplomatic engagement over punitive measures, it also recognises that the isolation of the military regime could push Myanmar closer to China. Hence, India has multiple interests in the region and protecting these must require careful consideration of Myanmar’s internal dynamics, the influence of major powers like China, and India’s broader regional ambitions.

III. Current Engagement Scenario

Defense Cooperation

According to data from the Stockholm International Peace Research Institute (SIPRI) on global arms transfer trends, approximately 50% of India’s defence exports between 2017 and 2021 were directed to Myanmar, making it the largest recipient of Indian arms during this period. Sri Lanka followed with 25%, and Armenia accounted for 11% of India's defence exports. Despite this, India remains only the third-largest supplier of arms to Myanmar, accounting for 17% of the total arms supply, behind China at 36% and Russia at 27%.

India has also provided Myanmar with military hardware and equipment to strengthen its armed forces. While this has included chiefly non-lethal equipment, there have been discussions about the possibility of selling advanced weaponry, communication systems, surveillance technology, and patrol vessels. It has also provided it with coastal surveillance radar systems, enhancing its ability to monitor territorial waters.

Indian naval ships regularly visit Myanmar as part of goodwill missions, and Myanmar participates in Indian-led multilateral naval exercises such as the Milan exercises in the Bay of Bengal. These exercises foster cooperation in areas like anti-piracy, disaster response, and humanitarian assistance. Regular patrolling and intelligence sharing between Indian and Myanmar security forces help prevent cross-border infiltration, drug trafficking, and illegal arms smuggling. Additionally, the Indian government has invested in border fencing and surveillance technology, with both sides establishing border outposts.

Further, India provides military training to Myanmar officers at its premier military institutions, such as the National Defence Academy (NDA), Indian Military Academy (IMA), and Defence Services Staff College (DSSC) in Tamil Nadu. This training aims to build professional capacities within the Myanmar armed forces and strengthen military-to-military ties.

Diplomatic Engagement

India and Myanmar have several institutional mechanisms to ensure regular consultations between their governments. Myanmar’s leadership, including both civilian and military representatives, has visited India for diplomatic and security dialogues. For example, Indian Prime Minister Narendra Modi visited Myanmar in 2017, reaffirming India’s commitment to Myanmar’s economic development and security. The most recent visit was made by the Foreign Secretary in 2022.

They have also established joint commissions and working groups to discuss issues like border management, trade, and security. These platforms ensure regular dialogue and help resolve issues diplomatically. India has taken a cautious approach to international criticism of Myanmar, particularly regarding the Rohingya crisis. While India has provided humanitarian aid to Rohingya refugees, it has abstained from harshly criticising Myanmar at the UN.

Economic Ties

Since the signing of the India-Myanmar trade agreement in 1970, bilateral trade has grown steadily. India is Myanmar's fifth-largest trading partner. The bilateral trade stood at US$ 1.03 billion in 2021-22. The growth is, however, not commensurate with the potential. The bilateral trade has risen from US$328 million in 1997-98 to US$2.17 Billion in 2016-17. However, bilateral trade witnessed a decline of 14.15% in 2020-21 over 2019-20 before increasing again in 2021-22 because of increased import of pulses. India’s imports from Myanmar increased by 55%, and India’s exports to Myanmar increased by 45% during 2021-22 over the previous year’s trade figures. 

According to the Ministry of External Affairs, India's development assistance to Myanmar reached a total portfolio of over USD 1.75 billion, with the majority provided as grant-based funding. Additionally, a Line of Credit (LoC) of USD 500 million is available for Myanmar to pursue various developmental projects.

These credits have facilitated several projects, including the establishment of an optical fibre link between Moreh and Mandalay, the rehabilitation of railway infrastructure, and the renovation of the Thanlyin oil refinery. Although these projects have strengthened connectivity and infrastructure within Myanmar, several others remain incomplete or are currently progressing through various stages of implementation.

Recent Developments

India and Myanmar have a unique arrangement along the border called the Free Movement Regime (FMR). Post-independence, the Indian government recognised that the areas along the international border between India and Myanmar form a unified socio-economic zone for the indigenous tribes. The division created by the border had imposed barriers on their traditional livelihoods and way of life. To address this, the government allowed tribal communities residing near the border to cross freely up to 16 km across either side without requiring visas, passports, or other travel documents. While the FMR helped the tribes maintain their age-old ties, unfortunately, its provisions were exploited by Indian insurgent groups. It was temporarily suspended during the pandemic due to increased cross-border insurgent activity and drug smuggling. But, earlier this year, the Indian government made the decision to scrap the FMR completely.

IV.  Challenges

Fragile Political Environment

Myanmar’s internal political divisions between the military, ethnic armed groups, and civilian government complicate India’s engagement. India must maintain diplomatic relations with a politically fragmented state, which can hinder the execution of long-term strategic projects and agreements. Myanmar’s stalled peace process with ethnic armed groups and internal conflicts remain a challenge in building a constructive relationship with the central government and local population.

Security and Border Management

Insurgent groups like the National Socialist Council of Nagaland (NSCN), the United Liberation Front of Assam (ULFA), and other separatist factions have historically used Myanmar’s border regions as safe havens. However, Myanmar’s military has limited control over several regions along the India-Myanmar border, particularly those dominated by ethnic armed groups. This undermines India’s ability to secure its borders and conduct effective counter-insurgency operations.

Myanmar’s internal conflicts, particularly those involving ethnic armed groups like the Kachin Independence Army (KIA), Shan State Army (SSA), and Arakan Army, have also created problems. These groups often operate in regions critical to India’s connectivity projects, and their opposition to the central government poses security risks for Indian investments.

Further, the porous nature of the India-Myanmar border allows for the trafficking of drugs, arms, and contraband. The Golden Triangle region, where Myanmar, Laos, and Thailand meet, is one of the world’s largest opium-producing areas, contributing to drug trafficking into India’s northeastern states. India’s challenge is to enhance border security while collaborating with Myanmar’s security forces, which are often overstretched or ineffective due to internal conflicts.

Chinese Influence

China has heavily invested in Myanmar through its Belt and Road Initiative (BRI), building infrastructure such as the China-Myanmar Economic Corridor (CMEC), ports, highways, and energy pipelines. Myanmar’s increasing economic dependence on China challenges India’s regional influence. For example, China is reportedly constructing a military listening post on Great Coco Island, located between the Bay of Bengal and the Andaman Sea, just 210 kilometres from Andaman and Nicobar Islands. This development highlights India's growing concerns over Myanmar moving closer to China, particularly as U.S.-led sanctions have pushed Myanmar further into China's strategic sphere of influence.

Economic and Infrastructural Challenges

Economic ties between India and Myanmar remain severely constrained. Data from the Exim Bank of India shows that the most recent Line of Credit to Myanmar was extended in 2014-15, with the amount notably reduced compared to previous commitments. As of  2022, India is still only the 11th largest investor in Myanmar, with approved investments totalling USD 773.038 million from 34 Indian enterprises. 

Further, there has been considerable delay and inefficiency in India’s execution of its infrastructure projects. Despite being a critical link between India and Myanmar, the Kaladan project has faced significant delays due to difficult terrain, funding issues, and local opposition. Slow implementation of such projects hampers India’s efforts to enhance connectivity with Myanmar and beyond into Southeast Asia. The India-Myanmar-Thailand Trilateral Highway has also been delayed due to political instability in Myanmar and coordination challenges. This has weakened India’s credibility as a reliable partner in regional connectivity.

Human Rights Concerns

India’s position on the Rohingya refugee crisis has been a point of contention. While India has provided humanitarian assistance to Bangladesh and Myanmar, it has refrained from taking a firm stance against Myanmar’s military over alleged atrocities committed against the Rohingya population. This cautious approach has led India to face domestic and international criticism, particularly from human rights organisations. States like Mizoram have seen an influx of refugees from Myanmar due to internal conflicts. Thus, managing refugee flows, ensuring humanitarian assistance, and addressing local concerns about refugees further complicate ties.

V.  Recommendations

• Broaden Defense Cooperation
  India must continue and enhance its defence cooperation with Myanmar, maintaining a pragmatic approach to safeguard its northeastern border security and regional stability. A stable and cooperative Myanmar is essential for curbing insurgency movements in India’s northeastern states. It must strengthen border security infrastructure and patrols, particularly in areas where Myanmar’s military has limited control, to prevent arms smuggling, drug trafficking, and militant infiltration. Hence, India must expand joint military operations and deepen intelligence-sharing mechanisms to ensure effective counterinsurgency efforts. It must also be willing to engage with both the democratic and military leadership in the case of a possible power transition in the future.
  

• Recalibrate Approach to Rohingya Crisis
  India’s current approach to the Rohingya crisis is characterised by limited humanitarian support. This has drawn criticism from human rights organisations and strained its relations with neighbouring Bangladesh, which hosts a significant portion of the displaced Rohingya population. India must adopt a more proactive stance, prioritising humanitarian assistance. It can do so by taking a more active role in mediating between Myanmar and Bangladesh, promoting the safe and voluntary repatriation of Rohingya refugees while advocating for inclusive governance and protection of minority rights in Myanmar.
  

• Counter China, Not Compete
  China has substantial political and economic leverage in Myanmar. A growing dependence on Chinese capital risks tilting Myanmar further away from India. India must actively position itself as a viable alternative to China by increasing its investment in Myanmar’s infrastructure and development projects, offering sustainable and inclusive growth options that align with Myanmar’s long-term interests. It can do so by, firstly, accelerating infrastructure projects and prioritising the completion of delayed ones. Secondly, it can provide technical expertise and capacity-building support that will appeal to Myanmar’s broader development needs, in contrast to China’s often extractive investments. It can also differentiate its approach from that of China by emphasising community-focused development models, particularly in sectors such as agriculture and education. Hence, India must offer itself as an alternative provider of development aid and investment to promote its partnership with Myanmar.