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 economic growth at the average rate of 7.5 percent in 2018, compared to 7.0 percent in 2017. Significant sectors that have contributed to economic growth of the country are Agricultural, Construction, Tourism and Garment & Footwear sectors. Cambodia’s overall total trade reached US $ 27.51 billion in 2018. Its exports valued at US $ 12.29 billion in 2018, increased 14.00 percent as compared to 2017 while imports increased to US $ 15.22 billion, changed 16.90 percent. Cambodia imported significantly from Asia at the average of 91.23 percent of total imports in 2018. Key imported commodities are vehicles, petroleum products, motorbikes, and other consumable goods. The main export destinations are the United States and European Continent. Cambodia’s export to U.S increased at 29 percent in 2018, compared to 4.6 percent in 2017 while to EU market also rose, growing at 12.9 percent in 2018, compared to 9.3 percent in the same year. Garment, footwear, rubber, textiles, fish products and other agricultural products are top exports to the globe.

Although economic interaction between India and Cambodia is limited, the trade and investment figures have changed positively in recent years. India exported US $ 178.24 million worth of goods to Cambodia, showing 48.19 percent increasing in 2018 while imports valued at US $ 48.45 million, increasing by 0.90 percent in the same year. Total trade reached US $ 226.69 million in 2018, increased 34.69 percent as compared to 2017.

To promote trade and business relations, Hon’ble Minister of Commerce & Industry and Civil Aviation, Shri. 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, H.E. Hun Sen 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. Moreover, H.E. Pan Sorasak attended the 4th India-ASEAN Expo and Summit in March 2019 with Cambodian delegation in New Delhi.

On bilateral investment, India invested US $ 19.8 million in 2016. However, for the last two years, there is no exact figure, showing the volume of investment between India and Cambodia. There are few Indian companies which are investing in multiple sectors including Mesco Gold, Bajaj Cambodia, and Sram Mram Limited. The Government of India has planned to create a TVS to increase Indian economic presence in CLMV. India’s trade with CLMV countries has experienced significant growth over the years, from US$460 million in 2000 to $4.97 billion in 2004 and $14.5 billion in 2017. Currently, India is the largest trade partner of CLMV nations in South Asia. 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

Even though, India - Cambodia trade has been growing steadily in the last few years. In 2016, the total trade between India and Cambodia went down at US $ 153.15 million in 2016, which indicated 18.55% decrease over the corresponding figure in 2015 (total trade US $ 188.03 million). Exports from India were US $ 110.02 million (a decrease of 24.47% over 2015) and the imports from Cambodia were US $43.13 million (an increase of 1.82%). In 2016, the overall trade showed a decline, but the trend positively stood in 2017. Indian exports have been dominated by pharmaceuticals, yarn, leather and some engineering items. Cambodian exports are mostly primary products. In 2017, there has been approximately 10% overall growth whereas in 2018 there has been growth of approximately 35%. The increase of Indian exports in 2017 & 2018 is largely derived from exports of motor vehicle, drug formulation, biological products, fabrics, finished leather etc. Business engagement between Indian and Cambodian traders and investors has increased during past few years and we expect to witness enhanced growth in trade in years to come.

Figure 1: India-Cambodia Trade Volume (2016-2018)

Trade with India

2015

2016

2017

2018

Total Trade

188.03

153.15

168.30

226.69

Exports

145.67

110.02

120.28

178.24

Import

42.36

43.13

48.02

48.45

Growth %

-

(18.55)

9.89

34.69

(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 2018)

(By principle commodity code)

Pc Code

Commodity

Value (US$ Million)

H8

DRUG FORMULATIONS, BIOLOGICALS

42.82

O5

MOTOR VEHICLE/CARS

34.02

Q3

MANMADE YARN, FABRICS, MADEUPS

15.09

N8

NUCLER REACTR, INDL BOILR, PRT.

12.63

F8

FINISHED LEATHER

10.18

P8

COTTON FABRICS, MADEUPS ETC.

9.28

B9

OIL MEALS

7.35

N6

INDL. MACHNRY FOR DAIRY ETC

4.89

P9

OTH TXTL YRN, FBRIC MDUP ARTCL

2.95

J9

PAPER, PAPER BOARD AND PRODUCT

2.57

(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 from Cambodia (Jan-Dec 2018)

(By principle commodity code)

Pc Code

Commodity

Value (US$ Million)

E5

NATURAL RUBBER

10.62

Q8

RMG MANMADE FIBRES

9.05

Q6

RMG COTTON INCL ACCESSORIES

8.05

G2

FOOTWEAR OF LEATHER

4.24

D5

MISC PROCESSED ITEMS

3.28

K1

PLYWOOD AND ALLIED PRODUCTS

2.02

B2

CASHEW

1.83

K2

OTHER WOOD AND WOOD PRODUCTS

1.62

J1

FOOTWEAR OF RUBBER/CANVAS ETC.

1.54

M8

MEDICAL AND SCIENTIFIC INSTRUM

1.08

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