The Lao Ministry of Industry and Commerce hopes to boost bilateral trade and investment with India in the years ahead by taking advantage of untapped potential and abundant resources in different fields.
The country’s position was outlined on October 8 by Minister of Industry and Commerce Dr Khampheng Saysompheng while leading the Lao delegation that joined a special plenary session with ASEAN trade ministers at the Indo-ASEAN Business Summit and Expo 2021 through video conference.
The event was organised by the Confederation of Indian Industry (CII) in collaboration with India’s foreign and commerce ministries, under the theme “Building vibrant supply chains through deeper trade and investment relations”.
Dr Khampheng said Laos has large untapped potential that can be explored by Indian entrepreneurs and investors. The country has abundant natural resources such as land for agriculture, growing crops and raising livestock, he pointed out.
“In terms of laws and regulations for foreign investors, we have the Revised Investment Promotion Law and the Enterprise Law that facilitate investment and enable a friendly business environment by providing tax incentives and shorter business registration processes, as well as attractive investment opportunities in the special economic zones.
“However, it is evidenced that bilateral trade and investment between the two countries is considerably small compared to the trade potential and there is room for greater improvement,” he said.
He noted that India has great potential in the areas of pharmaceuticals and medical equipment industry, machinery, textiles, information technology, agriculture and food processing.
“So, we can explore this untapped potential in areas of mutual interest to further broaden and deepen trade and investment between ASEAN, including Laos, and India,” he said.
Dr Khampheng also said the adverse impacts of the Covid-19 crisis had resulted in several problems and challenges in the region and across the globe, such as the downturn in the world economy, disruption in the flow of goods and services, restrictions on cross-border travel and movement of people, the negative impact on livelihoods of the people, and the vulnerability of supply chains.
“This is a global issue that we all are experiencing. Therefore, it is necessary for us to work hand in hand to find appropriate policies and solutions to address and overcome this crisis. One of the areas that we must work on is to build vibrant and resilient supply chains through deeper trade and investment in the region,” he said.
Dr Khampheng made some suggestions for moving towards vibrant supply chains through deeper trade and investment ties in the region, including the use of digital and other technologies for regional supply chains.
In addition, he recommended the reduction of trade barriers such as non-tariff and technical trade barriers to ensure the constant flow of goods and skilled labour across countries.
He also suggested that entrepreneurs and the private sector should fully utilise the ASEAN-India Trade in Goods Agreement and encourage the relevant bodies to finalise the work to make the pact more user friendly in order to increase bilateral trade.
Dr Khampheng sought further collaboration between the private sector of ASEAN and India, especially between micro-, small- and medium-sized enterprises (MSME), including steps to promote and support the private sector in accessing markets in ASEAN and India.
The ASEAN-India Business Council can help bring together key private sectors of ASEAN and India through events such as business matching via virtual and physical conferences, he suggested.
“It is important to recognise the critical role of a rules-based multilateral trading system in driving economic recovery in the post-pandemic period and to work together for a stronger multilateral trading system,” Dr Khampheng added.
ASEAN is one of India’s crucial trade partners. India was the seventh largest trading partner and the seventh largest source of foreign direct investment (FDI) among ASEAN dialogue partners in 2020.
According to the website of the Indian embassy in Vientiane, the main products exported from India to Laos are machinery, equipment, pharmaceutical products and automobiles. In recent years, the export of generic medicines and other pharmaceutical products has increased.
Laos’ exports to India include bulk minerals and ores (such as copper and gold) and wood products such as veneer and plywood. There are currently 51 Indian companies registered in Laos with an investment capital of $48 million. Most of these companies are based in the capital Vientiane.
VIENTIANE TIMES/ASIA NEWS NETWORK