Communiqué. Cambodia, Lao PDR, Myanmar and Vietnam (CLMV),
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1 Communiqué Journal of the Confederation of Indian Industry Special Issue August 2016 RETROSPECT 3 rd India CLMV Business Conclave India CLMV Economic Integration: Developing Regional Value Chains January 2016: Tamil Nadu Cambodia, Lao PDR, Myanmar and Vietnam (CLMV), collectively, is the third largest economy in ASEAN, followed by Indonesia and Thailand. Due to close proximity, India is looking to boost trade and investment with the CLMV region as a part of the Act East policy. The CLMV conclave provides an opportunity for Indian businesses to interact with relevant stakeholders and support the Government s policy. Confederation of Indian Industry (CII) in collaboration with Department of Commerce, Ministry of Commerce, Government of India, hosted the 3 rd successful edition in the series, titled India CLMV Economic Integration: Developing Regional Value Chains in Mahabalipuram, Tamil Nadu, India on 12 th & 13 th of January, India and the CLMV countries are maintaining relatively high GDP growth at a time when the global economy is experiencing significant slowdown. Both regions have also emerged as attractive global investment destinations, complemented by improvements in their respective World Bank Ease of Doing Business ranking. In the Inaugural Session of the conclave, Ms Nirmala Sitharaman, Minister of State for Commerce & Industry (IC), Government of India, observed that India s trade with the CLMV countries, which stood at over $11 billion could increase manifold in the next few years. She pointed out that development of the tri-lateral highway, improved physical infrastructure and connectivity in India s North East Region, and the Government s thrust on port-led development initiatives, will go a long way toward strengthening India- CLMV trade and investment ties. Speaking at the Inaugural Session Mr Sun Chanthol, Senior Minister, Minister of Commerce, Kingdom of Cambodia stated that it was important for India and the CLMV (L-R) Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII); Mr Somchith Inthamith, Vice Minister of Industry and Commerce, Lao PDR; Mr Sun Chanthol, Senior Minister, Minister of Commerce, Kingdom of Cambodia; Ms Nirmala Sitharaman, Minister of State for Commerce & Industry (IC), Government of India; Dr Pwint San, Deputy Minister, Ministry of Commerce, Myanmar; Mr Nguyen Cam Tu, Deputy Minister, Ministry of Industry and Trade, Vietnam; Mr Ravi Capoor, Joint Secretary, Department of Commerce, Ministry of Commerce and Industry, Government of India; Ms Shobana Kamineni, Vice-President, Confederation of Indian Industry, and Executive Vice Chairperson, Apollo Hospitals Enterprise Ltd
2 The two governing principles of this conference, connectivity and economic integration with regional value chains, are crucial to the bilateral ties Ms Nirmala Sitharaman Minister of State for Commerce & Industry (IC), Government of India We are looking for investments in sectors like food processing, tourism, hospitality, solar energy, banking, telecom, among others. We would like to promote Build- Operate-Transfer (BOT) projects with private partners to build airports, ports, etc. Mr Sun Chanthol Senior Minister, Ministry of Commerce, Kingdom of Cambodia We are bringing about policy changes in our laws and regulations to drive our external trade and are committed to making Laos one of the preferred global investment destination Mr Somchith Inthamith Vice Minister of Industry and Commerce, Lao PDR We are stepping up our efforts to foster deeper business collabo rations between the CLMV countries and India. Towards this, we must promote bilateral knowledge sharing and also simplify related laws and policies Dr Pwint San Deputy Minister, Ministry of Commerce, Myanmar Vietnam greatly appreciates India s act east policy declared by PM Modi Mr Nguyen Cam Tu Deputy Minister, Ministry of Industry and Trade, Vietnam countries to network and share industry best-practices and thereby strengthen bilateral businesses ties. India- CLMV bilateral trade and investment ties gain significance from the fact that CLMV countries make up 32% of the ASEAN region and are collectively a large market for Indian products (with a 165-million strong population). He urged Indian companies to invest in the CLMV region and said that CLMV countries have an open investment regime and do not discriminate between foreign and local investors. Mr Somchith Inthamith, Vice Minister of Industry and Commerce, Lao PDR, underlined the growing significance of Lao PDR s investment ties with India. We are bringing about policy changes in our laws and regulations to drive our external trade. CLMV and India should also strive to strengthen the strategic partnership in order to reduce poverty levels in both regions. We are committed to making Laos one of the preferred global investment destination, he asserted. Dr Pwint San, Deputy Minister, Ministry of Commerce, Myanmar, said that Myanmar is ushering in new policies to further liberalise the country s external trade and investment environment. The country has adopted a new Foreign Investment Law to attract greater investments. He made a special mention of sectors like seafoods, manufacturing, engineering, automobiles and chemicals for accelerated bilateral trade exchanges. Mr Nguyen Cam Tu, Deputy Minister, Ministry of Industry and Trade, Vietnam said that Vietnam greatly appreciates India s Act East policy declared by Prime Minister Modi. We hope that in implementing this policy, India will put greater stress on action and specific projects to integrate more with the Asian region with priorities on CLMV countries. 2
3 Ms Shobana Kamineni, Vice-President, CII and Executive Vice Chairperson, Apollo Hospitals Enterprise Ltd, highlighted the opportunities for accelerated India-CLMV trade and investment ties in areas like agriculture, mining and minerals, oil and gas, infrastructure development, services (including manpower training), and SME sector. The Conclave comes at an opportune time when a slew of reforms have been announced by the Government of India. India needs to deepen the relationship with the CLMV countries in sectors such as agriculture, mining, healthcare, and energy (hydro and solar energy) said Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII). He added that expansion of India-CLMV bilateral trade and business ties will create millions of job opportunities for people in both the regions. Mr Ravi Capoor, Joint Secretary, Department of Commerce, Ministry of Commerce and Industry, Government of India, in the inaugural session stated that the Ministry has taken a pioneering initiative to launch the CLMV Fund and added that he expects large Indian investments to flow into the CLMV region. He underlined the need to address issues like inadequate physical connectivity, banking linkages, movement of people between the regions. Background paper Act East: Enhancing India s Engagements with Cambodia, Lao PDR, Myanmar, Vietnam (CLMV) was released by EXIM bank in the inaugural session. At the plenary session Physical Connectivity between India & CLMV Gaps & Challenges: The Way Forward, Mr Niraj Verma, Joint Secretary, Ministry of Road Transport & Highways, Government of India said that The new roadways between India, Bangladesh, Bhutan and Nepal will create a raft of new trade opportunities for India and CLMV countries. The India, Thailand, and Myanmar tri-lateral highway is also crucial to the growth of India- CLMV trade ties. Moreover, with the signing of the Motor Vehicle Agreement between India, Bangladesh, Bhutan and Nepal, there is added scope for increasing passenger traffic between all these countries he said. Mr Rabindra agarwal, Joint Secretary, Ministry of Shipping, Government of India, added that efficiency of ports and port-led development are key to greater regional trade. We are benchmarking our ports with the best in the world, he said. Mr Gautam Mukhopadhaya, Ambassador of India to Myanmar, further added that India could attract a large number of tourists from CLMV countries to Gaya since people in CLMV countries are predominantly Buddhist. Direct flights are key to greater people-to-people contacts between India and CLMV countries. At the plenary session on Catalysing Investment & Manufacturing in CLMV Region: Financial Imperatives, Mr Tran Quang Huy, Director General of South West Asia and Africa Department, Ministry of Industry and Trade, Vietnam, spoke about the need for investments in logistics infrastructure to enhance physical connectivity between India and the CLMV countries. He added that trade agreements like FTAs will go a long way to drive bilateral trade flows. In his opening remarks Mr Yaduvendra Mathur, Chairman & Managing Director, Export-Import Bank of India, said that India-CLMV bilateral trade is waiting to take off. EXIM Bank of India could play a key part in the trade expansion. The bank has sufficient credit availability and raises $4-6 (L-R) Mr Rabindra Agarwal, Joint Secretary, Ministry of Shipping, Government of India; Mr Gautam Mukhopadhaya, Ambassador of India to Myanmar; Mr Niraj Verma, Joint Secretary, Ministry of Road Transport & Highways, Government of India; Mr Tin Maung Htun, Chairman, KBZ Group Aviation Business Advisory Committee, Myanmar 3
4 billion every year in world markets. EXIM Bank of India has helped over a thousand Indian companies to invest overseas. We are looking to leverage large borrowings and encourage project exports from India, he said. Mr Kiengkhammanh Khottavong, Deputy Director General, Foreign Trade Policy, Ministry of Industry and Commerce, Lao PDR, said that India has strong capabilities in the pharmaceuticals sector and therefore we seek India s expertise in this space to strengthen our pharmaceutical industry. Lao PDR is also reaching out to India for investments and collaborations in the realms of IT, tax collection systems, e-commerce, tourism, textiles, rubber manufacturing, processed products, automotive production, agriculture, etc. Prof. aung Tun Thet, Economic Advisor to President & Member, Myanmar Investment Commission, Myanmar, said that Myanmar shares a common history with India and business communities from India have played a vital role in financing businesses in Myanmar. He pointed out that Myanmar is beset with a weak financial sector including banking, finance and insurance. We invite Indian banks to establish their operations in Myanmar which in turn will bring more Indian investors and companies to our country. Ms Rajshree Pathy, Chairperson, CII Southern Region and CMD, Rajshree Sugars & Chemicals Limited, mentioned in the Plenary session on India-CLMV Regional Value Chain: Identifying Sectoral Potential that the CLMV region has witnessed a marked rise in investments in many sectors. The CLMV region could be a key market for Indian manufactures. Transnational companies like Nike and Adidas have set up their businesses in these regions. Mr Tran Hong Quan, Vice-Chairman, People s Committee of Cau Mau Province, Vietnam, said that Vietnam could provide raw materials for India s food processing industry. He added that Vietnam promotes eco-tourism as acknowledged by UNESCO - and welcomed Indian investments in this area. Mr aung Soe, Deputy Director General, Department of Trade Promotion & Consumer Affairs, Ministry of Commerce, Myanmar, said that Myanmar could leverage its strategic location to draw more investments into the country. Improved overland connectivity and sea links are vital to bilateral investment flows. Currently less than 5% of the trade is taking place via sea. There is immense scope for pushing up maritime trade, he said. Mr N K Ranganath, Managing Director, Grundfos Ltd, pointed out that could share with India some of its best farm practices. Addressing the Valedictory Session, Mr anil Wadhwa, Secretary (East), Ministry of External Affairs, Government of India, said that greater physical and digital connectivity between the two regions is the key to accelerated bilateral (L-R) Mr Tran Quang Huy, Director General of South West Asia and Africa Department, Ministry of Industry and Trade, Vietnam; Mr Yaduvendra Mathur, Chairman & Managing Director, Export-Import Bank of India; Mr Sun Chanthol, Senior Minister, Ministry of Commerce, Kingdom of Cambodia; Prof. Dr. Aung Tun Thet, Economic Advisor to President & Member, Myanmar Investment Commission, Myanmar; Mr Kiengkhammanh Khottavong, Deputy Director General, Foreign Trade Policy, Ministry of Industry and Commerce, Lao PDR 4
5 (L-R) Mr Por Koung, CEO, Orachel Organic Farm, Cambodia; Mr Debasish Mallick, Deputy MD, EXIM Bank of India; Mr Aung Soe, Deputy Director General, Department of Trade Promotion & Consumer Affairs, Ministry of Commerce, Myanmar; Ms Rajshree Pathy, Chairperson, CII Southern Region and CMD, Rajshree Sugars & Chemicals Limited; Mr Tran Hong Quan, Vice-chairman, People s Committee of Cau Mau Province, Vietnam; Mr Htun Htun Naing, Chairman, Blue Ocean Operating Management Co Ltd trade and investment flows. He said that there is significant scope for increasing India s bilateral trade with the CLMV countries which currently make up 16% of India s bilateral trade with ASEAN countries. He added that the enhancement of the India-ASEAN Science & Technology Development Fund should also lead to development of low cost technologies that benefit micro, small and medium enterprises (MSMEs) in both regions. The Valedictory Session was also addressed by Mr Somchith Inthamith, Vice Minister of Industry and Commerce, Lao PDR, Dr Pwint San, Deputy Minister, Ministry of Commerce, Myanmar, Mr Tran Quang Huy, Director General of South West Asia & Africa Department, Ministry of Industry and Trade, Vietnam, and Mr Sourn Phearith, Deputy Director General for International Trade, Ministry of Cambodia. The CLMV ministers called for deeper bilateral SME exchanges. The ministers also suggested that the next edition of the Conclave may facilitate more B2B meetings and P2P interactions. Country specific sessions on Cambodia, Myanmar and Vietnam highlighted the investment and trade opportunities and initiatives taken by the respective government to facilitate trade. (L-R) Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII); Mr Sourn Phearith, Deputy Director General for International Trade, Ministry of Cambodia; Mr Anil Wadhwa, Secretary (East), Ministry of External Affairs, Government of India; Mr Somchith Inthamith, Vice Minister of Industry and Commerce, Lao PDR; Ms Nirmala Sitharaman, Minister of State for Commerce & Industry, Government of India; Dr Pwint San, Deputy Minister, Ministry of Commerce, Myanmar; Mr Ravi Capoor, Joint Secretary, Department of Commerce, Ministry of Commerce & Industry, Government of India; Mr Tran Quang Huy, Director General of South West Asia & Africa Department, Ministry of Industry and Trade, Vietnam 5
6 Facts and Figures 5 Ministers & 4 Ministerial Delegations 120 Delegates from CLMV & 150 Indian Delegates 80+ B2B Meetings 9+ Sessions 5 Provincial Delegation from Vietnam Key outcomes Expansion of India-CLMV sectoral partnerships in areas like agriculture, mining, healthcare, and energy (hydro and solar energy) Indian Government will develop the North-Eastern Region for robust physical connectivity and economic exchanges with the CLMV countries Promote India-CLMV SME partnerships Improve air links between India and CLMV countries Facilitate integration of the India-CLMV partnership with global value chains. Accelerate efforts toward knowledge sharing and skill development Banking linkages to drive Indian investments in CLMV Cambodia Cambodia has sought Indian investments in food processing, tourism, hospitality, solar energy, banking, and telecom sectors, expertise in micro-financing mechanisms for farmers and smaller businesses, and private participation in BOT projects to build airports, ports etc Cambodia has created an investor-friendly regime Lao PDR Lao PDR invited Indian investments and expertise in pharmaceutical manufacturing, IT, tax collection systems, e-commerce, tourism, textiles, rubber manufacturing, processed products, automotive production, and agriculture Myanmar Priority sectors for investments in Myanmar are agriculture, tourism, health, education, energy, machinery, garment manufacturing, and banking and finance 3 SEZs and 19 industrial zones in the country have paved the way for more investments and job opportunities in Myanmar Myanmar is fast-tracking development of SEZs and has a highly investment-friendly policy regime Vietnam India and Vietnam are exploring ways to improve direct air connectivity Vietnam seeks investments in thermal and wind power projects India and Vietnam have deepened bilateral defence cooperation - in terms of naval composite training package for Vietnam, ship repairs, ship visits Vietnam called for investment in logistics infrastructure and recommended bilateral agreements like FTA to expand trade flows our Partners Kirloskar Brothers Ltd. MyAsia Consulting EXIM Bank of India Tata Sons 6
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8 Published by Confederation of Indian Industry, The Mantosh Sondhi Centre, 23, Institutional Area, Lodi Road, New Delhi August
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