India - Cambodia Bilateral Trade and Investment Relations Commercial

India - Cambodia Bilateral Trade and Investment Relations

India - Cambodia Bilateral Trade and Investment Relations

Overview

Cambodia has maintained its high growth at the average rate of 7 percent for decades where agriculture, construction, tourism and garment & footwear sectors are the main sources of such robust growth. Cambodia’s overall total trade reached US $ 25.55 billion in 2017. Its exports valued at US $ 11.27 billion in 2017, increased 11.96 percent as compared to 2016 while imports increased to US $ 14.28 billion, changed 15.47 percent. Cambodia imported significantly from Asia up to 92.74 percent of total imports in 2017. Key imported commodities are vehicles, petroleum products, motorbikes, and other consumable goods. The first export destination is European continent which accounts for 40.22 percent followed by Asia which accounts at 28.62% of total exports in the same year. Garment, footwear, rubber, textiles, fish products and other agricultural products are top exports to the globe.

Though economic interaction between India and Cambodia are limited. However, trade and investment figures have changed positively in recent years. India exported US $ 120.27 million worth of good to Cambodia, showing 9.32 percent increasing in 2017 while imports valued at US $ 48.02 million, increasing by 11.33 percent at the same year. Total trade reached US $ 168.02 million in 2017, increased 9.71 percent as compared to 2016.

To promote trade and business relations, Hon’ble Minister of Commerce, Trade and Civil Aviation, Sri. Suresh Prabhu, visited Cambodia in May 2018 to participate in Indian - CLMV Business Conclave in Phnom Penh and held bilateral meeting with Cambodian Prime Minister and Minister of Commerce, H.E. Pan Sorasak on trade improvement and connectivity. India and Cambodia jointly organized some events in Cambodia such as 5th India-CLMV Business Conclave in May 2018 and Incredible India Road Show in May 2018. Besides organizing events in Cambodia, Cambodian government official and business delegation were invited to participate in Advantage Assam-India’s Expressway to ASEAN in February 2018, FICCI Higher Education Summit, Saurastra Vepar Udyog Maha Mandi (SVUM) in July 2018, and other mega events and Expo in India.

On bilateral investment front, India invested US $ 19.8 million in 2016. There are few Indian companies which are investing in multiple sectors including Mesco Gold, Bajaj Cambodia, and Sram Mram Limited. The Government of India is planning to create a Special Purpose Vehicle for US $ 68.27 million fund to increase Indian economic presence in CLMV. We are negotiating India-Cambodia Bilateral Investment Treaty. Cambodia and India have signed agreements on cooperation in the areas of but not limited to agriculture, scientific and technological cooperation, entrepreneurship development and tourism. The economic relations between the countries are also facilitated by the Mekong-Ganga Cooperation and the ASEAN-India Free Trade Agreement.

1. India-Cambodia Merchandise Trade

India - Cambodia trade has been growing steadily in the last few years. The total trade between India and Cambodia stood at US $ 188.02 million in 2015, which indicated a 10.66% increase over the corresponding figure for 2014 (total trade US $ 169.90 million). Of this, exports from India were US $ 145.66 million (a decrease of about 5% over 2014) and the imports from Cambodia were US $42.36 million (an increase of 157.66%). While the overall trade has shown a continuous trend of growth, the trade basket remains very narrow. Indian exports are dominated by pharmaceuticals, yarn, leather and some engineering items. Cambodian exports are mostly primary products. However, her exports declined in 2016. Indian exports were US $ 110.01 million and Cambodian exports to India were US $ 43.13 million. Indian exports showed a decline of -24.47% and the Cambodian exports registered 1.81% growth. The drop in Indian exports in 2016 is largely attributable to drop in exports of Oil Meals, Cotton and other yarns (possibly due to supply/demand linked to regional apparel manufacturing chains) and milled products. The was a positive change in total trade volume from 2016 at US $ 153.14 million to US $ 168.02 million in 2017 with 9.71% growth. Potential items of exports from India could include machinery, auto parts (two/three wheelers), drugs and pharmaceuticals, agricultural products including agricultural product processing industry, leather and leather products.

Figure 1: India-Cambodia Trade Volume (2015-2017)

Trade with India

2015

2016

2017

Total Trade

188.02

153.14

168.02

Exports

145.66

110.01

120.27

Import

42.36

43.13

48.02

Growth %

-

(18.54)

9.71

Source: The Directorate General of Commercial Intelligence and Statistics, Ministry of Commerce and Industry, Government of India

Figure 2: India Top 10 Items of Export to Cambodia (Jan-Dec 2017)

(By principle commodity code)

Pc Code

Commodity

Value (US$)

H8

DRUG FORMULATIONS, BIOLOGICALS

39047035

Q3

MANMADE YARN, FABRICS, MADEUPS

13936839

P8

COTTON FABRICS, MADEUPS ETC.

13154088

O5

MOTOR VEHICLE/CARS

7315983

F8

FINISHED LEATHER

7149855

B9

OIL MEALS

5013006

N6

INDL. MACHNRY FOR DAIRY ETC

3193006

D4

MILLED PRODUCTS

2468319

O8

TWO AND THREE WHEELERS

1943512

P9

OTH TXTL YRN, FBRIC MDUP ARTCL

1622549

Source: The Directorate General of Commercial Intelligence and Statistics, Ministry of Commerce and Industry, Government of India

Figure 3: India Top 10 Items of Import to Cambodia (Jan-Dec 2017)

(By principle commodity code)

Pc Code

Commodity

Value (US$)

E5

NATURAL RUBBER

10316190

Q8

RMG MANMADE FIBRES

9444817

D5

MISC PROCESSED ITEMS

9277470

Q6

RMG COTTON INCL ACCESSORIES

4437731

N2

BICYCLE AND PARTS

2610215

G2

FOOTWEAR OF LEATHER

2592836

K2

OTHER WOOD AND WOOD PRODUCTS

2206480

R1

RMG OF OTHR TEXTLE MATRL

1808783

M8

MEDICAL AND SCIENTIFIC INSTRUM

1119950

H5

BULK DRUGS, DRUG INTERMEDIATES

1005457

Source: The Directorate General of Commercial Intelligence and Statistics, Ministry of Commerce and Industry, Government of India

2. India – Cambodia Investment

With a positive growth, Foreign investment inflow to Cambodian is expanding continuously. According to The Council for the development of Cambodia, total foreign investment reached US$3.6 billion in 2016 and was 24% increase from 2012 to 2016. In the same year, India investment reached US$19.8 million (0.55%) out of overall $3.6 billion and rank in top10 for foreign investor in Cambodia. The major investment from India are in the field of agricultural machinery, power, construction and mining.

(Source: The Council for the Development of Cambodia)