India seeks gateway to ASEAN
India seeks gateway to ASEAN
Indian business leaders see strong potential to develop trade and investment ties with Cambodia given its liberal investment climate and strong record of economic growth, and many recognise the Kingdom as a potential link in their quest to access ASEAN’s 600-million-strong consumer market, trade representatives from both countries said this week.
“Cambodia is an excellent country to come and invest in because no other country in the region allows so many foreign companies to open and set up their businesses, which is something that is very attractive to Indian firms,” said Sandeep Majumdar, president of the Indian Chamber of Commerce in Cambodia (ICC).
His comments came on the sidelines of an ICC-organised seminar on Wednesday evening that discussed the potential of ASEAN integration and India’s role in investing in Cambodia. About 200 government officials and businessmen attended the event.
Majumdar said improved access to information on the commercial possibilities for Indian and Cambodian companies had been crucial in developing economic ties between the two countries.
“We are having more and more trade fairs for Indian and Cambodian companies, and I think this is part of the reason we are seeing so many different companies starting to develop the various Cambodian commercial sectors,” he said.
According to Majumdar, Indian investment is becoming more diversified and is building on the established presence of automobile and pharmaceutical companies in Cambodia. Within a couple of years, he expects to see investors broaden paths into the Kingdom’s renewable energy sector, as well as construction and real estate.
“There is an abundance of land available in Cambodia that you cannot find in many other countries,” he said. “If you look at places like Singapore or Malaysia, they are already quite developed, whereas Cambodia presents a lot of opportunity as it is still an emerging economy.”
A panel discussion during the seminar explored ways in which Cambodia could incentivise Indian foreign direct investment, and how ties between the two countries could provide India with a gateway to the ASEAN market.
Indian Ambassador to Cambodia Naveen Srivastava said bilateral trade has already surpassed $189 million this year, largely due to the rapid growth of Cambodian exports. He said Indian trade pathways were expanding beyond physical goods and into service sectors.
“The potential to increase trade between India and Cambodia is certainly there for agro-products, pharmaceuticals, engineering goods or IT services, but also for entirely new categories of service exports such as health, tourism and education,” he said. “What we need is more encouragement from the Cambodian businesses to look at what their Indian counterparts can offer.”
India signed a Bilateral Investment Treaty (BIT) in July. However, Cambodia has yet to ratify the mutual investment protection agreement, which if enacted would accelerate bilateral trade and investment further, the ambassador said.
Sok Siphana, an adviser to the Cambodian government, said Indian investors have recognised Cambodia’s strategic location, which makes it an ideal destination for cross-border manufacturing and assembly processes, and benefits from no-tariff entry to other ASEAN member states.
“The vision of a post-2015 ASEAN is that Cambodia is positioning itself to be part of the regional supply chain,” he said. “This is where India matters a lot because there are so many areas of industry in India, such as the tech sector, engineering and agricultural machinery, that could benefit from integration into the cross-border ASEAN community.”
ASEAN aims to increase bilateral trade with India to $200 billion in 2022, from the current $58 billion, Siphana said.
He said there was potential to develop Cambodia as a gateway for Indian products to access ASEAN markets.
“I think we could begin to see Indian tractors being assembled here in Cambodia and then sold to Laos and Myanmar, for example,” he said.
