Scope seen for greater economic engagement with Cambodia, Laos & Myanmar

Scope seen for greater economic engagement with Cambodia, Laos & Myanmar

Scope seen for greater economic engagement with Cambodia, Laos & Myanmar

There is huge scope for greater economic engagement with Cambodia, Laos and Myanmar, according to CII report “Enhancing LDCs Market Access into India – Case Studies of Cambodia, Lao PDR and Myanmar”. The case studies cover an overview of economic and bilateral relations, trade trends of Cambodia, Lao PDR and Myanmar, domestic economic and trade policies, top items traded between these three countries and India, and connectivity and how trade in services can be enhanced.

The case studies also cover non-tariff barriers, FDI trends, Indian investments in these countries and recommendations for increasing the economic integration between India and these three countries. The purpose of the studies is to examine where trade and economic relations between India and these three countries stand, what are the overall trade trends and how greater trade and economic integration can be facilitated.

The case studies show that despite consistent growth, trade with India and the world remains low for Cambodia, Laos and Myanmar. The study recommends that these countries must leverage their LDC status and use India’s Duty-Free Tariff Preference to export in Indian market. There is potential for increase in trade as these countries are fostering growth within their countries and increasing their engagement with the world. India being a close neighbour, apart from historical ties, can also support the policy endeavours of Cambodia, Laos and Myanmar.

In the recent past, to expand investment opportunities for Indian companies in the CLMV Countries, the government had created a Special Purpose Vehicle (SPV). The aim of the SPV is to facilitate more Indian investments in the CLMV region and, in turn, increase their presence in these countries.

The study notes the following:

Cambodian goods such as garments, shoes and bicycles are exported largely through Global Value Chains (GVCs). Cambodian firms import raw materials for assembling into finished products for export. In case of agricultural exports, most export-ready products are unprocessed. Therefore, there is significant scope for value addition through investments in processing facilities and developing capacities to produce the inputs required for final products.

There are several Laos PDR exports that have potentially large markets in India. These include agricultural equipment like mechanical valves, instruments and apparatus for physical or chemical analysis, steam boilers, and non-timber forest products like gum. Initiatives to promote these markets would benefit both countries.

There are several other sectors where closer ties between Laos PDR and India can mutually benefit each other. Refined copper and copper alloys are one of India’s top exports, while one of Laos’ major exports to India is copper ores and concentrates. Similarly, India can take advantage of Laos’ emerging jewel mining industry which is India’s third largest export by value. Laos’ largest import is petroleum oils (not crude), which is India’s largest export in value terms.

India’s import of wood and wood-related products is dependent on Myanmar. It is, therefore, imperative that investments be focused on increasing capacity for existing downstream wood products (such as wood in the rough) and investments into developing upstream value-chain linkages in the industry.

Myanmar has among the largest gas reserves in the world, estimated to be more than 90 trillion cubic feet, and should be one of the priority areas for investment by Indian companies, said a release.

Manjula

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