International condemnation of Myanmar’s human rights record and violation of democratic norms had isolated this resource rich nation but India has focused on engaging the military junta and not isolating it for US and North Atlantic Treaty Organization (NATO) objections. India feels that penalizing Myanmar for a globally prevalent trend of autocracy, and especially present in its neighborhood, is unfair, unnecessary, and excessive. In fact, Western nations have used different pressure tactics to dissuade relations with Myanmar. The United Kingdom had threatened India that it will
hold back critical spares for Advanced Jet Trainers if India follows through with its plan to sell BN-2 Islander aircraft.
A report in the Myanmar Times quoted an unidentified energy ministry official as saying that the gas contract will be issued to the highest bidder and were considering three options to sell natural gas—via pipeline, building a Liquefied Natural Gas (LNG) plant, and construction of gas-processing industries.
In November 2005, China signed a deal with Myanmar to explore possibilities of building a pipeline from the Arakan Coast to its Yunnan province and across many rivers and mountainous land. India is negotiating a three-billion-dollar deal to run a pipeline from Myanmar across Bangladesh to the eastern Indian city of Kolkata, but has failed to make headway because of
political problems created by the transit nation.
However, the Indian President
Abdul Kalam visited Myanmar
and concluded a deal that would allow the natural gas to be brought either to
the North East or converting it to LNG and transferred by ship. To sweeten the
deal, India is also planning to
invest heavily in Myanmar infrastructure and also to
develop the port facilities at Sittwe to gain access to the North Eastern part of the country.
Thailand has already created a pipeline carrying one billion cubic feet of gas per day from Myanmar's offshore reserves in the southeast in the Andaman Sea but does not have any investments in the North.
In order to minimize cross bidding and artificially increasing the rates of fossil fuels,
India and China have signed a framework that will allow joint bidding for energy assets internationally. However, this framework has not made much progress.
