BIMSTEC is a free trade agreement being negotiated by Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal. It’s expected to help in elimination of non-tariff measures and give a big push to trade in the region. BIMSTEC may help activate production links among member countries and help in rationalising various non-tariff measures which would give a big push to regional trade and generate regional value chains.

However, there are major hurdles. There is not much economic cooperation between political adversaries Bangladesh and Myanmar. Better economic engagement between the two can open alternate land routes from India to Thailand through Bangladesh and Myanmar — bypassing the Northeast. Also non-tariff barriers have to be eliminated within a mutually agreed timeframe. Transit facilities have to be introduced to promote effective intra-BIMSTEC trade.

BIMSTEC stands for Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation. It is not a new initiative. It was formed nearly two decades ago, in 1997. In 1998, the regional group proposed entering a free trade agreement with India and Thailand, the two main partners. Since then, the trade paradigm in the region has undergone a substantial change. India has entered into free trade agreements with Thailand as well as with Asean. It has preferential trade agreements with prominent BIMSTEC members like Sri Lanka and Bangladesh.