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Paper on Rs 500 cr Fund for CLMV countries to be ready in a month

Proposal is seen as key enabler for Indian firms to set up factories in Cambodia, Myanmar, Laos and Vietnam using SPV route

BS Reporter  |  Chennai 

Nirmala Sitharaman
Nirmala Sitharaman | Photo: Kamlesh Pednekar

Union Minister of State, Commerce and Industry (Independent Charge), Nirmala Sitharaman, said that the ministry will submit the proposal for a Project Development Fund to boost investments in Cambodia, Laos, Myanmar and Vietnam (CLMV countries) by next month.

Addressing the third India-CLMV Business Conclave on "India-CLMV Economic Integration: Developing Regional Value Chains", organised by the Department of Commerce, Ministry of Commerce and Industry, along with Confederation of Indian Industry (CII), Sitharaman said that soon the proposal "will reach the cabinet, hopefully in the next month and get a clearance."

The proposal, in order to have better integration in the regional value chains, had been announced in the Budget 2015-16 by the Union Finance Minister Arun Jaitley, for a fund of Rs 500 crore. The proposal is being seen as an important instrument through which, after feasibility has been established, Indian industries can be handheld through a special purpose vehicle in each one of these countries -- Cambodia, Myanmar, Laos and Vietnam -- to establish their manufacturing units in these countries.

This is required so that the Indian manufacturers does not confine themselves only to producing in India, but would be able to better utilise the endowments and skilled manpower which are available, in these countries, she added.

India's commitment to the trilateral highways and also the projects happening in the North East would say that the country is looking at South East Asia and we are particularly focusing these four countries in the region.

"We are not just looking at trilateral highways, but understanding how the port connectivity can be improved.

Not just the pilot happened about a couple of months, but we are very keen to open up our ports so that the traditional link between the sea ports can be imporved rather than going through a circuited manner,"she added.

She said that India is in talks with Myanmar to develop a connectivity through the Chennai Port.

Connectivity, either by road or sea is a critical thing and when we are talking about road, it is not just roads, but also air connectivity. There is possibility to bring down the time taken to cover the distance, if only there is direct connectivity.

A study by the study centre attached with the Ministry of External Affairs has recognised the immense possibilities that exist between India and these four countries. The finding was, there is a potential exists of an additional export expansion to the tune of $100 billion with these countries and if only the country is able to focus through Special Economic Zones, Export Processing Zones, she said.

The need exists for Indian Banks to go over to these countries and establish their overseas branches there so that the facilitation between exporters and importers will be much better organised by way of their presence.

With the Prime Minister's most ambitious intiatives, Make in India, Start Up India and ease of doing business, when the World Bank will come up with its next report, we think we will be much better than the the last ranking, she added.

Ravi Capoor, joint secretary, Department of Commerce, said that the country would see a tangible engagement with the CLMV countries would be more tangible by the end of 2016, with the physical connectivity measures are in progress.

During the past ten years, India's total trade with CLMV countries has grown from $1.1 billion in 2004 to $11.9 billion in 2014, an increase of more than 10 fold.

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First Published: Tue, January 12 2016. 14:38 IST