Mumbai: Export-Import Bank of India’s (Exim Bank’s) joint study in association with the Indian Mission to ASEAN, titled “Strengthening ASEAN- India Partnership: Trends and Future Prospects” was released at the hands of Mr. Suresh Prabhu, Hon’ble Commerce and Industry Minister, Government of India, in the presence of trade ministers from ASEAN countries, during the “ASEAN-India Business and Investment Meet” held in New Delhi on January 22, 2018.
The Association of Southeast Asian Nations (ASEAN) established in 1967, commemorated 50 years of its establishment in 2017. Over the past 5 decades, ASEAN has emerged to become one of the fastest growing regions in the world and has made tremendous progress both economically and socially, with deepened intra-ASEAN cooperation and narrowed developmental gap within and across the ASEAN region. Exim Bank’s study analyses recent trends and highlights future prospects for India’s trade and investments in the ASEAN member countries, given their strategic importance to India.
The growing significance of trade as a facilitator of growth for the region is clearly evident from the performance of ASEAN countries over the years. The study highlights that, ASEAN’s total trade accounts for 7.1 percent of the world’s total trade, and it is the 4th largest trading region in the world, behind the European Union, USA and China. India’s trade with ASEAN has almost doubled from US$ 35 bn in 2007 to US$ 65 bn in 2016, making India stand as ASEAN’s 11th largest trading partner.
The ASEAN region has also been recognized to be among the few regions in the world with remarkable growth in FDIs, even amidst global economic uncertainties. The Study notes that, cumulatively, during the period April 1996 to March 2017, India’s outward foreign direct investments in ASEAN countries in joint ventures (JVs) and wholly owned subsidiaries (WOS), amounted to US$ 70 billion, accounting for nearly 23 per cent of India’s total overseas investments. On the other hand, ASEAN’s investments in India during the period April 2000 to March 2017 amounted to US$ 59.6 billion, accounting for nearly 17 percent of India’s total FDI inflows.
With its 10 diverse markets, a number of which are progressing to be developed countries, ASEAN offers a wide range of investment opportunities for foreign investors in key sectors. The Study analyses and identifies potential focus sectors which Indian investors could explore for investment, in line with the priority sectors identified by the Governments of the ASEAN countries, which include, among others, digital industry, financial services, agriculture, healthcare and tourism, etc.
Going forward, there are also immense opportunities for strengthening ASEAN-India partnership in key areas such as connectivity, strengthening trade, cooperation in SMEs and ITES, building regional value chains, among others. Through increased engagement and continued closer economic cooperation among India and ASEAN, the current trade imbalance is also expected to get corrected in the near future.
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