Sunday 20 / April / 2025
New Delhi: The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional grouping established in 1997, consisting of seven countries—Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand. These nations, connected by the Bay of Bengal, form a natural bridge between South and Southeast Asia. BIMSTEC aims to foster regional cooperation in sectors such as trade, energy, connectivity, environment, public health, and counter-terrorism.
In the fiscal year 2023–24, the total trade among BIMSTEC member countries reached more than USD 44 billion. The region, home to over 1.6 billion people and possessing a combined GDP of about 5 trillion, holds vast potential for regional integration. BIMSTEC has become an important platform for India to enhance its regional footprint and realize its Act East and Neighbourhood First policies, particularly in the strategic Indo-Pacific region.
India’s trade with BIMSTEC countries has shown a steady and remarkable rise over the past decade, underpinned by strategic policy shifts and growing regional connectivity. In 2014, the total trade between India and the BIMSTEC region stood at around USD 20 billion and grown to more than USD 44 billion in 2023, doubling over nine years. This growth reflects India’s growing engagement with its eastern neighbours, as well as the mutual desire among BIMSTEC countries to deepen trade and economic ties.
One of the major contributors to this trajectory is India’s dual policy framework—the Act East Policy and the Neighbourhood First Policy. These policies have created a diplomatic and infrastructural ecosystem that promotes trade, investment, and people-to-people connectivity. India has significantly invested in transport corridors, port connectivity, and digital infrastructure to support smoother cross-border trade. Improvements in customs efficiency, logistics systems, and trade facilitation measures have also played a key role.
Furthermore, the diversification of trade into new sectors such as digital services, fintech, and renewable energy components has expanded the trade basket beyond traditional goods. Thailand and Bangladesh have emerged as the top trade partners, while Nepal, Sri Lanka, and Myanmar continue to play vital roles in India's regional trade network. The region’s growing integration with global value chains has also helped in boosting bilateral exchanges. With policy momentum and strategic vision in place, India's trade relations with BIMSTEC countries are expected to continue on an upward trajectory.
Significance of PM Modi’s Recent Visit to BIMSTEC Countries
Prime Minister Narendra Modi's visit to Bangkok in April 2025 to participate in the 6th BIMSTEC Summit reaffirmed India’s leadership in regional cooperation. The visit was strategically significant in accelerating efforts towards finalizing the BIMSTEC Free Trade Agreement (FTA), which has been under negotiation for years. During the summit, PM Modi engaged in bilateral dialogues with leaders from Bangladesh, Thailand, and Sri Lanka, focusing on expanding digital infrastructure, maritime connectivity, and climate-resilient trade mechanisms.
India emphasized its support for a collective maritime vision in the Bay of Bengal and pledged increased investments in clean energy and technological innovation. PM Modi’s participation reflected India’s commitment to a stronger, more integrated BIMSTEC, aligning with India’s Indo-Pacific strategy and counterbalancing the growing influence of China in the region.
India’s total trade with BIMSTEC countries over a nine-year period has increased tremendously, with only a minor dip in 2020 due to the COVID-19 pandemic. Exports have grown from USD 10.5 billion in 2014 to USD 20.3 billion in 2023, while imports have been rising from USD 9.8 billion to USD 24.0 billion over the same period. This widening trade volume highlights India’s growing dependence on the region for key imports, and vice versa.
India’s Major Trade Partners in BIMSTEC Countries and Trade Composition
Thailand and Bangladesh are currently India’s most significant trading partners within the BIMSTEC grouping. In 2023–24, India’s bilateral trade with Thailand stood at approximately USD 15 billion. Of this, India exported goods worth USD 5.04 billion, including automobiles, chemical products, and machinery, while importing goods worth USD 9.91 billion, comprising mainly electrical appliances, rubber products, and processed food items.
India’s trade with Bangladesh totalled around USD 13 billion, making it the second-largest partner within BIMSTEC. India exported goods worth USD 11.06 billion, largely comprising refined petroleum, pharmaceuticals, cotton textiles, and industrial machinery. Imports from Bangladesh, valued at USD 1.84 billion, consisted of garments, jute products, and fish.
Sri Lanka and Nepal also remain important trade partners. Bilateral trade with Sri Lanka reached USD 7.4 billion in 2023, driven by Indian exports of fuel, pharmaceutical products, and construction materials. India imported tea, spices, and rubber from Sri Lanka. With Nepal, India’s trade volume exceeds USD 7 billion, reflecting close economic integration. India exports refined oil, agricultural machinery, and electronics to Nepal and imports electricity and agricultural goods.
Bhutan and Myanmar, while smaller in trade volumes, play key roles in India’s strategic energy and border trade framework. India imports timber, natural gas, and agricultural products from Myanmar and electricity and minerals from Bhutan.
India’s Top Items of Trade with BIMSTEC Countries
India’s export basket to BIMSTEC countries has traditionally been dominated by petroleum and mineral fuels, pharmaceuticals, iron and steel, and manufactured goods. Over the years, Indian exports have become increasingly diversified. Petroleum remains a core export, particularly to Bangladesh and Sri Lanka. The pharmaceutical sector has expanded significantly, with Indian generic medicines being exported to all BIMSTEC countries due to their affordability and reliability. Iron and steel products, used in construction and infrastructure development, have also seen strong demand in Nepal, Bhutan, and Myanmar.
India also exports machinery, vehicles, electrical equipment, cotton yarn, textiles, and processed food products across the region. The textile machinery sector, in particular, has seen rapid growth in exports to Bangladesh and Thailand. Agricultural products such as rice, sugar, spices, and dairy also form a significant part of exports.
On the import side, India sources a wide range of goods from BIMSTEC countries. From Thailand, India imports rubber, electrical goods, and processed food. Sri Lanka and Bangladesh supply high-value tea, garments, fish, and jute products. Myanmar exports timber, pulses, and edible oil seeds. Nepal and Bhutan contribute hydroelectricity, minerals, and organic agricultural products. The expanding trade composition suggests a healthy two-way trade that supports both industrial and primary sector growth in the region.
India’s Bilateral Investments with BIMSTEC Countries
India has been actively investing in infrastructure, energy, manufacturing, and services across BIMSTEC countries to enhance bilateral economic relations and regional connectivity. In Bangladesh, Indian investment has surpassed USD 3 billion, largely concentrated in sectors such as power generation, pharmaceuticals, textiles, and logistics.
In Sri Lanka, India has invested significantly in port development, railway rehabilitation, and energy projects. Notably, the Trincomalee Oil Tank Farm and the India-Sri Lanka Ferry Service are crucial markers of infrastructural connectivity. Indian companies have also participated in renewable energy and telecommunication initiatives in the island nation.
Nepal has received investments from India in hydroelectric projects like Arun-III and in cross-border transmission lines. Similarly, Bhutan benefits from Indian investments in hydropower plants, which form the backbone of the Bhutanese economy and also serve India’s energy needs.
India’s economic footprint in Myanmar includes investments in gas exploration, telecommunications, and the Kaladan Multimodal Transit Transport Project. Indian firms have also been active in manufacturing and agriculture in Thailand. Through lines of credit, grants, and technical assistance, India also supports a wide range of capacity-building initiatives, contributing to the region’s sustainable development goals.
India’s Future Trade and Investment Scenario with BIMSTEC Countries
India’s future trade and investment scenario with BIMSTEC countries is likely to be shaped by the convergence of strategic, economic, and technological forces. One of the most significant developments on the horizon is the finalization of the BIMSTEC Free Trade Agreement (FTA), which is expected to remove tariff and non-tariff barriers and facilitate smoother intra-regional trade. The agreement, once operational, could significantly boost India’s exports to neighbouring markets and allow regional firms better access to Indian consumers.
The development of integrated supply chains in textiles, automotive components, and food processing can also support deeper economic integration. With China’s supply chains being reassessed globally, BIMSTEC offers India a strategic opportunity to position itself as an alternative sourcing and investment destination.
Infrastructure remains a key focus, with initiatives such as the India-Myanmar-Thailand Trilateral Highway, Sagarmala port development, and enhanced rail links in eastern India playing vital roles. Furthermore, cross-border digital payment systems and fintech platforms are set to revolutionize trade settlements and small-business collaboration.
India’s investments are expected to increasingly align with sustainability goals, ensuring that economic growth is inclusive and environmentally conscious. In the years ahead, BIMSTEC could well emerge as India’s most strategically aligned regional economic partner.
In conclusions, India’s expanding trade and investment relations with BIMSTEC countries represents not just economic growth, but a shared vision of regional integration, resilience, and development. From a trade value of just over USD 20 billion in 2014 to more than USD 44 billion in 2023, the partnership has matured and diversified. With continued progress on connectivity, digital transformation, and regional cooperation frameworks like the FTA, BIMSTEC is poised to become a cornerstone of India’s Indo-Pacific significance. As India and its BIMSTEC neighbours navigate global uncertainties and economic transitions, their collaborative model can serve as a blueprint for sustainable regionalism in the 21st century.
