Myanmar Commerce Minister, Aung Naing Oo, expressed hope on Monday that negotiations for the Indian rupee – Myanmar kyat payment system for trade settlement would be finalised by the end of June, paving the way for enhanced bilateral trade between the two countries.
Speaking at a session organised by EEPC India, the minister said that the Myanmar Central Bank and India’s central bank had mutually agreed to the concept paper on the rupee-kyat payment system in principle, the terms of reference and the standard operating procedures (SOP) had been negotiated to be in line with the foreign exchange policies of both countries.
After concluding of negotiation between the two central banks, the rupee and kyat direct payment can be started, the minister said. “I do hope that if everything goes well all the negotiations will be finalised by the end of this month."
The trade between the two countries would at least double once the trade arrangement was in place, Oo said.
Myanmar already has similar trading arrangements with China and Thailand. Since 2021, Myanmar faced US sanctions, which made it difficult to settle payment transactions with other countries in dollar, Oo said.
To facilitate the rupee trade arrangement, RBI had chosen Punjab National Bank as the designated bank to open Rupee Vostro Account. PNB has approached two banks in Myanmar for opening of the Special Indian Rupee Vostro Account.
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P K Shah, Chairman of the Committee on Foreign Trade Policy & WTO and Past Chairman, EEPC India, said that the total merchandise trade between India and Myanmar had reached $1.76 billion in 2022-23 due to rising imports from Myanmar.
“India’s exports to Myanmar however witnessed a decline in both merchandise as well as engineering in the last few years,” he noted.
However, Shah said bilateral trade between India and Myanmar could rise significantly once the rupee trade settlement mechanism was established.
On the Sittwe port in Myanmar, Minister Oo, said that it would be dedicated for trade with this part of the country once commercial operations start. “That is the vision.”
The port built under a grant assistance from the government of India as part of Kaladan Multimodal Transit Transport Project was operationalised last month.
India ranks 11th in Myanmar investment inflow with an amount $775 million which is 0.84 per cent of total foreign investment in Myanmar.
Adani Myanmar port sale
Early May, Adani Ports and Special Economic Zone (APSEZ) had said that it had concluded the Myanmar Port sale for a consideration $30 million. The exit was in line with the guidance provided by the APSEZ board based on the recommendations made by the Risk Committee in October 2021, the company mentioned then.
Asked about it, Myanmar Commerce Minister, U Aung Naing Oo, said, Adani was a “very” strategic investor for Myanmar. “Hopefully, we will find some solution for them.”
