Economic complementarities can be fully realized between India and Central Asia, says Banerjee
Developing a good trade and investment relationship with the Central Asian Republics (CARs) is of high strategic and economic importance for India, and the recently held summit with these “Extended Neighbourhood” countries provides impetus to exploring new areas of cooperation for promoting trade and investments.
“The India-CAR Summit (held 27 Jan 2022) shall usher a new dimension to the economic relationship between India and the CARs and lay down a roadmap for future collaborations to meet fast evolving global and regional challenges,” Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said in comments on the virtually held event.
“The Summit provides further impetus to exploring new areas of cooperation for promoting trade and investments and finding new ways of overcoming the connectivity issues so that economic complementarities can be fully realized between India and Central Asia,” he said.
The CAR offers enhanced energy security, a huge market, and a gateway to the markets of CIS and Europe. The Summit focused attention on connectivity, B2B collaborations and various sectoral collaborations between India and the CARs.
The first of its kind meeting between India and CARs also reflects India’s growing economic engagement with the Central Asian nations.
Despite their warm relations, India is not a key trading partner for any of the Central Asian countries, noted CII. Indian exports to the Central Asian Region in 2020-21 stood at a total of US$658 million and imports were US$826 million.
The main export products include meat, fish, dairy produce, coffee, tea, and cereals among others. The main import products include dairy products, eggs, natural honey, edible vegetables, fruits and nuts, oil seeds, lac, gums and resins, salt, ores, minerals, and organic and inorganic chemicals etc.
CII has several recommendations for the way forward.
One, augmented air connectivity and increased frequency of flights between India and the CARs will avoid the challenges poised by road/rail transport.
Two, all countries should work together for expediting the utilization of US$1 billion line of credit given by the Indian Government towards high impact community development projects in Central Asia. This would help generate the incentives for increased private sector investment in Central Asia.
Three, the trade basket between the two sides needs to be further diversified with more value-added products. CII suggests a study of export potential to be undertaken to enhance engagement.
Four, India specializes in trade in services and as an emerging market, Central Asia has a burgeoning demand for high tech services in several spheres like healthcare, higher education, IT & ITES, consultancy, engineering and construction, training and skill development, etc. Efforts should be made to match these complementarities.
Five, to realize the full potential in trade and business, it is essential to bridge the information divide and build awareness of the existing regional and international economic and strategic environment.
This is possible through more frequent government dialogues, roadshows, business delegations and B2B business interactions, tie ups among business chambers, academic and cultural exchange programs, tourism promotion etc. fiinews.com
