India has been actively investing in Southeast Asian markets since adopting its “Act East” strategy at the start of last year. The Post’s Robin Spiess sat down with Sandeep Majumdar, president of the Indian Chamber of Commerce (InCham) in Cambodia, to discuss efforts to increase Indian investment in the Kingdom.
What has InCham been doing in Cambodia recently and what are its plans for the near future?
InCham was founded in February 2012, so it’s been operating five and a half years. Trade between India and Cambodia is low right now, but we’re making efforts to increase it. InCham is going in the right direction and trying to bring in bigger projects in the real estate and agriculture sector. Small- and medium-sized businesses are also a priority.
The Indian Exim Bank, the biggest government bank in India, is focused on a policy to get businesspeople to come and invest in Southeast Asia, and the bank is being asked to take the initiative in funding companies which would like to invest in this region. The Exim Bank has identified four sectors for investment in Cambodia. First, of course, is the garment industry. The second is the biomedical field and the third is hospitals. The fourth is the education sector, because in Cambodia, there really aren’t many opportunities for higher education and we can bring options from India.
How strong is current Indian investment in Cambodia?
Trade between India and Cambodia is up now, though it is not yet a very impressive figure. Government figures in India show total trade to be only about $200 million annually. There are a couple of reasons why exports from India to Cambodia are low. One is that we are not as aggressive in our investments as China. The second reason is – to be frank – Indians have been thinking for years that Cambodia has too small of a population, with only about 16 million people, to invest here. InCham is trying to show India that Cambodia is not just a population of 16 million anymore, but rather it is a part of the Asean Economic Community and investment in Cambodia opens access to Southeast Asia’s population of 600 million.
What would attract Indian businesses to base their operations in Cambodia?
As a businessman, you don’t need a local partner in Cambodia to start your operations. This is the only country in Southeast Asia which allows 100 percent foreign-owned companies to enter the market, so if somebody comes from another country to invest, there is an ease of doing business here.
This is also the only country in the region which has a dollarised economy. I was here in 1997 when the financial crash happened in Southeast Asia, and every single country was affected in the region. Fourteen banks closed overnight in Thailand, and people did not believe in banks after that. That was not a problem in Cambodia, though, because of the dollarised economy.
I have lived in many countries, and this is the only country where you only pay 20 percent corporate tax. That’s a big difference from other countries. Cambodia’s proximity to big countries like India and China is also a positive thing. In many other countries, too, you have political instability. Here in Cambodia there has been the same government for many years.
Do you anticipate more direct airport linkages between Indian and Cambodian cities to be established soon?
Establishing more direct flights between India and Cambodia has been in talks for the last seven or eight years, and we have had discussions between governments about it, but there are practical problems. The issue is not starting a new direct flight, but retaining it once it has been established because you need enough passengers to keep the flight full. Business tourism to India from Cambodia is practically not there right now, and the basic problem is that the airlines are not getting enough of a crowd. Still, we will continue working on this. The Indian government is hosting a tourism forum in February, and we have discussed sending Cambodian officials to this forum to discuss increased tourism.
This interview has been edited for length and clarity.