India ASEAN Cooperation

Transcription

1 Moving Forward with ASEAN-INDIA Connectivity it Financing and Supporting Mechanism: Views from Exim Bank November 27, 2013 Bangkok

2 India ASEAN Cooperation ASEAN is the second-largest trade partner of India after EU-27 Closer linkages with ASEAN as part of India s Look East Policy India became a member of the ASEAN Regional Forum (ARF) in The bilateral cooperation reached a new height when India-ASEAN relationship was upgraded to the summit level in Nov 2001 In October 2003, a Framework Agreement on Comprehensive Economic Cooperation was signed between ASEAN and India, covering Free Trade Agreements (FTA) in goods, services and investment, as well as areas of economic cooperation The agreement for freeing trade in goods has already been implemented with the ASEAN on January 01, 2010 The India-ASEAN FTA would eliminate tariffs for about 4000 products (which include electronics, chemicals, machinery and textiles) til out of which h duties for 3200 products will be reduced by December 2013, while duties on the remaining 800 products will be brought down to zero or near zero levels by December 2016 India-Malaysia Comprehensive Economic Cooperation Agreement came into force from July 01, This is India s second bilateral CECA in ASEAN region, after Singapore 2

3 India ASEAN Trade Relations Robust Trends in Bilateral Trade (US$ bn) India ASEAN trade flows Exports Imports Total Trade Rise in total Indo ASEAN trade underlined by buoyancy in both exports and imports India s trade with ASEAN accounted for a significant 9.6% of India s total trade in India s exports to ASEAN have grown at a five year CAGR of 14.5%, while imports at 15.3% India s trade deficit with ASEAN stood at US$ 9.9 bn in Source: Ministry of Commerce & Industry, Government of India The India ASEAN FTA is expected to further provide the necessary impetus for boosting trade relationship 3

4 Major Trade Partner in ASEAN Region Export Partners in ASEAN (US$ mn) Import Partners in ASEAN (US$ mn) Source: Ministry of Commerce & Industry, Government of India 4

5 India ASEAN Trade & Investment Opportunities ASEAN s importance to India is not only for its large market (combined GDP size of US$ billion in 2012), but also for their strategic location, in the close neighborhood h of India. Potential for Investment: Growing infrastructure needs in the ASEAN region, especially the Mekong countries ti offers huge potential. ti Greater amount of investments are needed in the transport sector, mostly road projects. Improved infrastructure connecting these economies would help in realization of the benefits of trade facilitation efforts. Border Trade between India and ASEAN, especially the CLMV countries (through Myanmar) has special significance. Immense potential due to the geographical continuity with India and Myanmar sharing common border in the North Eastern Region with 4 states, namely, Mizoram, Manipur, Nagaland and Arunachal Pradesh. 5

6 India ASEAN Trade & Investment Opportunities India s trade with the Mekong Countries has increased over seven- fold, from US$ 2.1 bn in 2003 to US$ 16.5 bn in India s share in their global trade, however, was only 2.1% in 2012, which shows the potential for increasing trade with the region. Increased trade & investment with ASEAN is of immense importance from the perspective of India s international trade and regional integration. High potential for enhancing bilateral trade relations. Improved connectivity and trade facilitation can enhance the same. HOW CAN EXIM BANK SUPPORT? 6

7 Exim Bank of India India s premier Export Finance Institution Established on 01 January 1982 under the Export-Import Bank of India Act, 1981 for the purpose of financing, facilitating and promoting foreign trade in India. Wholly owned by Government of India Board of Directors appointed by Government of India; comprises top officials from key GOI Ministries, RBI, ECGC, commercial banks, professionals poesso as Headquartered in Mumbai, we have 10 Domestic Offices in India and 8 overseas Offices (Addis Ababa, Dakar, Dubai, Johannesburg, London, Singapore, Washington and Myanmar). 7

8 Enhancing India ASEAN Connectivity: Support Mechanism South East Asia region has been a focus region for Exim Bank, and thus forms a critical component of the Exim Bank s strategy to promote and support two-way trade and investment Exim Bank provides comprehensive range of financing,advisory and support programmes to promote and facilitate India s trade and investment relations with the ASEAN Countries. Exim Bank plays the role of a catalyst for investment in ASEAN region by extending loans to Indian companies for investment in the region and entering into various collaborative programmes. 8

9 Financing Programmes Financing Programmes (Various Currencies) Export Credit Medium / Long Term Lines of Credit Supplier s Credit Buyer s Credit Short Term Pre / Post Shipment Credit Import Credit Import Loan for capital goods Bulk Import Loan for Raw Materials Loans for Exporting Units Term Loans for expansion/ diversification / new projects/ export product development/ export marketing / research & development Term Loans for overseas equity investment Direct equity stake in Indian/ Overseas ventures of exporting companies 9

10 Key Lending Programmes / Support Mechanism Sovereign Lending Programs Project Exports Financing Overseas Investment Finance (OIF) 10

11 Sovereign Lending Programs Lines of Credit (LOC) Programme A Line of Credit (LOC) is afinancing i mechanism through h which h Exim Ei Bank extends support for export of projects, equipment, goods and services from India. LOC extended to Foreign Governments or their nominated agencies such as Central Banks, state owned commercial banks and para-statal organizations. LOCs enable buyers in those countries to import developmental and infrastructural projects, equipment, goods and services from India, on deferred credit terms Credit offered is 100% of Contract Value. Credit tenors could range upto 20 years LOCs are extended at the behest of Govt. of India and Exim Bank also extends its own LOCs to regional development banks, overseas financial institutions, commercials banks etc. Status of LOCs No. of LOCs operative : 179 No. of countries covered : 75 Total amount of LOCs sanctioned : USD 9.67 billion 11

12 Sovereign Lending Programs Lines of Credit operative in ASEAN Borrower Cambodia Lao PDR Key Sectors/Projects covered Electricity transmission line; Water development projects Electricity Transmission Line project; Irrigation Project; Hydropower Projects Myanmar Railway Projects/ upgradation of Yangon-Mandalay Railway Systems, upgradation and maintenance of workshops; Refinery Projects; Manufacturing Plant Projects; Transmission Line project; Petrochemicals Vietnam Hydro Power Project 12

13 Sovereign Lending Programs Buyer s Credit under NEIA Exim Bank has introduced this product in conjunction with ECGC under GOI s National Export Insurance Account (NEIA) Bank finances and facilitates project exports from India by way of extending credit facility to overseas sovereign governments and government owned entities for import of goods and services from India on deferred credit terms. Facility to cover 85% of contract value. aue Credit Cedtperiod upto 15 years may be considered. 13

14 Exim Bank Supporting Overseas Projects Exim Bank plays a pivotal role in promoting & financing overseas projects. Projects and services, broadly categorised into: Civil engineering g construction projects, Turnkey projects, Consultancy services, and Supply contracts on deferred payment terms Exim Bank extends funded & non-funded facilities towards financing project exports from India. Over the past two decades, increasing number of contracts have been secured by Indian companies in Asia, Sub Saharan Africa, CIS, Latin America. Such projects supplement the efforts of the host country governments in achieving their developmental objectives. Projects Under Execution with Exim Bank s Support (As on March 31, 2013) No. of Contracts : 293 Value of Contracts : US$ billion No. of Countries : 69 No of Indian companies : 90 14

15 Ongoing Project Exports Contracts: ASEAN Exim Banks has supported a number of Indian companies, by way of funded and non-funded facilities for Projects in ASEAN Region. Illustrative list below: Country Key Sectors/Projects covered Cambodia Electricity transmission line; Water development projects LAO PDR Electricity Transmission Line project; Irrigation Project; Hydro electric projects Malaysia Railway Project, Gas pipeline, Telecom equipment Myanmar Singapore Thailand Vietnam Engineering & Construction, Oil & Gas, transmission line, supply of equipment Offshore drilling rigs, tunnel ventilation & environmental control systems EPC Contract for platform compression facilities, EPC for Gas pipeline Hydropower project 15

16 Promoting Investment OIF Programme Comprehensive assistance Pre investment advisory services Finance through debt and equity Finance available for: Greenfield projects; Brownfield expansion; Overseas acquisitions directly or through special purpose vehicles Direct equity participation in Indian ventures abroad. Joint investments by Indian and overseas company in third country markets. As on March 31, 2013, Exim Bank has provided finance to 436 ventures set up by more than 352 companies in 71 countries. In ASEAN region, Exim Bank has funded overseas ventures of Indian Companies in Indonesia, Malaysia, Myanmar, Singapore and Vietnam. Investments sectors supported include coal mine acquisitions, textiles, shipping, paper, Coffee, carbon black, abrasives, etc. 16

17 Other Support Mechanisms Institutional Linkages : Exim Bank has a wide network of alliances with financial institutions and investment promotion agencies, market promotion boards and service providers across the globe for assisting externally oriented Indian companies in their quest for globalization. Exim Bank as a Consultant: Exim Bank is well positioned to share its experience and expertise in the fields of capacity creation, institutional strengthening, export development and export capability creation. The Bank is thus well placed to provide a range of technical assistance in these fields. Asian Exim Bank Forum: With a view to enhance cooperation and forge a stronger link among its member institutions, the first meeting of Asian Credit Export Agencies (ECAs) was held in India in 1996 at the initiative of Exim Bank, which led to the formation of the Asian ECA Forum. Members comprise ECAs from Australia, China, India, Indonesia, Japan, Korea, Malaysia, Philippines, Thailand and Vietnam. ADB is a permanent Observer. 17

18 Other Support Mechanisms Research Studies: Exim Bank carries out research on areas related to bilateral trade and investment, sector/product/country and regional studies, as also policy issues related to the external sector with a view to enhancing competitiveness of Indian exporters. The published research studies related to ASEAN include: ASEAN Countries: A Study of India s Trade and Investment Potential BIMSTEC Initiative: A Study of India s Trade and Investment Potential with Select Asian Countries Enhancing India-Myanmar Trade and Investment Relations: A Brief Analysis India s Trade and Investment Relations with Cambodia, Lao PDR, Myanmar, Vietnam (CLMV): Enhancing Economic Cooperation Representative Offices: Exim Bank has two representative offices in the ASEAN region - Singapore and Yangon. The representative offices play a role in facilitating India s economic cooperation with ASEAN countries 18

19 Moving Forward. Enhance infrastructure connectivity construction: Connectivity of railways, roads, sea routes, telecommunication networks, oil & gas pipelines in the region. Increased participation of Indian Companies in various Infrastructure connectivity construction. Development of roads and railway networks to connect India with ASEAN countries will provide an avenue for cross-border trade and expedite economic development in this region Increased credit support to connectivity projects: Explore multilateral financing cooperation mechanisms towards funding gaps, provide direct financing support, value added services, project feasibility studies, consultancy etc.; Companies may adopt various approaches including PPP, BOT, etc. 19

20 Moving Forward. Facilitate Trade and investment cooperation's through mechanisms such as the Asian Exim Bank Forum. ECAs to build close cooperation through joint financing/guaranteeing projects. Strengthen Knowledge sharing activities amongst ECAs in the region, information exchange, best practices etc. Closely work with Multilateral Institutions: Co-financing of Projects / Exim Bank holds Business Opportunities Seminars with World Bank/ADB to facilitate and encourage more Indian companies to actively bid for multilateral funded projects overseas / Consultancy Assignments Exim Bank ready to join hands with you towards greater contribution to connectivity and increase trade & investment with ASEAN. 20

21 THANK YOU Meghana Joglekar Resident Representative Export-Import Bank of India 20, Collyer Quay, #10-02, Singapore Tel: (65) / Jasmeet Singh Narula Resident Representative Export-Import Bank of India 54-A Ground Floor Boyarnyunt Street Yangon Myanmar Tel : jasmeet.n@eximbankindia.in Website 21