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The India-Myanmar-Thailand Trilateral Highway and Its Possible Eastward Extension to Lao PDR, Cambodia, and Viet Nam: Challenges and Opportunities-Background Papers

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The India-Myanmar-Thailand Trilateral Highway and Its Possible Eastward Extension to Lao PDR, Cambodia, and Viet Nam: Challenges and Opportunities-Background Papers ERIA RESEARCH PROJECT REPORT 2020 NO. 02b The India–Myanmar–Thailand Trilateral Highway and Its Possible Eastward Extension to Lao PDR, Cambodia, and Viet Nam: Challenges and Opportunities Background Papers Economic Research Institute for ASEAN and East Asia ERIA Research Project Report 2020, No.02b Background Papers Economic Research Institute for ASEAN and East Asia The India-Myanmar-Thailand Trilateral Highway and Its Possible Eastward Extension to Lao PDR, Cambodia, and Viet Nam: Challenges and Opportunities-Background Papers Economic Research Institute for ASEAN and East Asia (ERIA) Sentral Senayan II 6th Floor Jalan Asia Afrika no.8, Gelora Bung Karno Senayan, Jakarta Pusat 1270 Indonesia ©Economic Research Institute for ASEAN and East Asia, 2020 ERIA Research Project Report FY2020 NO. 02b Published in June 2020 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means electronic or mechanical without prior written notice to and permission from ERIA. This study is based on the material obtained from the country papers and background papers in the part two of the study. The responsibility for accuracy and veracity of data and information lies with the author(s) of country papers and background papers. The views, thoughts, and opinions expressed by author(s) of country papers and background papers belong solely to the author(s), and in no way represent the views of the Economic Research Institute for ASEAN and East Asia, ERIA’s Governing Board, and ERIA’s member countries governments. Maps shown in the study are not to scale. All maps shown in this study are only for demonstrative and study purpose. The shape and boundaries and borders of countries/states shown here do not represent the actual size and shape of countries/states, and the actual size, shape and borders of domestic, national and international boundaries of country/countries shown in the figures/tables/charts and titles. Material in this publication may be freely quoted or reprinted with proper acknowledgement Table of Contents List of Contributors iv List of Abbreviations v Background Papers Trilateral Highway and Northeast India: Economic Linkages, B1-1 Challenges and Way Forward Trilateral Highway Study: Myanmar Country Report B2-1 Developing the Trilateral Highway: A Thai Perspective B3-1 Trilateral Highway Study: Perspectives from Viet Nam B4-1 A Geographical Simulation Analysis of the Impacts of the Trilateral B5-1 Highway and Its Eastward Extensions Rules on Cross-Border Movements of Vehicles for the Trilateral B6-1 Highway iii List of Contributors Project Leader: Fukunari Kimura ERIA Chief Economist Project So Umezaki ERIA Researcher Coordinator: Policy Support: Anita Prakash ERIA Director for Policy Relations Project Members: India: Prabir De AIC at RIS Professor Priyadarshi Dash RIS Assistant Professor Durairaj Kumarasamy AIC at RIS Consultant Myanmar: Eiichiro Takinami MSR Director U San Tun Aung MSR Vice President Nyana Soe MSR Deputy Director Nyein Nyein Myo MSR Deputy Director Shyam Kumar MSR Research Manager Htet Aung Myat MSR Research Associate Kaung Htet Lin MSR Research Associate Min Min Tun MSR Field Manager Min Aung MSR Research Associate Thailand: Ruth Banomyong Thammasat Associate Professor University Lao PDR: Khammerng Bannalath NIER Deputy Director General Chansy Samavong NIER Researcher Somsanith NIER Research Associate Chanthavongsy Viet Nam: Nguyen Binh Giang Institute for African Deputy Editor-in-chief and Middle Eastern Studies Vo Thi Minh Le IWEP Head, Department of GMS Studies Nguyen Thi Hong Nga IWEP Researcher Japan: Masami Ishida Nihon University Professor Toshihiro Kudo GRIPS Professor Satoru Kumagai IDE-JETRO Director Keola Souknilan IDE-JETRO Deputy Director iv List of Abbreviations ACMECS Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy ADB Asian Development Bank ADBI Asian Development Bank Institute AEP Act East Policy (India) AFAFGIT ASEAN Framework Agreement on Facilitation of Goods in Transit AFAFIST ASEAN Framework Agreement on the Facilitation of Inter-State Transport AFAMT ASEAN Framework Agreement on Multimodel Transport AH Asian Highway AHN ASEAN Highway Network AIC at RIS ASEAN-India Centre at RIS ASEAN Association of Southeast Asian Nations ATM Automatic Teller Machine BBIN Bangladesh, Bhutan, India, and Nepal BIMSTEC Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation BOT Built-Operate-Transfer BRO Border Roads Organisation BTA Border Trade Agreement (India and Myanmar) CBTA Cross Border Transport Agreement CLMV Cambodia, Lao PDR, Myanmar, and Vietnam CVD Countervailing Duty (India) DFQF Duty-Free Quota-Free (India) DGFT Director General of Foreign Trade (India) DoH Department of Highway (Thailand) EDI Electronic Data Interchange EH-CBTA Early Heavest of the CBTA EPC Engineering Procurement Construction (India) ERIA Economic Research Institute for ASEAN and East Asia EWEC East-West Economic Corridor FSSAI Food Safety and Standards Authority of India FTA Free Trade Agreement v GMS Greater Mekong Subregion GR Guarantee Receipt (India) GSM Geographical Simulation Model ICP Integrated Check Post (India) IDE-JETRO Institute of Developing Economies, Japan External Trade Organization IEC Importer Exporter Certificate (India) II-CBTA Initial Implementation of the CBTA IMF International Monetary Fund IMFR India-Myanmar Friendship Road JICA Japan International Cooperation Agency KNU Karen National Union L/C Letter of Credit LCS Land Customs Station (India) LDC Least Developed Country LoA Letter of Agreement LPAI Land Port Authority of India LSPs Logistic Services Providers MDoNER Ministry of Development of North Eastern Region (India) MFN Most Favoured Nation MMK Myanmar Kyat MoRTH Ministry of Road Transport and Highways (India) MoU Memorandum of Understanding MPAC Master Plan on ASEAN Connectivity MUDRA Micro Units Development and Refinance Agency (India) MVA Motor Vehicles Agreement NABL National Accreditation Board for Testing and Calibration Laboratories (India) NCTF National Committee for Trade Facilitation (India) NEDA Neighbouring Countries Economic Development Cooperation Agency (Thailand) NER North Eastern Region (India) NHAI National Highway Authority of India NHIDCL National Highway and Infrastructure Development Corporation Limited (India) NPCC National Project Construction and Cooperation (India) NSEC North-South Economic Corridor vi ODA Official Development Assistance PDR People’s Democratic Republic (Lao PDR) RCEP Regional Comprehensive Economic Partnership RFID Radio Frequency Identification RIS Research and Information System for Developing Countries SAARC South Asian Association for Regional Cooperation SBI State Bank of India SEC Southern Economic Corridor SEZ Special Economic Zone SOP Standard Operating Procedure TAR Trans-Asian Railway THB Thai Baht TIR Transports Internationaux Routiers (International Road Transport) TLH Trilateral Highway UBI United Bank of India UNECE United Nations Economic Commission for Europe UNESCAP United Nations Economic and Social Commission for Asia and the Pacific USD United States Dollar VND Vietnamese Dong WHO World Health Organization WTO World Trade Organization vii The Trilateral Highway and Northeast India: Economic Linkages, Challenges, and the Way Forward Background paper By Prabir De, Priyadarshi Dash, and Durairaj Kumarasamy 1. Introduction The North Eastern Region of India (NER), consisting of the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim (Figure 1), is India’s natural resource powerhouse. The region is endowed with not only vast natural resources, such as oil, natural gas and hydropower, but also agro-climatic conditions that help the region to grow some of the country’s best agro-forestry products. A well-educated labour force, relatively high literacy rate, and access to clean water are some of its unique strengths over other Indian states. The NER is also surrounded by an international border, serving as India’s gateway to the east. Against these strengths, there are weaknesses and threats that emanate to a large extent from the difficult terrain of the region and inadequate infrastructure.1 These pose some of the greatest constraints to economic growth, thereby nullifying the NER’s border advantage. Transport and logistics bottlenecks have long been identified as serious constraints to the growth of the NER.2 Figure 1: North Eastern Region of India Source: Maps of India (www.mapsofindia.com). 1 See, for example, Sarma and Bezbaruah (2009). 2 See, for example, De (2011), Brunner (2010), RIS (2012a), and De and Kunaka (2019), to mention a few. B1-1 Overall, trade and transportation infrastructure in the NER is dominated by the distribution of goods and products that are sourced mostly from the rest of India. The region lags behind the rest of India in the pace of economic growth and has a relatively small regional market.3 Trade has special significance for the economies of the NER states. However, the region’s growth potential is considerably high due to its geographical proximity to the growing Southeast and East Asian markets. Given its geographical location, an enhanced engagement with the Association of Southeast Asian Nations (ASEAN) under the Act East Policy (AEP) may generate new economic opportunities, thereby fuelling growth in the NER, ceteris paribus.4 The NER is central to the AEP. The AEP is designed to provide economic opportunities to the NER to benefit from its vast
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