Currently they are part of the ASEAN bloc but officials added that their socio-economic conditions and proximity are more suitable for Indian business environment and the opportunities could be exploited in mutual benefit to through these one- to one agreements rather than through a combined approach. India has gone ahead with separate pacts with Singapore and Malaysia even with an ASEAN pact.
To this effect, the government officials accompanied by business delegations from each country have started visiting the countries. According to officials, these are preparatory arrangements towards clinching a bilateral agreement.
More From This Section
They also mentioned that such visits are more of a preparation in case the RCEP (Regional Comprehensive Economic partnership) does not work out. Regional Comprehensive Economic Partnership (RCEP) is a Free Trade Agreement (FTA) scheme of the 10 ASEAN Member States and it’s FTA Partners – Australia, China, Japan, Korea and New Zealand to be concluded by the end of 2015. It includes more than 3 billion people, has a combined GDP of about $17 trillion, and accounts for about 40 percent of world trade.
AS per a study by Export and Import Bank of India, even when most of these countries share boundaries and close proximity to India, China, South Korea and Thailand have major share in foreign investments into these CLMV region which in 2012 aggregated to $ 12.5 bn , 11 per cent of the total inflows into the ASEAN region. On the other hand, India’s approved direct investments in joint ventures and wholly owned subsidiaries in the CLMV countries during April 1996-March 2012 amounted to around 700 million with bulk flows to Vietnam.
For Cambodia in particular, areas of greater export potential are knitted fabric, machinery and instruments, vehicles, electrical and electronic equipment. Sugar and sugar confectionary, plastics, rubber articles , articles of iron and steel, pearls and precious stones and iron and steel etc. For LAO PDR, mineral fuels, oil, aircraft, space craft, beverages offer added opportunities over and above the areas with export potential in Cambodia. Similarly, for Myanmar, added areas are animal and vegetable fat, ships, boats, salt, sulphur, optical and technical, medical apparatus, paper, manmade filaments, furniture , lightings, organic chemicals, footwear, .
In its recommendations, the study has identified five approaches to develop the bilateral investments into each of these countries. Export of agri related machinery and equipments, development and exploring mineral sources with buyback arrangement, development of highways, roadways, railway networks and power systems are some of the areas proposed for enhancing commercial relations and manpower development. For manpower development, the suggestion is for tie up of the CLMV countries with entrepreneurship development of India, Ahmadabad, National Small Industries cooperation, New Delhi towards human capability and develop SME sector in their respective countries. EXIM bank itself sees a lot of opportunity in SME financing which at present it is doing through line of credits, project exports, finance for joint ventures, financing through institutional linkages to trade bodies exploring opportunities in these countries.
Besides, government promoted projects, the study has also suggested Indian companies could participate in multilateral funded projects as World Bank and Asian Development Bank are active ion funding projects in CLMV region.