Special 
Much has changed since the General Elections in India. The Bharatiya Janata Party-led National Democratic Alliance (NDA) is back in power, aided by coalition partners. But there may be continuity in some areas, especially in foreign policy and trade.
That continuity will perhaps be on display in September in Bangkok, at the seven-nation Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) group’s summit.
If India’s leadership of the G20, culminating in the grand Summit in New Delhi in 2023, was a declaration of the country’s emergence as a force to be reckoned with on the global stage, the summit in September will also be a declaration, this one about the country’s desire to strengthen relationships in its neighbourhood and on its eastern coast.
“ BIMSTEC is poised to play an important role in enhancing regional co-operation in South Asia and Southeast Asia. Moreover, for the first time at the summit this year, BIMSTEC leaders will adopt a vision document, ”
Amb. Indra Mani Pandey
Senior Diplomat, Security General
BIMSTEC
Established in 1997, BIMSTEC initially comprised four countries—Bangladesh, India, Sri Lanka, and Thailand—under the name BIST-EC. Myanmar joined in December that year, and the grouping became BIMST-EC. Then, in 2004, Nepal and Bhutan were welcomed as full members, and the bloc was renamed BIMSTEC. Since 2014, it has had a permanent secretariat in Dhaka to anchor its activities.
Consider its potential: The seven nations have a combined population of 1.8 billion, or about 22% of the global population—that’s larger than the combined population of the Association of Southeast Asian Nations (Asean) at 679.69 million and the European Union at 448.4 million. But it has a long way to go in terms of GDP; the combined GDP of the BIMSTEC countries was $4.5 trillion as of 2022, which was about 4.4% of world GDP, per World Bank data. The states had a combined external trade of $1.95 trillion, or about 6% of world trade, per UNCTAD.
“ BIMSTEC aims to have a broader geographical reach than Saarc, connecting South Asia with Southeast Asia, thus evolving into an interregional organisation ”
RUMKI MAJUMDAR
Economist
Deloitte India
Nevertheless, the importance of this bloc has increased over the years, and more so now with an Indian diplomat occupying the position of Secretary General. In January, Ambassador Indra Mani Pandey took over as the fourth Secretary General of BIMSTEC, a position he will hold for three years.
BIMSTEC’s leadership rotates among member states, and each member state has been given the responsibility to take the lead in a sector. Besides, members have achieved notable progress in areas like trade liberalisation, simplifying customs procedures, and harmonising standards. Technical co-operation programmes have been implemented in areas like agriculture, counter-terrorism, and disaster management. It has also made strides on the cultural front, as was evident with the recent BIMSTEC Aquatic Championship held in February 2024 that India won.
“BIMSTEC is poised to play an important role in enhancing regional co-operation in South Asia and Southeast Asia. Moreover, for the first time at the summit this year, BIMSTEC leaders will adopt a vision document,” Pandey tells BT.
“ Given that Saarc is practically defunct, and China spreading its influence through the Belt and Road Initiative, BIMSTEC’s importance for India is growing exponentially ”
AGNESHWAR SEN
Associate Partner
Trade And Indirect-Tax Policy Advisory
EY
Interest in BIMSTEC has risen as the importance of the South Asian Association for Regional Cooperation (Saarc) has waned. Some members are common to both blocs—India, Sri Lanka, Bangladesh, Nepal, and Bhutan—but it is the exceptions—Pakistan, Afghanistan, and the Maldives—that indicate the reasons for the shift.
The first big setback in recent years for Saarc was the 2016 terror attack at an Indian army camp in Uri, Kashmir. India pulled out of the planned summit in Pakistan. In fact, the last Saarc summit was held in Kathmandu, Nepal, in 2014.
But there are other reasons for the waning interest, one of which is the requirement of unanimous agreement on major decisions, a requirement that becomes all the more onerous amid tensions between countries.
Agneshwar Sen, Associate Partner, Trade and Indirect-tax Policy Advisory, EY, says, “The political realities of South Asia do not provide any hope for a quick revival in the fortunes of Saarc. Therefore, yes, withering away from Saarc as the primary instrument for greater regional co-operation and development has created the opening for BIMSTEC.”
Sen says BIMSTEC also becomes important in light of China’s increasing influence in the region through its Belt and Road Initiative (BRI) and growing political tensions. “BIMSTEC’s importance for India’s neighbourhood policy is growing exponentially. India being the largest economy in this grouping, its leadership is critical to its success,” adds Sen.
But similarities apart, there are also significant differences between BIMSTEC and Saarc. Rumki Majumdar, Economist at Deloitte India, says, “BIMSTEC aims to have a broader geographical reach than Saarc, connecting South Asia with Southeast Asia, thus evolving into an interregional organisation fostering investments and trade relations. This initiative aligns with India’s ‘Act East’ policy.” The members have also made a concerted effort to steer clear of contentious issues and have adopted a pragmatic approach, prioritising economic and technical co-operation over politics. They have agreed on a charter, which came into force on May 20, that allows them to partner with the UN and international organisations.
At the last summit in Colombo in March 2022, seven sectors of co-operation were delineated. These are trade, investment, and development, including the blue economy, led by Bangladesh; environment and climate change, including the mountain economy, led by Bhutan; security, including energy and disaster management, led by India; agriculture and food security, including livestock, led by Myanmar; people-to-people contact, led by Nepal; science, technology, and innovation, including health and human resource development, led by Sri Lanka; and connectivity, led by Thailand.
These broad sectors cover all the important dimensions of the developmental and security challenges that the region is facing. BIMSTEC Secretary General Pandey says, “An eminent persons group has been tasked with aligning BIMSTEC’s agenda for regional co-operation with the sustainable development goals. The report will enable BIMSTEC to reform and repurpose itself and engage in new areas.”
“ Increased crossborder trade in the Bay of Bengal region, facilitated by India’s policies, would benefit from
enhanced payment system integration/fungibility ”
VISHNU. P. SUDARSAN
Partner
JSA Advocates & Solicitors
Additionally, BIMSTEC member states have adopted the Master Plan for Transport Connectivity. It’s a comprehensive 10-year strategy (2018-2028) and action plan, supported by the Asian Development Bank (ADB), for improving transport linkages. They are now considering ways to finance the plan. “An Agreement on Maritime Transport Cooperation has already been negotiated and approved by the BIMSTEC foreign ministers and is likely to be signed at the next summit. In order to facilitate road travel across the region, a motor vehicle agreement is being negotiated, and we are hopeful of making progress,” says Pandey.
The maritime transport agreement has the potential to significantly contribute to the economic development of the Bay of Bengal region, says Sen of EY. “However, its successful implementation will depend on the commitment of member states to fulfil their obligations and work together to overcome challenges,” he adds.
BIMSTEC also has immense potential for strengthening the blue economy. It can promote responsible fishing practices, foster maritime co-operation for security and safety at sea, and facilitate the development of ocean-based industries.
Vishnu P. Sudarsan, Partner at JSA Advocates & Solicitors, says there are opportunities aplenty in the region, one of them being offshore wind energy. “With offshore wind potential in the Bay of Bengal running into several hundred gigawatts, joint development projects underpinned by grid connectivity would allow for the deployment of efficient and large-scale wind farms,” he says. Besides, India can take the lead in facilitating cross-border trade, he says, especially with enhanced payment system integration. “To this end, regulatory gaps, impediments, and non-tariff barriers should be effectively addressed,” he adds.
But first, there are challenges it must overcome. Infrastructure gaps between member states are crucial, as they can hinder trade. It must also ensure an equitable distribution of benefits from the bloc’s initiatives.
A framework for a comprehensive Free Trade Agreement (FTA) was signed in 2004, but negotiations have been slow. A trade facilitation agreement is still being worked out, while a draft for customs co-operation is nearing completion. Surendar Singh, Associate Professor of International Business Area at the FORE School of Management, says, “India has the potential to make BIMSTEC a successful regional trading bloc, but it needs to put more political capital into resolving its bilateral issues with other [member] countries, particularly Bangladesh and Sri Lanka.”
One reason for the slow progress on the FTAs could perhaps lie in the conception of BIMSTEC, EY’s Sen explains. It was initially seen as an instrument to promote regional co-operation in areas such as trade, investment, technology, and tourism. “The framework for an FTA came later in 2004, but since India was already engaged with the BIMSTEC members in other FTAs, I feel this initiative was never followed up seriously,” he adds. Besides, the emergence of other sub-regional initiatives like BCIM (Bangladesh-China-India-Myanmar Forum) can raise doubts about BIMSTEC’s relevance.
“As a stable secular pluralistic democracy with a history of non-aggression and level-headed foreign policy and international engagement, India is ready to lead BIMSTEC,” says Sudarsan of JSA. And given India’s sustained economic growth and its history of co-operation with neighbours, it is well positioned to make BIMSTEC a success, he adds.
“ India and Thailand could serve as anchors to the Bay of Bengal region to boost regional connectivity, trade
and security co-operation ”
SURENDAR SINGH
Associate Professor
Fore School of Management
Beyond its immediate vicinity, BIMSTEC also assumes importance in realising the goals of security and development in the Indo-Pacific Oceans Region (IPOR), which also includes other countries in South Asia and Southeast Asia, and those in West Asia, Pacific Ocean countries, and the eastern rim of Africa.
Singh says India and Thailand could serve as anchors in this region. “Integration of BIMSTEC into the larger Indo-Pacific framework will certainly enhance regional economic integration and contribute to growth and development. Moreover, BIMSTEC’s focus on non-traditional security threats like climate change, natural disasters, and transnational crime aligns with the priorities of Indo-Pacific countries.”
Therefore, it makes sense that the leading countries in the IPOR and multilateral organisations include BIMSTEC in their policies and programmes. “BIMSTEC provides a vital regional platform to pursue co-operation in various domains, and it is poised to play a much bigger role in the future than it did in the past,” says Pandey.
Sen adds that by leveraging BIMSTEC, countries and organisations can work together to address shared challenges and capitalise on opportunities. “However, for that to happen, the grouping has to become more cohesive. Not just an FTA with common infrastructure, but a greater degree of social and economic integration will be a prerequisite.”
Over now to the summit in September.
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