Over the past three years, India’s trade with Cambodia has doubled to reach $100 million and is forecast to double again by 2016. While the investment footprint is small compared to markets in China, Dinesh Patnaik, Indian ambassador to Cambodia, is confident that the upward trend will continue. Patnaik sat down with the Post’s Laura Ma to talk about the economic relationship between the two countries.
What are the current trade ties between India and Cambodia?
India’s trade with ASEAN is now over $80 billion, but there is a lot of intra-trading taking place. Cambodia buys over $100 million worth of pharmaceuticals from Indian companies — that’s our biggest trade here. But when I look at the figures, only up to $50 million worth of pharmaceuticals come directly from India to Cambodia. The figures are showing trade between middlemen countries such as Thailand, Singapore and Malaysia instead of a direct India-Cambodia connection.
How does India rank right now as a source of imports?
We’re in the top 20, but not top 10. Since most Indian products that end up in Cambodia come through other countries, those numbers aren’t counted. I’m trying to get producers, suppliers and sellers to talk directly with buyers in India and vice versa. I spoke to the Textile Promotion Council in India last year to connect them directly with buyers. Since then, textiles are up more than twofold, from $3 million to $7 million.
What are some of the trends that you are seeing?
It will take some time to get really big numbers similar to Singapore, Thailand and Malaysia, but it is growing substantially. Overall, direct trade has almost doubled in the last three years, from around $50 million to $100 million. It should be $200 million to $250 million in another few years.
How vibrant is Indian investment here?
Investment is increasing. An Indian company spent around $100 million to open a sugar cane refinery about a month ago. We have investors coming in for rice milling, palm oil, rubber, even gold mining. I’m also trying to change the perception among businesspeople in India that they should go to the big markets like Singapore, Thailand and Malaysia before coming here. Indian investment here is in the early phases, but interest is growing, so I’m very confident.
What are some of the challenges to growth?
Businessmen aren’t aware of the potential here. They would rather do business in countries where they are already established and have contacts. Also, the cost of electricity is quite high in this country. Most expenses are electricity based, making trade difficult. Once new electricity projects come in and prices go down, a lot more people will start arriving.
What kinds of measures are under way to entice more Indian businesses to set up shop here?
By bringing more delegations from India, we can help them understand Cambodia is a good and easy country in which to do business. Seminars and networking events will help them meet other businesspeople. Of the five or six delegations we have brought over in the past six months, two or three have started concrete projects, but all of them are in the discussion phase. These discussions may not work out, but talking about it will spread interest by word of mouth. Having a Bank of India here is also very encouraging to Indian investors. They need some handholding to help start businesses here, which is what I’m trying to do. We also want a direct flight to India by the end of this year or early next year, which will make doing business more convenient.
How has the establishment of the Indian Chamber of Commerce in Cambodia last year helped?
It has made a huge difference in adding an Indian presence. The Chamber of Commerce acts as a knowledge bank, a helping hand and a base for interaction with other Chambers of Commerce. They do seminars on legal systems, on financial systems, labour laws, how to get loans from the banks. Anyone who feels like there is an opportunity to do business with India can become a member of the Indian Chamber of Commerce, so businesses of all nationalities can join.
What would you like to see in the future for bilateral relations?
I would like to see more Cambodian businesspeople going to India and more Indian businesspeople coming here. We have networking and seminar events at the embassy to get people interacting and developing more businesses. From one or two events a year, we now have almost eight to 10 events a year to help people network.
This interview has been edited for length and clarity