Renewed emphasis on strengthening ties with neighbourhood: Minister

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SME Times News Bureau | 19 Apr, 2022
External Affairs Minister, S. Jaishankar on Monday said that India has placed a renewed emphasis on strengthening ties with its surrounding countries under its 'Neighbourhood First Policy' to deepen economic linkages.

In his address at the Bharat Chamber of Commerce event on 'Post-Covid Economic Recovery', he said that with sustained focus on reducing barriers to trade and facilitating seamless movement of goods and people, "we have been able to see significant enhancement in bilateral trade with some of our key partners in the neighbourhood".

Referring to the two success stories of neighbours - Bangladesh and Nepal, the External Affairs Minister said that Bangladesh and Nepal are now among the top ten export destinations for India with its total exports to these two countries amounting to over $16 billion.

"Bangladesh has emerged as our largest trading partner in the neighbourhood and the fifth largest export destination globally. However, for a country that has been growing at an average annual growth rate of over six per cent for the last one decade, potential for trade with Bangladesh is much higher," he said.

Bangladesh is also undertaking rapid infrastructure development in the form of airports, seaports and highways and as its closest neighbour, the Indian business community has much to offer to Bangladesh in its transformation, Jaishankar said, adding that more and more Indian business houses should open representative offices and subsidiaries in Bangladesh to understand the market better.

"Bangladesh is also on track to graduate out of the Least Developed Country status in 2026. As many of the trading arrangements of Bangladesh would change when that happens, India is in discussions with Bangladesh for a Comprehensive Economic Partnership Agreement," he noted.

About Nepal, he said that it is a close neighbour and economic partner of India which is the ninth largest export market and an important destination for Indian investments.

He informed the gathering that Indian firms account for over 30 per cent of the total FDI stock in Nepal, worth nearly $600 million. There are about 150 Indian ventures operating in Nepal in manufacturing, services, power sector and tourism industry and a number of reforms have been undertaken in recent years in Nepal which are expected to improve ease of doing business in that country.

Some upcoming areas that may be attractive for Indian industry include vehicle assembly, hydropower, medicinal and aromatic plants and pharmaceuticals, he added.

As a recent World Bank study pointed out, India's exports to Bangladesh could grow by 172 per cent through improved connectivity because of the steps like revival of historic rail links - Haldibari-Chilahati being the most recent, establishment of a new rail link between Agartala-Akhaura, commencement of rail-based container freight movement and expansion of inland waterway routes have been facilitated in the last couple of years, he said.

Now, container cargo can be transported from Mumbai port all the way to Dhaka using railways and from Patna to various business centres in Bangladesh using waterways.

Expressing satisfaction that the Bharat Chamber of Commerce, in partnership with the Ministry of External Affairs, has established an 'Africa Help Desk' for supporting prospective exporters and investors interested in doing business with Africa, Jaishankar said that present mega-trends in Africa are supportive of India's trade and investments in the region.

Africa's large working-age population, its growing middle class, and the significant share of services are crucial for value-adding trade and investment relationships, he added.

"Consumer-driven goods related to agribusiness, apparel and clothing, pharmaceuticals, and automotive components are some of the opportunities that Indian industry can take advantage of," he said

India's total trade with Africa has grown from just $6.8 billion in 2003 to over $75 billion in 2021 while the Indian investments in Africa have also grown rapidly in the last decade, the Minister said.

He also informed the Chamber that the government has announced the setting up of 18 new Indian Missions in Africa with an aim to expand India's diplomatic footprint in that continent. This will also enhance India's economic outreach in Africa and be of immense value to Indian industry interested in working in Africa, he added.