India-Myanmar Borderlands: Exploring New Cross-Border Trading Routes

 Keywords: Myanmar, India, Northeast India. Border, Connectivity, Trade, Mokokchung

Date: 28th Feb, 2025

Myanmar has been undergoing a nationwide civil war. The country’s Chin State, Sagaing Region, and Kachin State bordering India’s Northeastern states have witnessed violent conflicts and continued political instability since the military coup in 2021. This not only raised serious security concerns on the Indian side but also impacted border stability including border trade and connectivity.

Several ethnic armed groups and resistance forces have been actively fighting against the military junta including the Arakan Army, the People's Defense Force (PDF), the Kachin Independence Army and the Chin National Army.

Even as India confronts serious security challenges posed by the ongoing conflicts in Myanmar, India’s relations with Myanmar are driven by long-term strategic and economic interests. This point has been demonstrated in a recent development when the commerce ministers of the neighbours recently met and discussed various issues relating to border trade and connectivity.

On February 14, 2025, Myanmar's Deputy Minister for Commerce, U Minn Minn, met with Shri Jitin Prasada, India's Union Minister of State for Commerce and Industry and stressed the importance of continued engagement with Myanmar despite the country's ongoing political and security challenges.

The two leaders also highlighted trade potential in pharmaceuticals, pulses and beans, and petroleum products, as well as the expansion of the rupee-kyat trade settlement mechanism. India and Myanmar have been discussing the need to resume border trade through roads that have been adversely impacted by the ongoing conflicts in Myanmar.

The Sagaing Region, a crucial trade corridor connecting India and Myanmar, has become a stronghold for the PDF, leading to frequent military operations and airstrikes by the juntas, disrupting trade and transportation. Additionally, ethnic armed groups such as the CNA and the Chinland Defense Force (CDF) continue to resist the junta in Chin State. Meanwhile, the Arakan Army has taken control in Rakhine State. All these pose challenges to India's strategic investments.

Delhi’s strategic ties with Myanmar in the context of the ongoing conflicts are shaped by three factors. First, China's significant economic and military influence in Myanmar–––which includes infrastructure projects under the China-Myanmar Economic Corridor (CMEC). India continues to engage in trade and enhancing border connectivity to counterbalance China's dominance.

Second, India's Act East Policy positions Myanmar as a gateway to Southeast Asia as it serves as the only land-bridge between India and the Association of Southeast Asian Nations (ASEAN). A stable Myanmar is essential for India's connectivity projects such as the India-Myanmar-Thailand Highway and the Kaladan Multi-Modal Transit Transport Project. Lastly, India needs a balancing approach and thus maintains informal relationships with opposition forces in Myanmar to protect its interests.

Indian energy companies, notably the Indian Oil Corporation, have been exploring opportunities to expand fuel exports to Myanmar to support the country's energy security. Furthermore, the recently launched Rupee-Kyat Trade Settlement Mechanism aims to facilitate trade without relying on the US dollar that would help reduce transaction costs.

In another significant development concerning connectivity with Myanmar, new road proposals are being developed to connect with Myanmar. One of the key issues discussed during the 76th meeting of the Network Planning Group (NPG) under PM GatiShakti last year was the proposal to widen the existing NH-202 in Nagaland from a single-lane road to a two-lane paved highway.

Mokokchung, located in the northeastern state of Nagaland bordering Myanmar’s Sagaing Region, is crucial in this context as it can enhance cross-border trade between India and Myanmar. Its strategic significance derives from its location, connectivity, and historical trade practices, making it a vital hub for regional economic integration.

Mokokchung is strategically situated at the intersection of several important transportation routes that connect it to key commercial centres within Nagaland, Assam, and Myanmar. These include major national highways such as NH-61 (Kohima-Wokha-Mokokchung-Changtongya-Tuli-Amguri), which links Mokokchung to the rest of Nagaland and Assam.

Another important route is NH-155 (Pfutsero-Kiphire-Tuensang-Mokokchung), which connects Mokokchung to the eastern parts of Nagaland, particularly Tuensang and Mon, and enhances its role in facilitating cross-border trade with Myanmar by linking it to critical border points such as Moreh and Pangsu Pass.

Additionally, the Mokokchung-Mariani Highway connects Mokokchung to Mariani in Assam, a significant town near the Assam-Nagaland border, provides further access to the railway network in Assam and improves logistics. The Mokokchung-Lumami-Zunheboto-Kohima Highway links Mokokchung to Kohima, the state capital, and further connects it to important economic nodes within Nagaland.

A key government initiative is the widening of NH-202, which will enhance road connectivity between Mokokchung and other northeastern districts, particularly those near the Myanmar border. This road improvement will not only enhance accessibility to Myanmar but also improve connectivity to major economic zones in Nagaland, such as the Mega Food Parks in Dimapur and Special Economic Zones (SEZs) in Wokha.

These infrastructural advancements are vital for facilitating the flow of goods between India and Myanmar, including agricultural products, textiles, handicrafts, and other goods, thus promoting regional economic integration. Local businesses in Mokokchung and surrounding districts like Tuensang, Wokha, and Zunheboto can benefit from seamless trade with Myanmar if rupee-kyat settlements expand.

Goods such as agricultural products, handicrafts, timber, and textiles from Nagaland can be processed and aggregated in Mokokchung before exporting to Myanmar, tapping into Southeast Asia's growing market.

Mokokchung's central role in Nagaland's economy is further supported by its potential to become a manufacturing and processing hub. The town has the opportunity to attract investments in industries like agro-processing, textiles, and bamboo-based products, contributing to a vibrant export-oriented economy.

Establishing logistics and warehousing infrastructure will ensure a steady supply chain for cross-border commerce. Improved road networks and the establishment of trade posts near Myanmar could also help Mokokchung evolve into a key commercial hub for Nagaland and the larger Northeast region.

Strengthening border connectivity and trade routes will benefit India and Myanmar economically and also serve as a strategic counterbalance to external influences in the region. Ultimately, a stable Myanmar is essential for India’s broader strategic interests and its connectivity with Southeast Asia, making continued engagement and cooperation imperative for both nations.

Sampa Kundu is a Consultant, ASEAN-India Centre at RIS, New Delhi and a Visiting Fellow, Asian Confluence.

Disclaimer: The views expressed above and the information available are those of the author/s and can therefore in no way be taken to reflect the position of Asian Confluence

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