Of A Trade Promise Long Overdue

Over two decades on, the Bimstec Free Trade Area Agreement remains India's longest-negotiated trade deal, with niggling issues holding it back

- ASIT RANJAN MISHRA

At the recently concluded 6th Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) summit in Bangkok, the seven member states pledged to "swiftly" conclude the Bimstec Free Trade Area Agreement (FTA). They also directed the Trade Negotiating Committee (TNC) and its working groups to finalize the constituent agreements "without further delay".

However, the language bore a striking resemblance to the Kathmandu Summit declaration in 2018, where leaders had similarly called for the "early conclusion" of the FTA. That was seven years ago, and given that little has moved since, questions remain about the seriousness of the member countries' intent to move beyond statements to deliver concrete outcomes.

A Bimstec FTA has been in the works for over two decades, making it India's longest-negotiated trade deal, and one that has seen little movement.

State of play

Bimstec was established on June 6, 1997, with the signing of the Bangkok Declaration, to explore economic cooperation on a sub-regional basis involving contiguous countries of Southeast and South Asia grouped around the Bay of Bengal. Initially known as Bangladesh-India-Sri Lanka-Thailand Economic Cooperation (BIST-EC), it now comprises seven member states, with the admission of Myanmar in December 1997, and Bhutan and Nepal in February 2004.

The framework agreement on the Bimstec Free Trade Area was signed in 2004 but has not been made operational.

The Bimstec trade negotiations are spread over tariff concessions on trade in goods, Customs cooperation, services, and investments. The movement of skilled professionals is a particularly sensitive issue in the services agreement.