Myanmar: Indian businesses in 'wait and watch mode' to see impact of coup
- One issue of concern is whether the coup will bring back international sanctions on the country, the last of which was lifted in 2016
- There are about 100 Indian companies in Myanmar with investments over 1.2 billion
The Indian business community in Myanmar is in a “wait and watch mode” though not unduly worried after the Myanmarese military detained State Counsellor Aung San Suu Kyi and seized power earlier this week.
One issue of concern is whether the coup will bring back international sanctions on the country, the last of which was lifted in 2016. Previous economic sanctions on Myanmar in the past have included cuts in financial aid, blocking access to assets and curbs on investment flows.
News reports, however, have said that the impact of those sanctions was limited given that some Southeast Asian countries had kept economic engagement with Myanmar, cushioning the country from major economic shocks.
Currently, there are about 100 Indian companies in Myanmar with investments over 1.2 billion, according to the Indian embassy in Yangon.
According to India’s Exim Bank, some of the Indian companies with a presence in Myanmar include ONGC Videsh Limited (OVL), Jubilant Oil and Gas, Century Ply, Tata Motors, Essar Energy, RITES, Escorts, Sonalika Tractors, Zydus Pharmaceuticals Ltd., Sun Pharmaceuticals Ltd, Ranbaxy, Cadila Healthcare Ltd, Shree Balaji Enterprises, Shree Cements, Dr. Reddy’s Laboratories, CIPLA, Gati Shipping Ltd, TCI Seaways, Apollo and AMRI. The imposition of sanctions by the US or UN may create problems for these companies.
When Indian foreign secretary Harsh Vardhan Shringla visited Myanmar last year in October along with Indian army chief Manoj Mukund Naravane, India had announced that it would invest $ 6 billion to construct a petroleum refinery in Thanlyn region near Yangon. If sanctions are imposed, New Delhi may find it difficult to implement this investment.
For now, though, India seems to be in a position to manage its ties with Myanmar despite power changing hands. During their October visit, Shringla and Naravane had called on State Counsellor Aung San Suu Kyi and Commander in Chief of Defense Services Senior General Min Aung Hlaing. Analysts are divided over whether India had picked up signals of trouble between State Counsellor Aung San Suu Kyi and the Myanmarese military leaders or the visit of the two turned out to be opportune given the events that have unfolded this week.
The visit showed that “India understood the distribution of power in Myanmar,” said former Indian ambassador to Myanmar, Rajiv Bhatia. India is likely to re-adopt the policy it formulated in the 1990s to deal with Myanmar which extends moral support for democracy while dealing respectfully with the Myanmar military, he said.