"India is faced with choices of being part of two regional blocs: BBIN (Bangladesh, Bhutan, India, and Nepal), and BCIM (Bangladesh, China, India and Myanmar). In both blocs, India has Bangladesh as a common partner. The prime motives for being a member of the regional blocs are essentially two-fold: economic, and strategically political. There are corners that often state that there are cultural aspects as well. However, there is no denying of the fact that economics is the prime driver of most of such initiatives.
As such, the BCIM economic corridor has been conceived of to accrue significant gains through sub-regional economic cooperation within the region. The multi-modal corridor, if realised, can be the first expressway between India and China and will pass through Myanmar and Bangladesh. The proposed corridor, covering 1.65 million square kilometres, entails China's Yunnan province, Bangladesh, Myanmar, and Bihar in Northern India through the combination of road, rail, water and air linkages in the region.
While this interconnectedness is envisaged to facilitate the cross-border flow of people and goods, minimize overland trade obstacles, ensure greater market access and increase multilateral trade, China has a special interest with the BCIM economic corridor. This is with relation to the development of the relatively less developed Yunnan province by connecting it with other parts of the South Asia, and developing it as a major economic hub. Even further, China's other interest in the BCIM emerges from the perspective of the labour cost.
China envisages a future with rising labour cost, which might negatively affect labour-intensive industries like textile and agro-processing. As rational economic agents, China will definitely intend to transfer these industries to hubs of lower labour costs. Quite logically, Chinese industry will most likely give priority to the trade corridor given the fact that there is an ease of access and a ready market. This is evident from the Chinese interests in funding infrastructure projects in certain parts of the corridor.
On the other hand, after India signed the BBIN Motor Vehicles Agreement (MVA) on June 15, 2015, there has been a renewed interest among policy academics to discuss about the potential of BBIN as the new emerging economic order of South Asia. A study by the Asian Development Bank (ADB) proposed 10 regional road networks as South Asian Corridors (SAC), out of which seven have been identified in the BBIN region. The land-locked trading centres of Nepal and Bhutan can get access to ports in India and Bangladesh. Tripura can get access to Bangladesh's Ashugunj port; and Chittagong and Mongla ports can be accessed to move foodgrain from Kolkata to the North-East.
The opening of the Bangabandhu Bridge over the Jamuna river (the Jamuna multipurpose bridge) and the development of the Padma bridge, the Dhaka-Chittagong transport corridor, and other strategic transport corridors can facilitate trade between Bangladesh and India's North-East and West Bengal. India trades the most in the BBIN sub-regional bloc. India's trade ties with Nepal and Bhutan comprise a significant share of the total international trade of the latter two countries. Bhutan's exports to India account for about 90 per cent of its total exports.
However, if analysed properly, the advantages that may be accrued for BBIN seem to peter out significantly in the context of BCIM because of the ""market imperialistic"" nature of China. While trade may flourish in the BBIN through removal of all sorts of tariff and non-tariff barriers thereby helping the creation of a free-trade zone, there remain possibilities of having smoother international mobility of capital and labour in the region. If the capital movement restrictions are removed over time, one may even think of developing a regional stock exchange, a regional agricultural spot exchange, and the like. This is because there seems to be a higher possibility of achieving fiscal and monetary convergence in the BBIN, than the BCIM. Once that is achieved, the future won't be far, when BBIN will be dreaming of a common currency!
On the other hand, China wants BCIM to flourish more for its own market development. The ""market imperialism"" designs of China are already prevalent with its moves over the South China Sea. China appears to be intent on defining the oceans off its shores as territory to be owned and controlled. Beijing is poised to assume a more prominent presence in both the Indian Ocean and the South China Sea. While this in itself may not indicate an intimidating prospect, the situation may go either way. On the other hand, regional economic integration with China as a partner is a distant dream. The nature of capital market, currency regulations, fiscal management parameters, etc in China are completely divergent from the economies of India and Bangladesh. Moreover, China is in a completely different developmental trajectory, as compared to South Asia.
My limited interactions with Bangladeshi and Nepali policy scholars make me feel that both nations are bound upon looking at China as an ""opportunity"", and not a ""threat"". While China, on the other hand, definitely sees Bangladesh as an opportunity because of the cheap labour and a growing upper-middle class population (as a market opportunity), it is not known whether it really looks at Nepal with the same respect and enthusiasm. As far as India is concerned, India needs to wait and watch the Chinese designs, maintain a good relation with them, and engage them in a manner in order to offset any adversity. Given this uncertainty with China's plans, it is always better for India to move slow with BCIM, and rather use the BBIN advantage to its fullest.
Courtesy: www.abplive.in "
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