India firms Myanmar ties during PM visit

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Indian PM Manmohan Singh (left) shakes hands with Myanmar President Thein Sein during their meeting in Naypyidaw

Visiting Indian Prime Minister Manmohan Singh (left) shakes hands with Myanmar President Thein Sein during their meeting at the president's house in Naypyidaw. India has agreed a raft of deals with Myanmar during a visit by Singh that is aimed at boosting trade and energy links and contesting the influence of regional rival China

India agreed a raft of deals with Myanmar on Monday during a visit by Prime Minister Manmohan Singh aimed at boosting trade and energy links and contesting the influence of regional rival China.

The first Indian premier to visit in a quarter of a century, Singh met President Thein Sein in the capital Naypyidaw as energy-hungry New Delhi woos Myanmar after dramatic reforms ended its international isolation.

The neighbours signed 12 agreements covering an array of issues including security, development of border areas, trade and transport links.

Talks were described as "warm, cordial and constructive" in a joint statement released after the meeting, which stressed the potential for closer future ties.

"Alluding to the mutually agreed target of doubling the bilateral trade by 2015, both leaders emphasised that there is considerable untapped potential for greater trade and urged the business community to capitalise on this potential," it said.

Indian trade with Myanmar stood at $1.2 billion in 2010, far short of the $4.4 billion between China and Myanmar.

Singh is the latest in a series of top-level visitors to Myanmar as the international community begins easing sanctions, raising hopes that the impoverished nation could be the next big frontier market.

He is seen as looking to expand India's influence after half a century of military rule left Myanmar heavily reliant on Chinese investment and political support.

The Indian premier will on Tuesday hold talks with opposition leader Aung San Suu Kyi in the main city of Yangon, in a move seen as a sign that India also wants to repair links with the veteran activist.

New Delhi was once a staunch supporter of the democracy icon, but changed tack in the mid-1990s as it sought closer ties with Myanmar, and drew international criticism for its engagement with the former junta.

India has since pointed to recent dramatic reforms under a new quasi-civilian regime, including Suu Kyi's election to parliament in April by-elections, as a validation of its stance.

Singh "commended the on-going efforts at political, economic and social reform", according to the statement.

Renaud Egreteau, of the Institute for the Humanities and Social Sciences at the University of Hong Kong, said India was "realigning" its policy on Myanmar in an attempt to become its neighbour's trading partner of choice.

"India is trying not to miss the bus in Myanmar as it opens to the world," he told AFP.

But he said the "obstacles are always the same for India", including delays to its infrastructure projects and a lack of political confidence between the two countries.

Singh is travelling with a top-level business delegation and the joint statement said Indian firms would be "specifically encouraged" to invest in oil and gas, infrastructure, tourism, and information and communication technology.

Indian-backed infrastructure projects in the country include a port at Sittwe on the Bay of Bengal, but New Delhi's presence lags well behind that of Beijing, which is behind a host of major energy developments.

According to data from IHS Global Insight, China led the ranking in investments in Myanmar last year, pledging $8.3 billion, with India trailing in 13th place, with $189 million pledged.

China insisted that it "likes to see" relations develop between Myanmar and India, state media reported. Ties between Beijing and New Delhi have not always been smooth, especially where border disputes are concerned.

Rajiv Biswas, Asia-Pacific chief economist at IHS, said Myanmar was in the grip of a "gold rush", and that oil and gas were an area of "considerable opportunity" for investors.

India sees Myanmar as the springboard to a closer connection with the Association of Southeast Asian Nations (ASEAN) as well as a key partner in counter-insurgency and economic development drives in its northeast border areas.

Myanmar, formerly known as Burma, was administered as a province of India during British colonial rule and the two countries have religious links dating back to the early spread of Buddhism more than 2,000 years ago.