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India ASEAN bilateral trade
INDIA-ASEAN trade in 2003-04 was about US$ 13.25
billion, over 5 times the 1993-94 trade figure of US$ 2.5
billion. Indias exports to ASEAN were US$ 5.8 billion
while imports about US$ 7.4 billion in this period; balance
of trade was in favour of ASEAN.
Compared to other regional groupings, ASEAN is the
fifth most important market in the world in terms ofIndian exports and fourth in terms of imports.
ASEAN as a region has displayed great economic dynamism. ASEANs share in worldwide
exports doubled between 1980 and 2000. Further, both India and ASEAN as a whole have
attained growth in exports, at rates higher than the global average in last two decades.
Growth in Indias exports to ASEAN in recent years has been much higher in comparison
with other important destinations. Although in case of imports, those from other regions
have achieved faster growth than ASEANs imports into India.
Indian exports to ASEANmajor commodity groups
Indias exports to ASEAN include oil meals, gems and
jewellery, meat and meat preparations, cotton yarn, fabrics,
made-ups, engineering goods, transport equipment,
machinery and instruments, electronic goods, marine
products, fruits and vegetables, rice, drugs and
pharmaceuticals, chemicals, etc.
Confederation of
Indian Industry
Enhancing
India-ASEAN Trade
Table I - Indias exports to ASEAN
US$ million
Region 2002-2003 % % 2003-2004 % %
(March-April) Share Growth (March-April) Share Growth
ASEAN 4,618.54 8.7606 33.60 5,821.74 9.1189 26.05
Indias
Total Export 52,719.43 20.29 63,842.97 21.10
Source: Export Import Data Bank, Ministry of Commerce & Industry,
Government of India
Table II - Indias imports from ASEAN
US$ million
Region 2002-2003 % % 2003-2004 % %
(March-April) Share Growth (March-April) Share Growth
ASEAN 5,150.17 8,3862 17.39 7,433.16 9.5114 44.33
Indias
Total Import 61,412.13 19.45 78.149.61 27.25
Source: Export Import Data Bank, Ministry of Commerce & Industry,
Government of India
Indian imports from ASEAN majorcommodity groups
Indias imports mainly consist of artificial resins, plastic
material, natural rubber, wood and wood products,electronic goods, non-ferrous metals, metaliferous ores
and metal scrap, organic chemicals, edible oils, coal,
fertilisers, etc.
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Table III Relative importance ofIndias trade with ASEAN, 2002-03
US$ million
Indias Total Global Indias Total Trade Percentage share of
Trade with ASEAN Indias trade with ASEAN14,1992.58 13,254.9 9.34
Indias Total Global Indias Total Export
Export to ASEAN
63,842.97 5,821.74 9.12
Indias Total Global Indias Total Import
Import from ASEAN
78,149.61 7,433.16 9.51
Source: Export Import Data Bank, Ministry of Commerce & Industry,
Government of India
Observations:
Indias trade with the world in 2004 stood at US$ 142
billion, ASEAN accounting for 9.34 per cent (Table III)
of Indias global trade, up from 8.56 per cent last year.
However, based on the availability of data for ASEANs
global import, Indias exports to ASEAN in different
product groups are much below the potential
(Table IV). The table indicates the top ten commodity
groups that are of maximum importance in ASEANs
import basket. Percentage share of India in ASEANs
import is small.
Table IV - Percentage share ofIndias contribution to ASEAN imports
In thousand US$
S ASEANs top 10 commodities Value of Value of
No of import up to 2001 Imports Indias %
in 2001 share Share
1 Machinery and electrical 151,173,814.8 1,016,981.7 0.67
appliances
2 Mineral products 37,552,469.9 172,848.2 0.46
3 Chemicals 22,246,053.8 487,205.7 2.19
4 Base metal and metal articles 20,532,920.3 364,502.5 1.78
5 Vehicles 17,038,619.9 77,746.8 0.46
6 Textiles and apparel 11,103,916.4 234,835.5 2.11
7 Plastics 10,994,160.7 77,957.9 0.71
8 Optical, precision and
musical instruments 8,981,457.2 28,203.5 0.31
9 Prepared foodstuffs 7,140,996.6 272,826.0 3.82
10 Vegetable products 5,397,722.0 242,783.9 4.50
Note: Figures cover only Brunei Darussalam, Cambodia, Indonesia,
Malaysia, Myanmar, Philippines, Singapore and Thailand (2000 - 2001)
India must focus on the commodity groups that are
of maximum importance to ASEAN so that Indian
exports to the region may reach the
targetted level of USD 30 billion by2007.
Potential sectors for investment and
trade with India (markedly from the
manufacturing basket) are
Drugs and pharmaceuticals
Healthcare
Engineering goods
Auto components
1 Meeting with H E Mr Boungnang Vorachith,
Prime Minister of Lao Peoples Democratic
Republic, 2003
2 Mr N Srinivasan, Director General, CII and
Mr R L Narayan, Indian High Commissioner in
Malaysia with Datuk Seri Najib Tun Razak,
Deputy Prime Minister of Malaysia, 2004
3 Meeting with H E Pehin Haji Abdul Aziz,
Minister of Education and Chairman, Brunei
Investment Agency (BIA), Brunei, 1999
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Leather
Gems and jewellery
Processed food items
Trend analysis- growth in India-ASEAN trade
Compound annual growth rate (CAGR) of India-ASEAN
total trade for the period 1991-2001 has been a robust
11.1 per cent, which is more than the CAGR recorded by
1 CII Business delegation with Dato Seri Abdullah Ahmad Badavi, Prime Minister of Malaysia during Incredible India, 2003
2 CII CEOs delegation with H E Brig Gen Pyi Sone, Minister of Commerce, Union of Myanmar, 2004
3 CII / UMFCCI Second India Myanmar Joint Task Force Meeting, 2004
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Indias total trade in the same period.
CAGR calculated for the years 2001to 2004 at 17.05
per cent shows a promising increase that needs to be
further accelerated.
The potential to accelerate trade exists, but there
is need to apply greater thrust to trade in focus
sectors.
Trend in India ASEAN Trade
15
30
5.8
0
5
10
15
20
25
30
35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
US$
billion
Trend in India ASEAN Trade
Growth @ 31.30 % CAGR
Source: Export Import Data
Bank, Ministry of Commerce &
Industry, Government of India
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Observations
The compounded annual growth rate (CAGR) required
to be maintained from 2004 to 2007 in order to reach
the desired trade level of US$ 30 billion in 2007 is 31.30
per cent (down from 32.38 per cent required last year.
Trade figures from the DGCI&S show that among
ASEAN members, Singapore and Malaysia have been
Indias most prominent trading partners.
There has not been any significant change in the
product composition of Indias major exports to
ASEAN since 1991-92 with the exception of electronic
goods that emerged as one of the leading export items
by 2000-01. As regards composition of Indias imports
from ASEAN, electronic goods again have turned out
as the single-most important constituent. Ediblevegetable oils also gained prominence and experienced
an extraordinary increase in the share from 6 per cent
in 1991-92 to 23 per cent in 2000-01.
Overall, product diversification in Indias imports from
ASEAN is far less than that of Indias exports to the
region. Inter-temporal changes in product composition
1 Meeting with Asian Institute of Management
(AIM), Philippines, 2003
2 Mr Ashok Soota, Past President CII with Former
President of Philippines, Mr. Fidel V Remos,
2003
3 Meeting with Phil ippines Chamber of
Commerce and Industry, 2003
While the BCLMV countries do not compare
favourably with ASEAN-5 (Indonesia, Philippines,
Malaysia, Singapore and Thailand) in trade volume,
they are also doing well on the trade front, and their
combined share in the global trade of ASEAN-10swelled up from less than 3 per cent in 1991 to over
6 per cent in 2001. This is an area where greater focus
by Indian industry especially where the products are
cost competitive, such as drugs and pharmaceuticals,
chemicals etc could yield positive results.
Recommendations
In sync with the government of Indias policies, CII has
been promoting greater Indian trade and investment in
ASEAN to benefit from AFTA and to access other Asia-
Pacific markets. To this end, CI I recommends
Enhancing Indias exports to ASEAN:
As mentioned earlier, focus should be on the sectors
that are of maximum importance to ASEAN, namely:
Machinery, engineering products
Mineral products, base metal and metal articles
highlights that while Indias exports to
ASEAN are becoming increasingly
diversified; concentration in its imports
from the region has been rising. Atthe bilateral level also, product
diversification is found to be relatively
higher for Indias exports than its
imports, excepting the case of
Thailand.
With the BCLMV countries (Brunei,
Cambodia, Laos, Myanmar and
Vietnam) Indias current trade is rather
low both in terms of absolute value
and relative share, with Myanmar being
an exception. Constraints in bilateraltrade are several including high shipping
cost, lack of contact between the
business communities, relatively lower
volume of demand and so on.
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Chemicals, drugs and pharmaceuticals
Base metal and metal articles
Transport equipment
Textiles and apparel Plastics
Optical, precision and instruments
Prepared foodstuffs
Vegetable products
Services
Enhancing ASEANs exports to India
The ASEAN-5 (Indonesia, Philippines, Malaysia,
Singapore and Thailand) may enhance exports to India
in the following categories:
Manufacturing including:
Light engineering
Electronics and electrical products, including
consumer goods
4 Meeting with Mr Lee Hsien Loong, former
Deputy Prime Minister of Singapore, 2004
5 Inauguration of CII Made in India exhibitionin Thailand, 2004
6 Luncheon meeting with Mr George Yeo,
former Minister for Trade and Industry,
Singapore 2004
Medical equipment
Computer hardware and parts
Services including:
Retail and logistics Tourism and hospitality
Food processing technology
Financial services
The BCLMV (Brunei, Cambodia, Laos, Myanmar,
Vietnam) countries have the potential to enhance
exports to India in the areas of :
Forestry and forestry produce
Agricultural products including processed food
Assembled electronic items Fuel, oil & gas, petrochemicals and their
by-products
Minerals and ores
Growth rate of India-ASEAN export has been
promising, at 33.00 per cent for the year 2002-03,
though it has declined this year to 26.05 per cent.
India-ASEAN trade must maintain
CAGR of 31.30 per cent in next
three years, to reach a target of
US$ 30 billion. The small volume of trade between
India and ASEAN is hardly an
indicator of its economic importance
to India. What is more compelling
is the fact that though the volume
of trade is small, the export basket
has potential to move up the value
chain and diversify to cater to the
emerging and growing demand in the
ASEAN countries.
Study of business opportunities in
the ASEAN region followed up by
dedicated business missions will help
fructify business partnerships in
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tandem with the Governments Look East Policy.
In this context, Indias positive engagement with
Myanmar and the recent BIMSTEC initiative will stand
India in good stead. CII has already established a task
force with Myanmar to further the existing bilateral
trade and economic relations.
Focused linkages between products and markets
between India and ASEAN will further enhance
existing linkages.
With the rising demand for products like iron and
steel, alloys and processed mineral which are driven by
large investments in infrastructure have given credibility
and competitive edge to the Indian Industry which
can be enhanced in the ASEAN region as well.
Indian heavy engineering and construction companies
with long experience of working in unfavorable
conditions with bare minimum technological support
and low cost options need to aggressively explore
business in BCLMV countries.
1 Mr Vijay Kirloskar, Chairman & Managing
Director, Kirloskar Electronic Co Ltd and
H E Nguyen Dy Nie, Minister of Foreign
Affairs, Socialist Republic of Vietnam at a
CII meeting, 2003
2 Signing of Letter of Intent between CII and
the Institute of South Asian Studies,
Singapore in the presence of H E Mr Goh
Chok Tong, former Prime Minister of
Singapore, 2004
CIIs ASEAN Focus
Develop Strategies to enhance economic, industrial
and trade relations
Identify areas of mutual cooperation
Identify issues of concern and evolve suitable policy
recommendations
Evolve guidelines and checklists for different forms
of industrial cooperation
Institutional Linkages in ASEAN
CI I has Institutional linkages with 29 counterpart
organisations in 8 ASEAN countries
Cambodia
Cambodian Investment Board
Phnom Penh Chamber of
Commerce
Indonesia
Indonesian Chamber of
Commerce and Industry Laos
Lao National Chamber of
Commerce & Industry
Malaysia
The Federation of Malaysian
Manufacturers
The Malaysian Industrial
Development Authority1
2
CI
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The Malaysian External Trade Development Board
Asian Strategy & Leadership Institute
Melaka Indian Chamber of Commerce & Industry,
Malaysia
Construction Industry Development Board
Myanmar
Myanmar Industrial Association
Myanmar Computer Federation
The Union of Myanmar Federation of Chambersof Commerce & Industry
Philippines
The Philippines Chamber of Commerce & Industry
Federation of Philippine Industries, Inc.
Asian Institute of
Management
Singapore
Infocomm Development
Authority of Singapore
Regional I nstitute of
Environment Technology
Singapore Confederation of
Industries
Singapore Productivity &
Innovation Board
Singapore-Chinese Chamber
of Commerce & Industry
Singapore Business Federation
Singapore Indian Chamber of Commerce and
Industry
Thailand
The Board of Trade of Thailand
The Federation of Thai Industries
The Board of Investment of Thailand
India Thai Chamber of Commerce
Vietnam
Foreign Trade & Investment Development Centre
Vietnam Chamber of Commerce & Industry
1 Inauguration of CII Made in India
Exhibition in Thailand, 2004
2 Meeting with Dr Thaksin Shinawatra,
Prime Minister of Thailand, 2001
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and ASEAN
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The Confederation of Indian Industry (CII) works to create and sustain an
environment conducive to the growth of industry in India, partnering industry and
government alike through advisory and consultative processes.
CI I is a non-government, not-for-profit, industry led and industry managed organisation,
playing a proactive role in Indias development process. Founded over 108 years ago,
it is Indias premier business association, with a direct membership of over 5200
companies from the private as well as public sectors, including SMEs and MNCs and
indirect membership of over 50,000 companies from 283 national and regional sectoral
associations.
A facilitator, CI I catalyses change by working closely with government on policy issues,enhancing efficiency, competitiveness and expanding business opportunities for industry
through a range of specialised services and global linkages. I t also provides a platform
for sectoral consensus building and networking. Major emphasis is laid on projecting
a positive image of business, assisting industry identify and execute corporate citizenship
programmes.
With 45 offices in India, 13 overseas in Australia, Austria, China, France, Israel, Japan,
Malaysia, Russia, Singapore, South Africa, Switzerland, UK, USA and institutional
partnerships with 239 counterpart organisations in 101 countries, CII serves as a reference
point for Indian industry and the international business community.
CII offices in ASEAN
Confederation of Indian IndustrySuite AT, Level 26, Menara IMC,
No 8, Jalan Sultan Ismail,
50250, Kuala Lumpur,Malaysia
Tel: 603-20316221 / 20394760Fax: 603-20318359 / 20394772
email: r.sathish@ciionline.org
Southeast Asian Regional Representative OfficeConfederation of Indian Industry
47 Hill Street, # 03-02 SCCCI Building
Singapore - 179365Tel: 65-6-3334363
Fax: 65-6-8830658email: ciisgp@pacific.net.sg
aboutCII
Headquarters
Confederation of Indian Industry
The Mantosh Sondhi Centre,23, Institutional Area, Lodi Road, New Delhi 110 003 (India)
Tel: 91 11 24629994-7 Fax: 91 11 24626149
email: ciico@ciionline.org Website: www.ciionline.org
January 2005