Business

India Fasttracks Highway To Thailand

When Prime Minister Narendra Modi's government approved $256 million to upgrade a section of a remote border road last month, few took notice. Yet India's decision to revive plans for the trilateral highway, part of an ambitious 1,360-kilometer (845 mile) crossing to link northeastern India with markets in Thailand and beyond, marks the next phase in the jostle between New Delhi and Beijing for economic and strategic influence in the region.

In the last two years alone, India has assigned more than $4.7 billion in contracts for the development of its border roads, according to government figures, including the highway which will run from Moreh in Manipur through Tamu in Myanmar to Mae-Sot in Thailand.

Neglected Infrastructure

Under the Modi government's 'Act East' policy, India is investing in road and rail links on its northeast borders, where it rubs shoulders with Nepal, Bhutan, Bangladesh, China, and Myanmar. But the plan for the India-Myanmar-Thailand highway is not a new one. It's been on the drawing board since 2001 when it was called the India-Myanmar Friendship Road, according to Vijay Chhibber, India's former roads secretary. New Delhi has now proposed to further extend the Myanmar-Thailand link to Cambodia, Laos and Vietnam, shortening travel from Mekong River to India using water transport, in its bid to bind it closer to the Association of South East Asian Nations and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, according to Chhibber.

The road link will be funded by the Asian Development Bank under the South Asian Subregional Economic Cooperation program. Involving India, Bangladesh, Bhutan, Maldives, Myanmar, Nepal and Sri Lanka, the program doubled investments on infrastructure to $6 billion since 2011 compared to $3.5 billion in previous decade, said Ronald Antonio Q. Butiong, Manila-based director at ADB's Regional Cooperation and Operations Coordination Division.

New projects include the Kaladan multimodal transit transport project connecting India's Mizoram state with ports in Kolkata and Myanmar's Sittwe. India has financed the $120 million Sittwe port construction, according to SASEC.

Weak Link

Roads, bridges and railways have been a weak link in India's infrastructure in the north eastern states. In part, it was left underdeveloped as strategy to make the region inaccessible to Chinese troops if Beijing ever tried to repeat the four-week 1962 border war and encroach into the territory India sees as its own.

This has also meant poor access for Indian businesses to markets of southeast Asia. Said Rajiv Biswas, Singapore-based chief economist at IHS Markit, "If India wants to be part of growth dynamic of Asia it needs to develop infrastructure links and that is why this project is a very important first step."