Myanmar hopeful of Rupee-Kyat trade arrangement by June-end

Myanmar Commerce Minister U Aung Naing Oo on Monday expressed hope that a Rupee-Kyat trade arrangement between the two nations will be in place by June-end.

Oo said the trade volume between the two countries will double once the arrangement is worked out as Myanmar which has been hit by US sanctions is unable to earn sufficient foreign exchange to import goods from its trade partners.

''We are suffering from US sanctions since 2021 and it is becoming difficult to settle payment transactions with other countries in dollars,'' he said at an event organised by EEPC India here.

Under the special arrangement, Myanmar will accept Rupee payments for all its exports to India and use that rupee hoard to import from here.

To facilitate this, RBI has appointed Punjab National Bank (PNB) to open a special Vostro account for foreign trade with Myanmar. PNB in turn has approached two banks in Myanmar where these accounts will be opened.

The minister said ''negotiations between PNB and the central bank of Myanmar are going on and are expected to be completed by this month. Once this arrangement becomes operational, trade volume between the two countries will double''.

Oo said India is the eleventh largest investor in Myanmar with USD 775.11 million worth of investments.

He said India was also one of the main trading partners of Myanmar in the previous fiscal year.

India had exported USD 820 million worth of goods to its eastern neighbour and imported goods worth USD 540 million.

Top exports from Myanmar to India include metal ore, natural rubber, plywood, fish, lentils and garments.

Myanmar's major imports from India include pharmaceuticals, petroleum products, chemicals, machinery, coffee and tea. India accounts for five per cent of Myanmar's international trade, he said.

Myanmar has already put in place similar bilateral trading arrangements using national currencies with China and Thailand.

''We are going for this special arrangement with neighbouring countries to reduce our dependence on dollars,'' Oo added.

The minister also said that Myanmar Central Bank and the RBI have mutually agreed in principle on a Rupee-Kyat payment system and standard operating procedures (SOP) to support this has been negotiated in line with the foreign exchange policies of both countries.

The Engineering Export Promotion Council of India or EEPC said it has already taken up the issue with the Centre, and once this rupee trade arrangement is established, the competitiveness of both India and Myanmar would be enhanced.

''Bilateral trade and investments will get a significant boost as this process will be less complicated in the absence of any foreign currency,'' said PK Shah, EEPC's chairman of the Committee on Foreign Trade Policy and WTO.