Ramesh: Shop talk

New Delhi, June 11: With India-Myanmar trade running into a currency barrier, the commerce ministry has decided to take up the issue with its finance counterpart and the Reserve Bank to find a way out of the impasse.

Trade at Moreh on the Manipur-Myanmar border is reported to be hampered as there are major difficulties in operationalising letters of credit.

Senior Manipur officials have informed Jairam Ramesh, the minister of state for commerce, that due to the difference in the official and unofficial rate of exchange of Myanmar’s currency (Kyat) vis-a-vis the dollar, the system of letter of credit could not be made operational.

Although the RBI has issued guidelines permitting business trade transactions in any freely convertible currency, the US has imposed sanctions against Myanmar towards settlement in dollars.

The commerce ministry will now take up the issue with the finance ministry and the RBI to introduce a rupee-kyat payment mechanism to prevent artificial fixation of a higher value of Myanmar currency.

India is eager to develop trade relations with Myanmar, as it is also a strategically important country that has agreed to provide the Northeastern states with open access to a seaport.

India is investing $103 million to develop the Sitwe port in Myanmar.

Ramesh told The Telegraph that Mizoram would emerge as the hub in the Northeast as it would be linked to Sitwe.

Public sector RITES is carrying out a detailed feasibility report on the project and work is expected to start in two to three months.

Ramesh said this link would reduce the Northeastern states’ dependence on Bangladesh to export their goods through a seaport.

He said Sitwe was located opposite Vizag on the Myanmar coast and the container terminal would be set up at the port. This port would provide the Northeast with a link to the markets of the Asean countries.

Mizoram has no access to Bangladesh, and this project will be immensely beneficial for the state. The other Northeastern states could also use this route and not be totally dependent on Bangladesh, a country that is difficult to deal with.

He said the project was being undertaken in close co-ordination between the external affairs ministry, the commerce ministry and the home ministry.