Potential to double India-Latin America & Caribbean trade volume from US$ 42 billion in next five years: Nirmala Sitharaman
Minister of State for Commerce and Industry Nirmala Sitharaman on Thursday said that Culture, Commerce and Connectivity will be the hallmark of India's relation to the CLMV countries, namely Cambodia, Laos, Myanmar and Vietnam.
Sitharaman, who was speaking at the second India - CLMV Business Conclave, "ASEAN - India Economic Engagement: The Way Forward" organized by CII and the Department of Commerce, Ministry of Commerce and Industry, said that now "India's Look East Policy has become very sharp focused and it is "Act East" Policy."
She said that there is a need for 'greater and accelerated engagement across the globe with East Asia'.
"We are very keen to open up the North-East part of India; open up the economy, improve on its connectivity with the rest of the East and therefore look at India's North-East as threshold to our Act East Policy," she stressed.
Sitharaman also mentioned that the threshold to the CLMV region was north-east and the government was taking steps to promote the development of this region as well as its connectivity to the CLMV countries.
She pointed out that India-CLMV trade was concentrated in only a few items and there was tremendous scope to deepen and widen the trade basket.
Sitharaman mentioned that several sectors hold potential for trade and investment between India and the CLMV countries.
"These included skill development, agricultural products, manufacturing, project exports, and energy among others," she said.
Sitharaman said that in 2009, the Free Trade Agreement (FTA) on goods had been signed (with ASEAN) and because of that and through that trade between ASEAN and India have been reaching about USD 80 billion level.
"We hope by 2015 it will touch USD 100 billion and get doubled by 2022. So there is lot of work, there is a lot of scope," she added.
Meanwhile, Commerce Secretary Rajeev Kher in his address stated that India's trade with the CLMV region amounted to USD 13 billion in 2013-14. Much of that trade, he observed, was with Vietnam. He felt that there was tremendous scope to expand trade relations with the other countries in the region.
Kher highlighted the need to establish regional and sub-regional value chains in order to maintain and sustain long-term economic relationship with the region. He stated that India industry could partner with businesses in the CLMV countries to reach out to newer markets. He felt that by joining forces, Indian and CLMV industry could take advantage of the trade agreement architecture that the CLMV countries have to access newer markets.
The commerce secretary stated that the government was proposing to set up an SPV to promote investments by Indian business in CLMV region. According to him, Indian industry could take advantage of the Lines of Credit and Buyers Credit schemes to promote project exports into the CLMV countries.
CII President Ajay Shriram stated that connecting the CLMV countries with India can yield numerous benefits.
"These include larger markets which can bring about economies of scale in production and enhance competitiveness. Integration of markets can facilitate the movement of production networks and attract more foreign direct investment (FDI) along with the benefits of knowledge and technology transfer and opportunities to connect to regional and global supply chains," he said.
He pointed out that sectors such as skill development, agricultural products, manufacturing, project exports, and energy hold tremendous potential to boost trade and investment between India and the CLMV countries.
According to Deputy Chairman, CII (Western Region) and Chairman and Managing Director, Kirloskar Brothers Ltd., Sanjay Kirloskar, India and CLMV, as fast developing Asian regional economies, were facing identical political and business environment in the region. The two regions would certainly benefit by cooperating with each other in the emerging global economic order.
Director General of CII Chandrajit Banerjee welcoming the participants earlier stated that the Indian industry looks forward to adoption of Regional Comprehensive Economic Partnership.
He felt that this would help promote greater regional integration with ASEAN and in particular the CLMV countries.