With ongoing communal and ethnic violence on one hand and the implementation of bold reform initiatives on the other, Myanmar's transition from authoritarianism to democracy presents immense challenges as well as opportunities for neighboring India. How New Delhi reacts to these tests will have wide-ranging impacts on the future of India-Myanmar relations.
The challenges are many. The diplomatic row over pillar number 76 in the northeastern Indian state of Manipur on the Indo-Myanmar border in Holenphai village near Moreh has added to long-running border problems. Although the two sides have agreed to negotiate the issue peacefully, past misunderstandings and alleged intrusions have raised alarm bells on both sides of the border.
In light of clashes between Muslims and Buddhists in Myanmar's Rakhine state and central regions, radical groups have threatened to target Buddhist installations in India. The outburst of Buddhist nationalism in Myanmar is thus no longer an internal affair and could have long term implications for security in wider South and Southeast Asia, including the Indian subcontinent.
The pogroms, some led by Buddhist monks, have radicalized Muslims outside Myanmar, resulting in retaliatory attacks against Buddhists in other regional countries. India has indicated it will tighten security to prevent violence from spilling over into its religiously mixed regions, including the already restive northeastern states along the Myanmar border.
As the world's largest democracy and one of Myanmar's closest neighbors, India has to keep pace with the rising expectations of Myanmar's pro-democratic forces. While India supported Myanmar's pro-democracy resistance in the 1990s, it later built diplomatic and commercial ties with the country's authoritarian military government in a diplomatic shift from "idealism to realism".
Opposition leader Aung San Suu Kyi, who spent 15 of 21 years under house arrest under military rule, could not hide her emotions in advocating a greater role for India in Myanmar's new political order. "Myanmar has not yet achieved the goal of democracy ... We hope that through this difficult last stage, the people of India will stand by us and walk with us as we proceed along the path which they had taken many years before."
The recent easing of Western economic and financial sanctions as reward for political reforms in Myanmar opens the way for India to play a more proactive role. At the same time, New Delhi will give priority to securing its own economic and commercial interests, including oil and gas exploration, vis-a-vis rising competition against new and old powers in the region.
Australia and the European Union have lifted travel and financial sanctions against Myanmar, while the United States has taken what US officials have referred to as a more "calibrated" approach. While Washington has suspended most restrictions on investment and financial services, it still maintains a list of targeted sanctions against certain individuals from traveling to the US and blocks imports of specific products such as jade and rubies of which trade is still dominated by state and military interests.
With the rising business interest of Western countries and rapprochement with the United States, India will now have to push more vigorously to expand its economic interests in Myanmar. India's economic involvement in Myanmar, largely through the public sector, has in the past been marred by complaints about implementation delays and quality control. However, as once closed markets open, the Indian private sector could fill these gaps.
China represents another challenge. While China propped the previous authoritarian regime in exchange for commercial concessions, the new quasi-civilian administration has given precedence to democratic administrative practices of state building.
This shift has brought Myanmar closer to India and poses a considerable threat to China's future influence in Myanmar, witnessed in part by the government's suspension of the US$3.6 billion Myitsone dam project commissioned to Chinese investors by the previous military junta but vigorously protested against by affected local communities.
To be sure, China is still Myanmar's largest trading partner and biggest source of foreign investment. President Thein Sein, meanwhile, has reaffirmed publicly that Myanmar's transition to democracy will not come at the expense of its traditional friendship with China.
The two countries have recently agreed to strengthen communication and coordination to accelerate bilateral exchanges in areas including trade, culture and security in pursuit of a more comprehensive relationship. They have also agreed to more thoroughly evaluate the social and environmental impacts, as well as occupational health hazards, of ongoing and future economic initiatives.
India has long had strong cultural and spiritual people-to-people exchanges with Myanmar, a country many in India view as a "civilizational" neighbor. On the commercial front, given the limitations of Indian public sector investment in Myanmar, namely bureaucratic hurdles and procedural delays, more private sector involvement is needed to consolidate ties. In the absence of a fully democratic culture in Myanmar, it is still difficult to carry out negotiations that would allow for the transition from public to private investment.
Furthermore the lack of connectivity and poor rail-road links in border areas of Myanmar and India's contiguous northeastern region poses a formidable challenge for making Myanmar a land bridge between South and Southeast Asia. India's "Look East" aims to fill this infrastructural gap, including by building roads to connect the two countries, and has been a widely welcomed move.
Still, Myanmar's internal political dynamics will largely determine the course of India-Myanmar relations. The ongoing tussle between hardliners and reformists has stalled the reform process and raised questions about the durability and sustainability of Thein Sein's regime and future role of the Suu Kyi-led, pro-democracy opposition.
Unresolved ethnic conflicts, including in areas bordering on India, have underscored these divergent political perspectives. While recent initiatives have raised hopes for peace, Thein Sein's government needs to move beyond temporary ceasefires and resolve underlying political issues. Myanmar's leaders could thus learn valuable lessons in multiculturalism from India, especially in the fields of adopting federal democratic practices and managing ethnic conflicts.
Political developments in Myanmar over the last two years have opened a new chapter in India-Myanmar relations. While bilateral relations have oscillated over time - from close ties in the initial years after independence to ups and downs during military rule to the present policy of full engagement - India is now uniquely positioned to benefit from the political transition underway in Myanmar.