India has bolstered efforts to gain an economic foothold in Cambodia and its neighbouring countries with the creation of a fund to facilitate the business integration of Indian firms in the region.
The Project Development Fund (PDF), an initiative announced by the Indian Cabinet earlier this week, will allocate $75 million to promote Indian business interests in the Cambodia, Laos, Myanmar and Vietnam (CMLV) region.
The Indian government said the fund will seek to resolve the slow penetration of the country’s businesses in these four developing economies.
“While opportunities are plenty in the CLMV region, Indian entrepreneurs’ endeavours in these countries have, thus far, been limited due to limited information, infrastructure and other contingent risks,” it said in a press release.
“[CMLV countries] have a unique position in the regional value chains and offer a gateway for market access to China/EU and other markets due to various trade agreements.”
The Indian initiative will look to establish a single strategy for the entire CLMV region and promote the business appeal of the block as a whole, Ngamkhotinthang Sitlhou, the first secretary of the Embassy of India in Phnom Penh, said yesterday.
He added that the newly announced financial assistance would benefit both India and the countries targeted for investment.
“The objective of the fund is to facilitate Indian industry as [companies] increasingly seek to expand their business opportunities in these countries,” he said.
“It is expected that Indian industry with the help of this PDF will be able to expand its footprint, including through manufacturing facilities in the CLMV countries.”
India has increasingly sought to strengthen its economic ties with South East Asia through the “Act East” policy first announced by Prime Minister Narendra Modi in 2014.
Some Indian firms, such as engineering and automotive giant TATA International, have already successfully entered the Cambodian market, particularly thanks to cross-border manufacturing and sales of its agricultural machinery, according to Palesa Makhetha, head of corporate communications and branding.
“Tata South East Asia is sourcing products from Thailand as part of its current endeavour to support the farming community in Cambodia,” he said.