The trade value between Cambodia and India saw a dramatic 25.81 per cent reduction last year to $190.13 million from 2019’s $256.26 million as the Kingdom embarked on a feasibility study for a free trade agreement (FTA).
Cambodian exports to India were valued at $61.36 million last year, down 5.12 per cent year-on-year from $64.67 million, while imports fell by 32.97 per cent to $128.77 million from $191.59 million in 2019, Ministry of Commerce data show.
Ministry spokesman Pen Sovicheat told The Post on February 25 that trade between the two countries had been on a steady upward trajectory prior to the Covid-19 crisis.
With its massive population and the burgeoning purchasing power of its highly-active consumers, he said India offers a vast market of immense potential with a hefty appetite for merchandise that Cambodia could produce.
He said light-industry and consumer goods, agricultural products and a range of technological services represented the bulk of trade between the two countries.
He added that the Kingdom is working closely with Jakarta-based Economic Research Institute for ASEAN and East Asia (ERIA) on a feasibility study of the merits of a bilateral FTA with India.
“With any luck, the closer ties [as a result of the FTA] will provide a boon for Cambodia in the sphere of trade, goods, services and investment, as well as technological exchange,” he said.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post last month that trade between the two nations remains limited, and that with the South Asian country’s sheer size, massive population and thriving technology sector, an FTA would benefit Cambodia a great deal.
“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,” he said.
During a January 18 meeting with newly-minted Indian ambassador to Cambodia Devyani Uttam Khobragade, Prime Minister Hun Sen formally asked the Indian side to examine the possibility of a bilateral FTA with the Kingdom.
The prime minister said the prospect of organising an expeditious free-trade cooperation deal between the two countries would be a major key to unlock bilateral investment and trade opportunities and foster stronger relations.
According to Sovicheat, Cambodia expects to strike an FTA with South Korea this year after having reached a similar deal with China last year.
The Kingdom is also exploring the idea of FTAs with the Eurasian Economic Union (EAEU) and other countries such as Australia, New Zealand, Japan, Mongolia, Canada, the UK and US.
Cambodian trade with India was worth more than $256 million in 2019, up from $205 million in 2018, according to the latest figures from the Ministry of Foreign Affairs and International Cooperation.
The Kingdom’s total trade hit $35.80585 billion last year, inching up 2.52 per cent from 2019’s $34.92055 billion, commerce ministry statistics show.