New Delhi, Sep 8 (IANS): The Export Import (EXIM) Bank will open a representative office Monday in Yangon, former capital and commercial centre of Myanmar, as India refashions its relations building diverse layers of contact with the Southeast Asian country that will chair the ASEAN bloc next year.

The setting up of the EXIM Bank office is a follow up on Prime Minister Manmohan Singh's visit to the country in May last year during which India signed a credit line of $500 million to build railway and irrigation projects. India has also sanctioned another $250 million for various other projects. The Bank has asked the government to finalise those, says David Rasquinha, executive director of the bank.

There also plans to use the credit scheme under the National Export Insurance Account operated by the Bank under which government agencies can import goods and services from India.

According the Myanmar government's 2013-2014 fiscal report, Myanmar will implement several projects in sectors like agriculture, power, communications and transportation. The McKinsey Global Institute says Myanmar would need $650 billion in investment by 2030 to support growth. The IMF predicts the country will expand 7 percent over the next five years.

India is stepping up its development cooperation in light of Myanmar's continuing reform process and its age-old interconnectedness. The spread of ideas and trade across India's east coast, from Bengal, Odisha and Tamil Nadu go back to millenia and as author Thant Mint-U points out, that influenced its religion, language and culture.

Also, in the not too distant past when Myanmar was known as Burma and Yangon was Rangoon, many in eastern India saw the country as an El dorado. That, however, came to an end in 1962, when Indian businesses were taken over and Indians expelled.

Today, India is trying to leverage its aid and loan programmes and forstering economic and business links as part of its diplomatic effort to weild "soft" influence and to counter what analysts say the Chinese ingress into the country's economy and grabbing of mega project contracts. In such a context, the role of EXIM Bank as an instrument of economic diplomacy is seen as critical, especially when the government in Nay Pyi Taw is looking to broaden investment and development in the economy beyond the extractive and energy industries.

Mynamar is looking to attract foreign investment by reforming its legal and regulatory framework, and has plans to open up its stock exchange within the next two years.

Some analysts say Myanmar's ongoing liberalization could cut its dependence on China. There have been protests against certain Chinese companies for their violation of environmental laws as well as disregard for local customs and traditions.

Officials say development is not a zero sum game (a situation in which one participant's gains result only from another's losses), and there is enough scope for partnership. China may have deep pockets and can lend at very low rates, but it cannot finance every project.

India's investment in Myanmar is around $275 million.

EXIM office would extend advisory services and provide support to investments by Indian companies. According to Rasquinha, Myanmar offers a lot of business opportunities in various sectors and the bank is trying to encourage Indian companies to do business there.

Companies that are upbeat about Myanmar are Ramco, Sun Pharma, CMC, and New India Assurance. Tata International has set up an office for its newly-formed agricultural trading vertical.

Opposition leader Aung San Suu Kyi has stressed the need for "democracy friendly investments" in the country. She has also described education as one of the keys to development and security.

As Myanmar takes steps to democracy, India can assist in institution building and other capacity building. India is planning to set up an IIT-type institute in Myanmar.

Myanmar is strategically-located as it also borders China, Thailand, Laos and could be a bridge between the vibrant economies of India, ASEAN and East Asia and offers huge scope for Indian companies to invest across diverse sectors. There are areas where they would not face much competition, such as education, healthcare, infotech, entertainment and provide cost-effective alternatives.

The Confederation of Indian Industry (CII) has suggested that border trade and investment facilitation as well as cooperation in services and technology transfer must be addressed for greater economic linkages with Myanmar. The two countries should conclude an agreement on cooperation in banking and financial services to enable greater private sector engagement.

In the mean time, reports said tax-free markets will come up at nine places along the border to develop the areas around. According to the New Light of Myanmar, a preliminary agreement has reached between Chin State of Myanmar and India to open such markets which will allow merchants to trade 40 commodities.

Two-way trade in 2012-13 was worth over $1.8 billion. The two countries have set a target of $3 billion by 2015.