Cambodia and India have agreed to speed up negotiations on a number of key documents that will lead to the signing of two significant accords.
The Bilateral Investment Treaty (BIT) and the draft operating conditions for Cambodia-India Joint Working Group on Trade and Investment (CIJWGTI) are intended to further expand trade and investment between the two countries.
The consensus was reached during a meeting between Cambodian Minister of Foreign Affairs and International Cooperation Prak Sokhonn and new Indian ambassador to Cambodia Devyani Uttam Khobragade at the ministry on January 25.
Sokhonn said that while Cambodia and India have a relatively close relationship backed by centuries of shared history, as well as cultural and civilisation links, bilateral trade leaves much to be desired.
Motivated by this disparity, Prime Minister Hun Sen recently asked the Indian side to consider a bilateral free trade agreement (FTA) with the Kingdom, he said.
Cambodia Chamber of Commerce vice-president Lim Heng noted that the Kingdom currently offers relatively little in line with Indian demand.
But even so, he contended that given India’s sheer size and massive population, any positive signs in the Cambodian economy would be spectacularly magnified by a trade agreement with the emerging Asian economic powerhouse.
“Once there is a bilateral trade agreement, it will not only increase the flow of trade between the two countries, but will also be an opportunity for Cambodia to attract internationals to come and invest in Cambodia to produce goods that are in high-demand in India,” Heng said.
While there is no clear list of major Cambodian exports to India, notable imports include pharmaceuticals, machinery and auto rickshaws, he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said trade with India remains disappointing, given nearly 60 years of diplomatic relations.
The utter magnitude of the Indian market is enticing to many countries, and penning a trade agreement with it would bode well for the Kingdom, he said. “It will not only help expand business volume but also the tourism service sector.
“At the same time, Cambodia needs to further diversify its agricultural product portfolio to create an opportunity to penetrate this huge market,” Vanak said.