BIMSTEC is a unique regional cooperation initiative in terms of geographical contiguity and spread, natural resources and the vast combined labour force of its member states. BIMSTEC countries — namely India, Bangladesh, Sri Lanka, Bhutan, Thailand, Nepal and Myanmar — together boast access to the Indian Ocean and the Himalayas, as well as natural resources such as sapphire, ruby, oil, gas and hydro power. With a young and vast labour force — 6 out of 10 are aged 18–55 years — the future lies in BIMSTEC and the Bay of Bengal.

Trade is a top priority for BIMSTEC countries and it currently accounts for over 60 per cent of the grouping’s combined GDP. Member countries constitute 3.8 per cent of world trade and intra-regional trade grew to 6 per cent of global trade in 2016. Tariffs are no longer the major barrier to intra-regional trade, but cost and time to trade remain relatively high. At the same time, BIMSTEC countries face huge trade burden due to a wide variety of non-tariff measures (NTMs).

While BIMSTEC has long maintained a low profile as a regional bloc since its humble beginnings in 1997, it has been growing rapidly in recent years. This opens up enormous opportunities in trade and value chains within BIMSTEC. But growth of intra-regional investment is negligible and the region is yet to witness any regional connectivity projects on the ground. Still, there has been a rejuvenated momentum in BIMSTEC due mainly to India’s economic growth and political leadership. If India takes an interest while in the driver’s seat, BIMSTEC could make a turn towards deeper integration.

Three developments could add tremendous value to BIMSTEC’s further integration. First, BIMSTEC now has a permanent secretariat at Dhaka and a highly active Secretary General, Sumith Nakandala. Second, with the land boundary deal between India and Bangladesh in place and the peaceful settlement of the maritime boundary between Bangladesh and Myanmar, member countries are now in a more positive position to promote BIMSTEC integration. Third, as tensions between India and Pakistan persist, developments in the South Asian Association for Regional Cooperation (SAARC) will remain slow-moving.

Besides its cross-regional structure, BIMSTEC has huge economic potential given the region’s economic dynamism, huge markets and rich natural resources. BIMSTEC is therefore a natural choice for strengthening India’s footprints in the neighbourhood under its Act East Policy. India has already made significant steps to harness BIMSTEC’s potential. For instance, the first ever BRICS–BIMSTEC Outreach Summit took place at Goa in October 2016 under the leadership of Indian Prime Minister Narendra Modi.

But as BIMSTEC reflects on its first 20 years, what still needs to be done?

First, BIMSTEC countries need to encourage trade in the region by signing the BIMSTEC free trade agreement (FTA) in goods and services. Several estimates indicate that, given existing trade preferences among the BIMSTEC countries under various regional FTAs, implementing the BIMSTEC FTA may not necessarily increase intra-BIMSTEC trade in the short term. But it could certainly activate production links among member countries, generating new value chains.

Second, connectivity — particularly digital connectivity and backend infrastructure — needs to be improved across all BIMSTEC countries. To this end, BIMSTEC’s greatest advantage is member countries’ access to the Bay of Bengal. BIMSTEC has already outlined an ambitious plan to build economic corridors linking India with Southeast Asia. Although the Kaladan multimodal transit transport project aims to strengthen the coastal shipping, member countries need to further promote cooperative coastal shipping in the region. More shipping links, particularly between Sri Lanka, India, Bangladesh and Myanmar, will pave the way for faster trade in the region.

Third, BIMSTEC needs specialty infrastructure. Myanmar is setting-up several port-based special economic zones at Dawei, Kyauk Phyu, Thilawa and Pathein, which upon completion would not only strengthen Myanmar’s global integration but also boost BIMSTEC connectivity. India and Thailand should seriously consider joining in the Mekong–India Economic Corridor (MIEC) project, which aims to connect South Asia with Southeast Asia by cutting across Thailand and Cambodia. Myanmar with India’s assistance may set up a new special economic zone at Sittwe. The emphasis of the corridor is on expanding the manufacturing base and trade with the rest of the world, particularly with India.

Fourth, the Bay of Bengal plays a key role in the region’s maritime architecture. BIMSTEC’s resurgence, centring on the Bay of Bengal, is critical to the Asian integration process in the backdrop of the Regional Comprehensive Economic Partnership (RCEP). There is great expectation for member countries to build a stronger, more inclusive and people-driven BIMSTEC. India’s involvement in the grouping holds promise to foster the regional integration process.

BIMSTEC is a natural choice for strengthening integration between South Asia and Southeast Asia. Through improved cross-regional relationships, particularly in commerce, culture and connectivity, BIMSTEC may truly come of age in the years to come.

Prabir De is a Professor at the Research and Information System for Developing Countries (RIS) and Coordinator, ASEAN–India Centre (AIC), New Delhi. The views expressed in this article are his own and do not represent the AIC or RIS.