Cambodia and India Expand Trade and Economic Ties

BY BUTH REAKSMEY KONGKEA

The Royal Government of Cambodia and the Republic of India have made a joint announcement that the two-old friend countries will continue to expand the most Indochina Cambodia and India trade and economic ties in the future.

Announcement was made by the visiting Indian President Her Excellency Pratibha Devisingh Patil and His Excellency Dr. Cham Prasidh, Senior Minister and Minister of Commerce of the Kingdom of Cambodia during the India-Business Meeting on September 15th at the Inter-Continental Hotel in Phnom Penh.

The Indian President Pratibha Devisingh Patil said that Cambodia and India are over 2000-friendly countries. The modest level of economic ties between India and Cambodia needed to be broadened. She stated that India and Cambodia had started the process of economic liberalization almost together in the 1990s. She added that the pace of economic growth in both countries has accelerated since then.

“I am certain it is possible to expand the bilateral trade basket, which requires initiatives to create awareness among the business communities of the two countries about the quality and prices of exportable goods and import requirements,” she said during her opening remarks delivered to the Indian-Business Meeting in Phnom Penh.

The President Cambodia figured among an exclusive group of countries to achieve double digit growth in its GDP for a few years in a row, prior to the global economic crisis...India is a trillion dollar economy and is ranked as the fourth largest economy in the world on the basis of purchasing power parity. India is a large, attractive and a growing market.

India-Cambodia economic relations are at a modest level, but there exists much greater scope for expansion, he said, adding that total bilateral trade is approximately 50 million dollars, with pharmaceuticals being the dominating item of India's export basket.

The President went on to say that Indian companies have invested overseas and are looking for opportunities to do more business. Frequent business interactions will help in identifying the many investment opportunities in mining, oil and gas, hydropower, infrastructure, tourism, among others.

She encouraged Cambodian business community to make full use of the investment opportunities provided by India. She also praised Cambodia for exploring ways to improve agriculture productivity, as well as to transform Cambodia into a rice basket and a key rice exporting country in the world.

“We welcome these initiatives of the Cambodian Government and I can assure that India would cooperate and share its experience with Cambodia in achieving this objective,” she said.

She added that Indian experts could also be deputed to Cambodia under bilateral co-operation arrangements to take trade and investment opportunities in the agriculture sector forward. India also has a strong presence of small and medium enterprises.

“I believe that Cambodia is keen to expand its manufacturing base to add value to its local agro-produce and also for other products to meet local demand. These sectors, along with IT and IT-enabled services, could be areas, which are worth exploring,” she said.

She added: “Cambodia's central location in the ASEAN region is useful as India seeks to expand its economic engagement with the region. We are also helped by the fact that for Indians, Southeast Asia is an important travel destination. I would like to mention that India-Cambodia tourism trade has tremendous potential for expansion. I am also telling that a large number of Cambodian tourists travel to India for pilgrimage purposes. Such visits boost our tourism business and people-to-people contacts.”

She emphasized that there exists tremendous scope for developing trade and investment relations between India and Cambodia, which should be realized by business persons of the two countries that have deep civilizational links and a time-tested friendship.

Oknha Dr. Kith Meng, President of the Cambodia Chamber of Commerce, said that Cambodia has a very strong, dynamic population, with an average age of a just 22. This ensures that Cambodia will have a large and growing pool of labor.

He continued to say that with continued investment in infrastructure in areas such as roads, the railways, and electricity, along with a stable political environment, Cambodia’s competitiveness will continue to improve.

“Cambodia has already developed a good track record of rewarding investors. In fact, it comes as a surprise to many to discover that in the decade leading up to the Global Financial Crisis, Cambodia was one of the economic stars of Asia, with GDP growth that was the 7th highest in the world,” he said.

He added that Cambodia has one of the most pro-business environments in Asia.

“While Cambodia had a difficult year in 2009, it is now experiencing a strong rebound in growth in 2010, and I would like to expect growth to be around 5 percent and possibly a little higher. It was encouraging to see the IMF come out and support this view just last week,” he said.

The Indian President and her delegates have officially visited Cambodia from September 13th to 17th. During her state visit, she met with His Majesty the King Preah Karuna Preah Bat Samdech Preah Boromneath Norodom Sihamoni, the Senate President Samdech Chea Sim, National Assembly President, Samdech Heng Samrin, and Prime Minister Samdech Techo Hun Sen.

During the Indian President visit in Cambodia, the two countries have signed two agreements including a Memorandum of Understanding between the two nations’ audit authorities and agreement of the Stung Tasal Water Resources Development Project. India promised to provide US$ 15 million in grant aid to Cambodia in developing on agricultural sector. India also donated US$ 246,000 to a primary school in Kampong Cham province, which was named India-Cambodia Friendship School a few years ago as a mark of growing cordial ties between the two nations.

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