Signals emanating from the visit of Myanmar’s second most powerful ruler vice senior General Maung Aye to India is that that the two neighbours are ready to consolidate bilateral ties.

General Maung Aye met the top political and army leadership of India immediately after he arrived in New Delhi for a five-day official visit. General Aye is the vice chairman of the State Peace and Development Council of Myanmar. He met President Pratibha Patil, Vice-President Hamid Ansari, Prime Minister Manmohan Singh, external affairs minister Pranab Mukherjee and Army chief Deepak Kapoor. He also met Leader of the Opposition L K Advani.

During the meeting Prime Minister Dr. Manmohan Singh did not hesitate to raise the issue of the main Opposition leader Aung San Suu Kyi. The issue which many believe that is red rag to the Myanmarese military junta. The Prime Minister noted the positive steps being taken by the Myanmar Government towards national reconciliation and political reforms, including the announcement of elections in 2010.

The Prime Minister underlined the need for Myanmar to expedite the process and make it broad-based to include all sections of the society. Dr. Singh made it clear that “all sections of society” including Suu Kyi and the various ethnic groups in Myanmar should be involved in the process. The Prime Minister expressed support for the UN secretary general’s good offices and his satisfaction at the facilitation of the visit of UN special envoy, Ibrahim Gambari by the government of Myanmar.

India has also asked the neighbouring country to mount anti-militancy operations against the anti-India ultras operating out of the country. India and Myanmar have also agreed to take steps to open up more border points, apart from the existing ones in the North-Eastern states for regular trade.

General Aye was leading a high-level delegation, including members of the business community. Apart from Delhi, he will also visit places of economic, scientific, historical and religious interest. An important highlight of General Aye’s talks with the Indian leadership was the highly strategic Kaladan project - a multi-model transport project - that India and Myanmar have signed and is bound to change the face of North-East.

President Pratibha Patil expressed happiness at the conclusion of the Kaladan project, while noting with satisfaction on the multi-faceted India-Myanmar relationship, which encompasses a wide range of areas including cross-border developmental projects, trade, IT, Telecommunication and Hydrocarbons.

The Kaladan project will usher in connectivity between Myanmar and India, in particular with India’s Northeastern states. Myanmar and India share a border of more than 1,600 kms. Myanmar also serves as a gateway for India to Southeast Asia and ASEAN.

The project includes the up gradation of the seaport in Sittwe, widening and deepening of the Kaladan River and development of a road to connect Aizwal. The Kaladan project will include shipping, riverine and road transport. New Delhi wants to connect the Northeast with the commercial sea routes. Moreover, with the development of Sittwe port and the Kaladan River as navigation efficient, the region is expected to have another viable access to the Southeast Asian countries.

India has decided to spend nearly $100 million for the project. The junta, though assuring free land for the project, had shown reluctance in investing money in the project, which finally compelled New Delhi to extend a soft loan of $10 million to the SPDC leaders. The Kaladan project is anticipated to be completed within four years and the project will be executed by the public sector, Rail India Technical Economic Services Organisation.

But the signing of the deal would not be without repercussions, as the international community has been raising its voice against the military junta for its continued repressive policies on the pro-democracy activists including Daw Aung San Suu Kyi and the poor human rights record of Myanmar.

Former defence minister George Fernandes is learnt to be planning a protest against the growing India-Myanmar relations. Fernandes, who has maintained close links with Myanmar’s pro-democracy movement, is miffed at India’s approach to give further legitimacy to the military junta in Yangoon.

It may be mentioned here that in Myanmar thousands of agitating monks were subjected to torture during September 2007 in the streets of Yangon. More than a hundred people were feared killed as the junta controlled the sporadic protests with an iron hand.

A number of agreements including the two protocols of the Kaladan Multi-Modal Transit Transport project and Double Taxation Avoidance Agreements (DTAA) were signed in the presence of the Vice-President and Vice-Senior General Maung Aye.

Both leaders recognised the need to cooperate closely in the hydrocarbon sector. India reiterated its commitment to support Myanmar in the telecommunication and the IT sectors.

The DTAA would cover income tax and surcharge in the case of India and the income tax and profit tax in the case of Myanmar. The agreement provides that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state.

According to the agreement, profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for 270 days or more. However, the maximum rate of tax to be charged in the country of source will not exceed 5 per cent in the case of dividends and 10 per cent in the case of interest and royalties. The agreement also incorporates provisions for exchange of information between tax authorities of the two countries and incorporates anti-abuse provisions to ensure that the benefits of the agreement are availed by the genuine residents of the two countries.

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