Trade and Connectivity in the BIMSTEC Region: Questions of ‘Incremental Benefits’ for the Member Countries

Political Economy of Trade in BIMSTEC: A Contemporary Perspective

“…In most cases, countries are either sources of raw materials, intermediate products and capital machineries or they are used as destinations for exporting finished products. Overall, the existing structure of trade is not conducive to develop value chains in the BIMSTEC countries (Moazzem, 2021). Moreover, as discussed, the China factor looms large in the import structure of trade of BIMSTEC countries.…”

“…The latter was linked to the political tensions in the Himalayas, which prompted India to deliberately reduce its imports from China. Moazeem (2021) has pointed out the limited potential to develop strong regional value chains among the BIMSTEC countries. He indicates that the pattern of bilateral trade reveals that member states use more than one country as sources for their major exports.…”

“…The data analysis in this article also indicates the same. Moazeem (2021) also argues that the variation in trade between BIMSTEC member countries is overwhelmingly influenced by trade routes, logistic facilities, and time and cost to trade. While having trade agreements with BIMSTEC, India's top five trading partners are none of the BIMSTEC countries (the top five export partners in 2019, were the United States, 4,452,043 3,813,120 4,753,967 6,434,957 5,500,138 4,117,743 4,414,649 4,677,951 4,226,735 3,224 5,055,564 5,499,272 5,475,443 5,680,938 5,653,575 5,316,104 6,453,481 7,671,888 7,034,310 5,223,762 −25.74 India's exports to Thailand 2,767,920 3,454,127 4,203,813 3,438,522 3,105,635 2,962,016 3,589,635 4,395,264 4,331,649 3,777 United Arab Emirates, China, Hongkong and Singapore; the top 5 import partners in 2019 were China, the United States, United Arab Emirates, Saudi Arabia and Iraq).…”

“…This index is lower than 1, which indicates that trade within BIMSTEC would not be regarded as highly intense. 2 In terms of export and import, the two major economies are Thailand and India, while in terms of import, the three major economies are Bangladesh, Sri Lanka and Myanmar (Moazzem, 2021). Interestingly however, their export destinations are primarily in North America and Europe, and not in the region.…”