‘Laos is emerging as a preferred destination for corporates’

Font Size

Print

Feedback

Email

Discuss

: In what could be described as a blossoming of India’s ‘Look East’ policy, India and the Lao PDR have stepped up their bilateral economic and business engagement. This is a reflection of the fruition of India’s yearning to expand its cooperation with Asean nations and would certainly go a long way in building what Prime Minister Manmohan Singh emphasises a strong east Asia community.

India’s ‘Look East’ policy is not just confined to the political, strategic or cultural dimension. There is today a strong economic content. Indian business leaders have taken the cue and Laos is fast emerging as a preferred investment destination for Indian corporate houses as the country allows bringing in 100% foreign equity.

Companies like Kirloskar Brothers and WPIL Ltd already have a presence in Laos, having exported pumps worth $41 million and $4.1 million, respectively. Water And Power Consultancy Services (WAPCOS), the water and power consulting Indian public sector unit, has already made its mark in Laos in various projects like irrigation, power and is keen to undertake projects funded by the Asian Development Bank.

Anglique Group has also been involved in several projects like, power irrigation, especially in micro canal, hydropower transmission line and rural electrification and is also interested into mineral sector. Gimpex has already made investment in mining sector. J K Paper is keen to invest in Laos in the pulp and paper. Besides, the Aditya Birla Group, the Jaguar group and Kirloskars have good presence in Laos.

A joint statement by India and Laos during the first state visit of the Laos President, Chaommaly Sayasone, speaks of a considerable potential for Indian companies to enter the Lao economy through investments. Laos, on its part, sees huge scope for Indian investors in sectors such as hydro-power, mining, agriculture, construction, road and railway network, transportation, information technology and e-governance, steel making, small and medium enterprises.

It is in this context that both countries have welcomed the initiative of FICCI to organise the first-ever exclusive Indian trade exhibition in Vientiane in November 2008 to showcase Indian technological capabilities and industries. FICCI has also signed a MoU with the Lao National Chamber of Commerce, to give a boost to B2B ties between the two countries.

Not surprisingly, therefore, the Laos’ president Khamtay Siphandone has put on record his appreciation of India’s efforts to develop the Lao PDR economy, To further cement the relationship, President Sayasone assured business leaders in New Delhi that his government would create a favourable environment for Indian investments. He urged Indian industry to cash in on the myriad opportunities for trade and investment offered by his country, especially in agriculture, mining, hydropower development and tourism.

According to Ficci, India-Lao PDR trade which at $2.74 million did not reflect the closeness of bilateral relations nor did it reflect the tremendous potential that exists between the two countries. There is considerable scope for investments for Indian entrepreneurs and business in the sectors like drugs, pharmaceuticals, chemicals, fertilizers, hydrocarbons, food processing, two wheelers, three wheelers, construction, mining, setting up of sugar and rice mills and IT. In these areas, Indian capabilities and competitiveness were well-known and enhanced cooperation with Lao PDR would benefit both sides.

Lao PDR’s major import items include machinery, organic chemicals, machine tools, paper board and electronic goods. These are some of the products where India has an edge and it can take advantage by venturing in these areas in Lao PDR and thus increasing its the share of imports.

Today, Lao PDR’s main priority areas are agriculture and food self-sufficiency, and infrastructure development. Kirloskar Brothers Ltd have made a significant impact in augmenting Lao irrigation facilities for dry season cultivation with their diesel and electrical water pumps. Apart from irrigation pumps, Indian exports to the Lao PDR are drugs and pharmaceuticals, machinery, paints and varnishes, textiles, sports & electrical goods. Lao exports to India are negligible, and consist mainly of fragrant wood used for agarbattis.