Energizing BIMSTEC through Indian Leadership: Opportunities, Challenges, and the Way Forward.
The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
Abstract
This policy brief, Energizing BIMSTEC through Indian Leadership: Opportunities, Challenges, and the Way Forward, explores India’s critical role in revitalizing the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). As South Asia navigates rising geopolitical tensions, including China’s expanding influence through the Belt and Road Initiative (BRI), BIMSTEC’s strategic importance has grown. However, BIMSTEC faces structural and financial limitations, hindering its progress toward meaningful regional integration. India, as a key contributor, seeks to leverage its Neighborhood Policy and Act East Policy to enhance BIMSTEC’s relevance and counterbalance external influences. Proposed reforms include streamlining goals, strengthening financial support, and fostering collaborations with other regional bodies like ASEAN. With consistent leadership and commitment from member states, BIMSTEC has the potential to drive sustainable growth, regional stability, and collective security in South Asia. This brief highlights pathways for India and BIMSTEC to create a resilient regional future.
Introduction
The global order is changing day by day. Shift in economic power, technological advancements, geopolitical tensions are creating a more complex and dynamic global landscape, requiring adaptation and new strategies from countries and international organizations. Globalization results in advances in communication and transportation technologies and these have facilitated to the increase of global connectivity. Every country seeks to have cordial relations with its neighbors, if not, sustaining in this era where nations are continuously trying to maximize its power is impossible.
India's Strategic Role in BIMSTEC
India, today, is one of the key-players in the global arena. India shares its land borders with China, Bhutan, Nepal, Pakistan, Bangladesh, and Myanmar. India has never had very cordial relations with Pakistan and China. The relationship between India and China has been complex and often strained over the past decades. China’s emergence as a major global power has put India and countries like the USA, Japan and other European countries concerned of its rise.
China’s economic and political footprints has expanded so quickly that many countries have struggled to grapple with the implications. China is helping to construct mega infrastructure projects in every country in the region.
Challenges from Competing Regional Powers
Through the process of providing loans and investments to countries, especially in the context of its Belt and Road Initiatives (BRI) to developing countries, which is also commonly referred as the China’s debt trap diplomacy led to difficulty on the countries to pay their debt. China’s loans to Sri Lanka were at $4.6 billion in 2020 and the overall figure for Maldives is believed to be between $1.1 billion and $1.4 billion. Between 2018 and 2021, China’s annual development aid and loans to Bangladesh surged from $994 million to $3.4 billion, making it Dhaka’s largest development partner.
To tackle China’s influence over the region, India’s Neighbourhood Policy is a key component to strengthen ties and enhance cooperation with its immediate neighbouring countries. It was conceived in 2008 to bolster relations with Afghanistan, Bangladesh, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. This policy focuses at enhancing physical, digital, and people-to-people connectivity across the region. The Act East Policy, the Think West Policies, the Connect Central Asia Policy, and the Sagar Policy are the major policies that comes under its domain.
Over the years, India has struggled to forge strong neighbourhood relations despite its geographical proximity and historical, religious, economic, ethnic, and cultural linkages with neighbouring states. India’s interference in the domestic affairs of countries like Nepal and unresolved border issues have created major challenges to its Neighbourhood Policy. India’s reducing aid and loans to neighbours like Maldives, Bhutan, Sri Lanka, Afghanistan, and Bangladesh has affected India’s diplomatic engagements.
Even though South Asian Association for Regional Cooperation (SAARC) has provided India with a platform to interact with its neighbouring countries, but it has not been very effective. S.D. Muni identifies five major problems in India’s approach towards neighbourhood- the lack of a balanced political perspective, the power differentials, India’s economic clout, extra-regional powers and mindsets, diplomatic styles and personalities.
At an online webinar held by Danish think tank, Scott Lucas, an expert has clearly pointed out how India’s recent focus on military measures than social elements has increased tensions across the region, increasing anti-India sentiments. The major consequence of this is the rise of China across South Asia. China benefits from increasing anti-India sentiments and solidify its connections with other nations at India’s expense. Many of these countries expressed concern about India’s Big Brother attitude.
The South Asian region is a hotbed of Sino-Indian strategic competition for years. India as a member of SAARC plays a crucial role and have good relations with its members except for Pakistan which sometimes narrows the broader prospects of the organization. India and ASEAN members too share a great deal of strategic cooperation. Along with economic growth, cultural and social links, regional stability these two platforms provide India to counter China’s influence in the region and ensure stability in the Indo-Pacific. ASEAN and SAARC are central to India’s Act East Policy.
One of the significant regional organizations is the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC). It was established in June 1997, with the signing of Bangkok declaration, initially known as BIST-EC (Bangladesh-India-Sri Lanka-Thailand economic cooperation), today it is known as BIMSTEC and comprises of seven member states with the admission of Myanmar, Bhutan, and Nepal, respectively. BIMSTEC now has seven South Asian and South-East Asian nations. The Bay of Bengal region was one of the world’s most integrated regions until the early 20th century when members of the region became independent from and started pursuing its own interest and separate goals. The aim of this regional grouping was not to create a new region for cooperation but to revive the connectivity and share common interests. What makes BIMSTEC different from SAARC and ASEAN is that it is a sector-driven organization. Cooperation within BIMSTEC had initially focused on six sectors in 1997- trade, technology, energy, transport, tourism, and fisheries and expanded in 2008 to incorporate agriculture, public health, poverty alleviation, counterterrorism, environment, culture, people-to-people contact, and climate change. Subsequently, following steps to rationalize and reorganize sectors and sub-sectors, cooperation was reorganized in 2021 under the following sectors and sub-sectors led by the respective Member States.
Bangladesh leads in trade, investment and development (sub sector-blue economy); Bhutan leads in environment and climate change (sub sector- mountain economy); India leads in security (sub sectors- counter terrorism and transnational crime, disaster management, energy); Myanmar leads in agriculture and food (subsectors- agriculture, fisheries and livestock); Nepal leads in people-to-people contact( sub sectors- culture, tourism, poverty alleviation, people-to-people contact); Sri Lanka leads in science, technology and innovation(sub sectors- technology, health and human resource development); and Thailand leads in connectivity.
BIMSTEC region hosts 22% of world’s population and the member states have a combined GDP of USD $3.8 trillion per year. This organization is extremely important for India because it aligns with India’s Act East Policy. BIMSTEC is very essential for India’s larger goal to gain trade and security prominence in the Indian Ocean and to cater the concept of Indo-Pacific. BIMSTEC provides India to be a prominent leader in the region which will help it to maintain peace and security. China’s over the year plans of entering the Indian Ocean region can be challenged by India. China’s BRI has projects in all BIMSTEC members except for India and Bhutan. So, in a way this would provide India with the opportunity to lead and counter China. In this context, BIMSTEC emerged as an alternative platform. India also made efforts to enhance the pace of BIMSTEC’s progress in recent years. The BIMSTEC Energy Centre was set up in Bengaluru, along with the BIMSTEC Business Council, a forum for business organizations to promote regional trade. It aims to create free-trade and power grid interconnectivity agreements, and a masterplan for transport connectivity in the Bay of Bengal region. And lastly, BIMSTEC is important owing to the land and maritime trade potential of the member countries.
India has provided strong leadership and support to BIMSTEC. India is the largest contributor to the BIMSTEC Secretariat’s budget, recently providing an additional $1 million to strengthen the Secretariat’s capacity. Beyond the Operational budget, member countries also contribute through funding specific regional projects and initiatives under BIMSTEC’s sectoral cooperation areas. To facilitate financing of the BIMSTEC projects, a regional BIMSTEC Development Fund, with capital contributions from the member states has been formed. However, the specific contributions of the member states are not publicly available to analyze other members’ financial contribution to the organization.
The BIMSTEC members - Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka, and Thailand - have actively participated in BIMSTEC meetings and initiatives, contributing to the organization's agenda and priorities. In terms of research and knowledge sharing, an analysis found that India, Bangladesh, and Sri Lanka have been the top contributors of open access journals to the Directory of Open Access Journals (DOAJ) among BIMSTEC countries.
Some of the major agreements/projects undertaken by BIMSTEC are-
BIMSTEC Free Trade Area Framework- this has been signed by all the members to stimulate trade and investment and attract outside traders as well. The BIMSTEC Coastal Shipping Agreement draft was discussed on 1st December 2017, in New Delhi, to facilitate coastal shipping within 20 nautical miles of coastline in the region to boost trade between the member countries. Once this agreement becomes operational, a lot of cargo movement can be done through the cost effective, environment friendly and faster coastal shipping routes.
BIMSTEC Connectivity Project: The BIMSTEC Master Plan from Transport Connectivity-
a). The Kaladana Multimodal projects that link India and Myanmar aims to create a multimode of transport for shipment of cargo from the Eastern ports of Myanmar as well as to the North-Eastern part of India through Myanmar. The KMMTT is hailed as the future gateway to South-East Asia. Even though the construction began in 2010 but because of inadequate funds and poor planning this project is delayed.
b). Asian Trilateral Highway with the 1360 kms long India-Myanmar- Thailand highway is an initiative pertaining to India, Myanmar, and Thailand. India is working on the India-Myanmar-Thailand trilateral highway which will connect India’s North-Eastern regions with Association of South East Asian Nations (ASEAN) countries, with plans to extend it further to Cambodia, Laos and Vietnam. However, India lacks the finance to match China’s massive BRI investments. This highway will boost trade and commerce in the ASEAN-India free trade area and with the rest of South-East Asia.
c). The Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement was signed in June 2015, to enable movement of passenger and cargo vehicles across borders among four counties. This aims at providing seamless people-to-people contact and enhance economic interaction by facilitating cross border movement.
3. The 2nd BIMSTEC Disaster Management Exercise (BIMSTEC-DMEx), 2020, is a three day exercise that discussed standardization of protocol, formulation of policy and guidelines for protection of heritage sites during disasters and their conservation post-disasters.
4. Tourism- BIMSTEC Tourism Information Centre was established in July 2007, in Delhi to create a Network of Tour Operators among the BIMSTEC Member States to promote tourism in the region including the Buddhist Tourist Circuit and luxury cruise. India hosted the First Meeting of this network on 7 July 2017, in New Delhi where it was decided to work on common marketing strategies, creation of the brand BIMSTEC for tourism; creation of BIMSTEC specific products and many more.
5. The Milex-18 is BIMSTEC’s first ever joint military exercise in Pune, India in 2018, to enhance security cooperation among the member states.
However, BIMSTEC has not been very successful in pursuing its goals and objectives and have failed to retain its relevancy. The BIMSTEC Charter established that the leaders of the member states will meet once every two years but the last 27 years, only five summits have been held till yet. This is mainly because the member states neglect BIMSTEC. India is using it mainly when SAARC fails to work while other member states like Thailand and Myanmar are more focused on ASEAN. There have also been numerous internal and bilateral conflicts between member states.
Another reason for its failure is that it has tried to focus on all the broad areas making it incompetent enough to fulfill its aims and goals. The organization should instead remain committed to a few key focus areas and cooperate in them efficiently.
Structural and Financial Hurdles Facing BIMSTEC
Despite signing a framework free trade agreement in 2004, BIMSTEC has only little progress, with only two of the seven constituent agreements in place. Additionally, BIMSTEC’s organizational structure lacks the robustness and efficiency needed to drive regional cooperation.
Limited financial resources can be identified as one of the major reasons for its failure. Funding has always been a major issue for BIMSTEC. The contributions made by member states is inconsistent and insufficient. Even though India is the largest contributor, but it is never enough for an organization like BIMSTEC to run. Unlike China, India does not have big pockets, making it unable to stop China’s growing influence over the region.
This is high time to energize BIMSTEC and make it relevant to attain all its set objectives and goals.
The first step is to streamline trade facilitation by simplifying custom procedures and ensuring transparency in laws, regulations and implementing digitalization in trade procedures.
A BIMSTEC Railway Agreement should be negotiated.
Addressing the bilateral issues between member nations is one of the particularly important steps to be taken to energize BIMSTEC.
Leveraging external partnerships with other regional organizations like the SAARC, ASEAN and IORA can enhance BIMSTEC’s effectiveness.
More necessarily a leadership commitment is crucial for the success of any regional organization. Regular summits and high-level meetings can maintain momentum and ensure continuous political support.
However, initiatives for revitalizing BIMSTEC have been forwarded by member states. In a special briefing by India’s Foreign Secretary on State visit of Bangladesh’s PM Sheikh Hasina on the 21st and 22nd June, 2024, delivered a press conference about the both States’ willingness to strengthen regional and sub-regional cooperation through BIMSTEC.
Indian External Affairs Minister, Dr. S.Jaishankar hosted the 2nd BIMSTEC Foreign Ministers’ retreat where the ministers discussed regional challenges including the situation in Myanmar and emphasized the need to find solutions within the grouping. They discussed on advancing connectivity projects, border stability, and humanitarian assistance, as well as cooperating to counter transnational crimes like cybercrime, narcotics, and illegal arms trade.
India has hosted the first ever BIMSTEC aquatic championship in February 2024. This announcement to host the first-of-its-kind BIMSTEC sports was made by the Indian PM in the 2018 summit. This event was organized to promote regional cooperation and in a way to make people aware of the organization and its importance. This initiative could also be seen as successful because member states connected well though the championship which certainly would have broken the ice between the members having tensions.
Future Pathways: Enhancing BIMSTEC’s Relevance
Taking all factors into account, it can be analyzed that though BIMSTEC has lost its importance and relevance due to certain reasons, but the member states have also come together to restore the position of the organization. With numerous development projects undertaken, BIMSTEC has been trying to cope up with the regional and global challenges and fostering cooperation among the member states. In case of funding, BIMSTEC could explore opportunities from private players and international financial institutions like the World Bank, Asian Development Bank (ADB), etc. It can also utilize IMF programs and instruments to access funding and policy support. Social Media campaigns, high media outreach, educational institutions, public event, and conferences, etc., are several ways to raise awareness about BIMSTEC among the common masses. Only with continuous efforts and engagement on the part of the member states would bring live to BIMSTEC again.