Gaurav Manghnani has been living and working in Myanmar since 2013. As the country head, since 2016, of Credera, a trading and investment firm with roots in an Indian family enterprise set up during the British colonial era in Myanmar, he’s among the most prominent members of Yangon’s resident Indian business community.
Mizzima caught him on the sidelines of the Myanmar-Indian Business Conclave on 22 March, when a new India-Myanmar Chamber of Commerce was launched, with him as an executive committee member. He talked of his optimism over Myanmar’s economic revival and the need to kick stagnating Indian trade and investment to the next level.
How has your experience been?
It’s been very encouraging. The way business happens here is more personal—the interface that people prefer here is more personal relationships, more in-person talks, rather than electronic interfaces and emailing. This is very similar to how it works in India. Ultimately business is done among people who get along well with each other.
Recently, investors and businessman have expressed frustration over the slow pace of economic reform in Myanmar. What’s your view?
I personally feel, if they’re taking time to get the reforms underway and making sure these reforms are here to stay and forward-looking, they won’t make the mistakes other countries have made.
I recently read a news piece that said it’s discouraging that implementation of the Companies Law [which would permit an unprecedented degree of foreign ownership in local company stock] has been delayed till August.
I personally think it’s the best thing that could happen to Myanmar because, if they had come up with the Companies Law and the offices downstream weren’t trained to implement it, it would be chaotic. It’s a good idea to take your time and train your team. This window is very important.
Why have India-Myanmar trade and investment not lived up to expectations?
Trade has been stagnant at this level for a while now. To push it beyond the current volume of around US$2 billion requires something different to be done. The same model won’t grow.
The launch of a formal business chamber [the India-Myanmar Chamber of Commerce] is a step in that direction. Having the motor vehicles agreement, now in progress between the governments of India and Myanmar, would boost bilateral trade at the land border, which is low compared to the border-trading zone in Muse [on the border with China in northern Shan State].
Indian investors like to test the waters first—set up a representative office, try to do a bit of trading, and then take it to the next level of investment, which makes the process a longer one.
At today’s event, I met a couple of [Indian] CEOs who were already looking at how to set up representative offices, to explore the country and its opportunities. That would be a good first step for them. But there would be challenges for them to navigate a country like this. They’re coming at a time when the country is undergoing a lot of changes.
Are Indian quotas on Myanmar beans and pulses, imposed in August last year but still in place, counter-productive for fostering closer ties?
The implementation of the quota was not directed at a particular country. It had more to do with the situation inside of India, where the supply of a particular crop was in excess. Obviously, when there’s oversupply of a particular product, you take measures to control and moderate the inflow of these products.
One of the impacted countries was Myanmar, which the [Myanmar] deputy commerce minister has mentioned [at the business conclave]. His appeal was to have specific representation for Myanmar in the quotas, which probably would be taken up by the Indian authorities.
Is the new India-Myanmar Chamber of Commerce a significant development?
One encouraging thing is that the patron of the chamber is the ambassador himself. He’s been very instrumental in the setting up of this chamber, for starters, and then making space for an IMCC launch at an event as important as the [business conclave].
The chamber has identified four sectors where India-Myanmar trade could be taken to the next level—agriculture, power and infrastructure, healthcare and IT services and skill development. The current address of the chamber is the business centre of the embassy.
We get a lot of questions about membership eligibility. It’s for those who are interested in India-Myanmar trade in any direction. Even if it’s an American company interested in India-Myanmar trade, it’s free to join and use the forum.
What are the big draws of Myanmar for Indian businessmen?
If Indian businessmen have experience of working in CLMVT [Cambodia, Laos, Malaysia, Vietnam, Thailand], then they would see that Thailand, for example, is a very competitive market, and mature.
Of course, it takes a while to find space in a mature, developed market. Here in Myanmar, there would be first-mover advantages. The country is leapfrogging. As we saw with telecoms, they directly adopted the latest technologies.
Whatever Indian companies have strength in—let’s say, IT and pharmaceuticals—they could bring the best technology, which exists in India, straight to Myanmar.
India is growing at a very fast rate so [Indian investors] find a lot of opportunities for doing business within India. But, if they start looking to expand, I think Myanmar is an interesting destination. Neighbours first—this is how Indian investors have acted, with presence in Sri Lanka, Nepal, and Bangladesh. Myanmar is an obvious next destination.
Do you expect any particular sector to take off in the next year?
2014-15 was the year of telecoms in Myanmar. My prediction is that 2018-19 will be the year of power and of financial services.
We’re looking at insurance coming up in a big way. One Indian insurance company, the New India Assurance Co. Ltd., has had a representative here for a while already. Also, the current president of the India-Myanmar Chamber of Commerce is representing the power sector, with Adani Group. There could be collaboration in these two sectors.