Prime Minister Manmohan Singh and Myanmar President Thien Sien on Monday signed a slew of agreements to make it easier for Indian companies to do business in the reclusive south-east Asian country that has begun to open up.
These included the opening of a United Bank of India branch in Yangon, an air service agreement for airlines and a $500 million line of credit for Myanmar.
One Indian firm, Jubilant Energy, which bid for an oil-gas exploration block last October, has bagged its second onshore block in the Irrawaddy river delta area.
“More such blocks will be available,” Indian officials said. The JK Group signed an agreement with the Myanmar government for setting up a paper mill, and Kirloskar got the green light for a pump factory.
The agreements will help Indian firms, which have in the past struggled in bilateral trade.
For future trade, the Reserve Bank of India and the Central Bank of Myanmar have agreed to work out a “currency arrangement” to allow payments in local currencies.
The air services agreement gives “designated airlines” on both sides with the right to operate between the countries and to also have “fifth freedom rights” — meaning Indian airlines would be allowed to use Yangon as a stopover en route to another destination, say Bangkok.
Myanmar has already said it wants to use the Line of Credit for areas like irrigation, railways and power.