Prime Minister Hun Sen departs today for the India-Asean Summit hosted in New Delhi, aiming to boost cooperation and expand a historically minor trade relationship with the world’s seventh largest economy.
The two-day summit begins on Thursday and comes on the heels of a draft agreement passed by Cambodia’s National Assembly on January 15, which seeks to facilitate further economic cooperation between the two nations, particularly in the communication, construction and tourism sectors. During his visit, Hun Sen is scheduled to meet with Indian Prime Minister Narendra Modi, as well as deliver a keynote address to an India-Cambodia business group.
Indian government data show that annual trade between the Cambodia and India has lagged of late, decreasing by nearly 30 percent to $141 million during the last Indian fiscal year, which ran from April 2016 to May 2017. That’s the lowest level since the 2012-2013 fiscal year.
“Merchandise trade between India and Asean is not very important at present, partly because of geography and partly because of India’s traditionally protectionist policies,” said Miguel Chanco, lead Asean analyst for the Economist Intelligence Unit (EIU).
The slump in bilateral trade is likely a result of India’s slowing economic growth, according to Chanco, and was unlikely to improve in the near future.
“The EIU’s current growth estimate for India for the 2017-2018 fiscal year is for a further slowdown, so I wouldn’t be surprised if the country’s trade with Cambodia remained weak,” he said, adding that another reason for relatively weak trade was that both India and Cambodia largely export the same products, such as rice and textiles.
Seang Thay, a spokesman at Cambodia’s Ministry of Commerce, said that there had been little Indian investment in the Kingdom and limited overall trade between the two countries, in part because India is geographically farther – and therefore more expensive to trade with – than Cambodia’s Asean neighbours.
“We hope that having these talks will enable us to address any obstacles that could potentially disrupt trade relations, and to find appropriate solutions to further strengthen two-way trade and investment,” he said.
Thay added that the majority of Indian products to Cambodia are medical or health-related, and World Bank data show India’s main exports to Cambodia largely fall in the chemical and textile categories.