India & CLMV
In line with the New Foreign Trade Policy (2015-20) announced on 1st April, 2015, India has set up a Rs 500-crore Project Development Fund (PDF) for...
In line with the New Foreign Trade Policy (2015-20) announced on 1st April, 2015, India has set up a Rs 500-crore Project Development Fund (PDF) for Cambodia, Laos, Myanmar, Vietnam (CLMV) countries to facilitate Indian Investment & broaden manufacturing base of Indian companies in the region.
Under the ‘Act East’ policy, the Government of India endeavours to cultivate extensive economic and strategic relations in South-East Asia. In order to catalyse investments from the Indian private sector in this region, a Project Development Company will, through separate Special Purpose Vehicles, set up manufacturing hubs in CLMV countries, namely, Cambodia, Myanmar, Laos and Vietnam. India’s trade with these countries is approximately 16 per cent of its overall trade with ASEAN.
However, India’s foreign direct investment (FDI) in the CLMV countries is mainly concentrated in Vietnam, involving more than 90 projects with a total investment of $ 1 billion. CLMV countries have a unique position in the regional value chains and offer a gateway for market access to China/EU and other markets due to various trade agreements.
The key advantage of positioning India on the regional value chains is securing on a long term basis, a dedicated market for Indian raw materials and intermediate goods besides a dedicated source for inputs and raw materials for Indian industry. The PDF shall benefit India's industrial community for business expansion, and to maintain cost competitive supply chains, besides integrating with global production networks.
Last month, Commerce Minister Nirmala Sitharaman said that trade with the CLMV countries grew from $1.5 billion to more than $10 billion in the last 10 years and expressed hope that India would be able to partner in more trade initiatives with these countries to develop a strong India-CLMV vertical within the ASEAN market.
The Minister indicated that there are clear verticals for India to facilitate trade with these countries like, organic agriculture produce from Myanmar, value added products from coffee& pepper produce of Vietnam, two & three wheeler exports to Lao PDR etc. She highlighted that these countries can take advantage of the tremendous scope in India on skill resources across various sectors.