Urgent need to improve border infrastructure
A study by the Export-Import Bank of India has identified potential areas of cooperation between India and the four South East Asia countries covering among others, energy sector and water management, e-commerce and digital connectivity, and physical connectivity network including rail, road, air and sea.
“There is also an urgent need to improve the necessary border infrastructure at trading points to facilitate cross-border movement of goods between India and Myanmar,” said the study ‘Building Infrastructure: Opportunities for India’ released on 3 Dec 2020.
Within the India-CLMV partnership, companies from both India and CLMV would be able to benefit from improved connectivity and logistics, integrated supply chains, an abundance of low-cost skilled labor, resulting in spillover benefits such as technological upgradation, production efficiencies and improved regional competitiveness.
It was released during the Inaugural Session of the Sixth India-CLMV Business Conclave 2020 in the presence of V Muraleedharan, Minister of State for External Affairs.
The study highlights that CLMV countries have the lowest wage rates among ASEAN countries leading to lower costs of production.
“Though the current pandemic and subsequent measures to contain the spread had hit economic activities hard in the first half in the region, through reduced tourist arrivals, disrupted supply chains and dwindling external demand, the economies are already on a path of recovery,” it adds.
The current status of infrastructure (physical connectivity, digital and utility) indicates that except for Vietnam, infrastructure in the rest of CLMV countries needs to be scaled up to integrate themselves fully into the ASEAN Economic Community.
The study also highlights the crucial role infrastructure plays in facilitating trade and investment in the region. Despite recent improvements in infrastructure financing, the annual infrastructure deficit of ASEAN, including CLMV countries, continued to remain high at US$184 billion.
In this regard, to facilitate infrastructure development and address the financing gap, innovative mechanisms of financing besides traditional financing methods need to be explored to increase private sector involvement, which could include, among others, infrastructure bonds and public private partnership (PPP). #exports #investment #infrastructure #trade /fiinews.com
