The project envisions the construction of a multi-modal Kaladan transport corridor, which will allow port access to northeastern states, bypassing Bangladesh. It includes the upgrading of the Sittwe port and the Kaladan waterway as well as the construction of a road from Setpyitpyin (Kaletwa) to the India-Myanmar border at a cost of 5.3 billion rupees. India will spend 100 million dollars as well on projects overruns whereas Myanmar will contribute 10 million dollars and land for the project.
There have already been six rounds of talks since 2003 on the project, and both countries have initialled the draft framework agreement on the project, draft protocol on facilitation of transit transport, draft protocol on financial arrangements and draft protocol on joint maintenance and administration.
Myanmar plays a key role in India's energy security road map as it has several oil and gas fields. Last September, Petroleum Minister Murli Deora visited the country and signed a number of agreements.
India also looks towards Myanmar to control insurgents in the northeast who often slip across the border to set up camps when pursued by Indian security forces.