BMSTEC should work on a regional FTA: CII study

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) would need to finalize a regional free trade agreement (FTA) in phases for the promotion of investment, job creation, technology partnerships and services, according to study by the Confederation of Indian Industry (CII).

The study, Industry Partnerships for Deepening Regional Economic Engagement, recommended promoting a more favourable business climate between member nations, easing foreign direct investment (FDI) restrictions, improving ease of doing business, automation and integrating all relevant customs agencies into a unified system.

The study, released on Tuesday during the inaugural session of the first BIMSTEC Business Summit in New Delhi, also recommended refining governance on dispute resolution, labour, intellectual property rights and innovation.

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"Improving energy collaboration between BIMSTEC states through the collective development of a regional power grid, a dedicated fund for investing and promoting renewable energy businesses, and research into green hydrogen for commercial and civil use (is needed)," it said.

It said the BIMSTEC Technology Transfer Facility (TTF) should promote increased technological cooperation and sharing in fields such as biotechnology, nanotechnology and pharmaceutical technology.

It also recommended fast-tracking the BIMSTEC Transport Connectivity Working Group (BTCWG) for the implementation of the BIMSTEC Master Plan for Transport Connectivity as soon as possible.

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BIMSTEC links five South Asian countries—Bangladesh, Bhutan, Nepal, India, and Sri Lanka—and two Southeast Asian countries—Myanmar and Thailand.

It's an important platform for regional cooperation and connectivity for India, helping it to engage with Southeast Asian countries to counter China's influence.

It allows member countries to work together on security issues like terrorism and cross-border crimes.

While India hopes to strengthen trade and investment ties with its neighbours through BIMSTEC, an FTA, once finalized, could boost economic exchanges.

Negotiations for the BIMSTEC FTA started in 2004. However, they are still ongoing even though member countries have signed separate FTAs.

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"With greater industry collaborations and joint projects, the BIMSTEC region and its member states could accelerate their efforts towards growth and development and derive significant benefits in terms of employment and income generation," the study said.

"The seven members of the BIMSTEC region can together invest in regional technology-oriented industrialization and sustainable manufacturing processes," it added.