You are on page 1of 51

Intern

nationalDivision
n

4th
h Round
d of Disscussio
on on
Busin
ness Opportun
nities inn BIMST
TEC Coountriess
20133

BIM
MSTEC DEPAR
RTMENT
THE
E ASSOCIATE
ED CHAMBERS OF COMM
MERCE AND INDUSTRY O
OF INDIA
Corpo
orate Office 5, Sardar Paatel Marg, Chaanakyapuri
N Delhi 110021
New
Tel 465500555 (Hunting
g Line), Fax: 446536481 822, 46536497 - 98

1|P a g e

InternationalDivision

Regional cooperation is a stepping stone for economic integration within a geographic region. It may be marketdriven integration without any explicit agreement implying that private sector is actively engaged in bringing
convergence among the economies. Economic integration may also be pursued through cooperation agreements
among the countries of the region which are mainly policy induced integration. Many regions across the world are
engaged in comprehensive economic partnership agreements. This paper brings out the characteristics of BIMSTEC
and argues that the BIMSTEC focus area has strong impact on the Asian way of integration.

BIMSTEC
The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international
organization involving a group of countries in South Asia and South East Asia. These are: Bangladesh, India,
Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.

BIMSTEC: Building Bridges between South and South East Asia


BIMSTEC proposal was initiated in 1997 comprising Bangladesh, India, Myanmar, Sri Lanka, and Thailand. Though
stalled by the 1997-98 financial and economic crises, since the holding of the first summit meeting of the member
states in July 2004, BIMSTEC has come a long way to promote the idea of sub-regional cooperation comprising a
region that has enormous untapped potential. This is a unique initiative in the sense its membership consists of
nations from both South and Southeast Asian regions. The first level of convergence in consolidation of liberalization
benefits is expected out of this initiatives understanding that both SAARC and ASEAN are at different levels of
development in general. Later on, Nepal and Bhutan joined the initiative; the name has changed to Bay of Bengal
Initiative for Multi-sectoral Technical and Economic Cooperation. BIMSTEC has a potential to increase the trade
among member countries by taking advantage of their geographical location in the region of the Bay of Bengal and
the Eastern coast of the Indian Ocean.
The uniqueness of BIMSETC is in multi-sectoral approach compared to other Asian blocs. This creates another layer
of cooperation to ensure quicker integration. It started with initially with six sectors; viz. trade, technology, energy,
transport, tourism and fisheries. These are extremely important sectors of this sub-region. Later other areas have
also been included such as agriculture, environment, culture, public health, people-to-people contact and counterterrorism. Complementarily in sectoral comparative advantage has been identified and proposed to ensure benefits
for other member countries.

2|P a g e

InternationalDivision

Background
On 6 June 1997, a new sub-regional grouping was formed in Bangkok and given the name BIST-EC (Bangladesh,
India, Sri Lanka, and Thailand Economic Cooperation). Myanmar attended the inaugural June Meeting as an
observer and joined the organization as a full member at a Special Ministerial Meeting held in Bangkok on 22
December 1997, upon which the name of the grouping was changed to BIMST-EC. Nepal was granted observer
status by the second Ministerial Meeting in Dhaka in December 1998. Subsequently, full membership has been
granted to Nepal and Bhutan in 2004.
In the first Summit on 31 July 2004, leaders of the group agreed that the name of the grouping should be known as
BIMSTEC or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.

BIMSTEC priority sectors


BIMSTEC has thirteen priority sectors cover all areas of cooperation. Six priority sectors of cooperation were
identified at the 2nd Ministerial Meeting in Dhaka on 19 November 1998. They include the followings:

Trade and Investment, led by Bangladesh


Transport and Communication, led by India
Energy, led by Myanmar
Tourism, led by India
Technology, led by Sri Lanka
Fisheries, led by Thailand

After the 8th Ministerial Meeting in Dhaka on 1819 December 2005, a number of new areas of cooperation
emerged. The number of priority sectors of cooperation increased from 6 to 13. The 7 new sectors were discussed in
the 1st BIMSTEC Summit and there has been various activities to enhance those co-operations ever since. The
sectors are as follows,

Agriculture, led by Myanmar


Public Health, led by Thailand
Poverty Alleviation, led by Nepal
Counter-Terrorism and Transnational Crime, led by India
Environment and Natural Disaster Management, led by India
Culture, led by Bhutan
People to People contact, led by Thailand

3|P a g e

InternationalDivision

Chairmanship
BIMSTEC uses the alphabetical order for the Chairmanship. The Chairmanship of BIMSTEC has been taken in
rotation commencing with Bangladesh (19971999), India (2000) Myanmar (20012002), Sri Lanka (20022003),
Thailand (20032005), Bangladesh (20052006). Bhutan asked for the skip. So it's turned to India (20062009). In
November 2009, Myanmar hosted the 12th Ministerial Meeting and assumed BIMSTEC Chairmanship. The 13th
Ministerial Meeting also chaired by Myanmar, which was held in Nay Pyi Taw, Myanmar on 22 January 2011.

Cooperation with Asian Development Bank (ADB)


The ADB has become BIMSTEC's development partner since 2005, to undertake a study which is designed to help
promote and improve transport infrastructure and logistic among the BIMSTEC countries. So far, ADB has already
finished the project so called BIMSTEC Transport Infrastructure and Logistic Study (BTILS). The final report of the
said study from ADB has already been conveyed to all members and being awaited for the feedback. Other fields of
cooperation will be designed later on.

BIMSTEC Centre
At the Sixth BIMSTEC Ministerial Meeting on 8 February 2004 in Phuket, Ministers endorsed the setting up of a
Technical Support Facility (TSF). As reflected in the Ministerial Joint Statement, this Technical Support Facility would
"serve the BIMSTEC Working Group (BWG) and to coordinate BIMSTEC activities, including those of the BIMSTEC
Chamber of Commerce, for a trial period of the two years". The decision by the Ministers was based upon the
recommendation proposed by BIMSTEC Senior Officials who met in Bangkok during 1719 September 2003. On this
particular item, the SOM had with them a draft report prepared by Mr. David Oldfield, an ESCAP consultant, on
Towards Setting up a BIMSTEC Technical Support Facility and Permanent Secretariat: Considerations and
Options. The report recommended that a TSF should be set up in Bangkok and would initially serve just the BWG
during the trial period of 2 years.
Since the Establishment of the Permanent Secretariat is awaited to consider in the 2nd Summit, which was held on
1213 November 2008 in India, Thailand had already extended the contract of the BIMSTEC.

BIMSTEC Free Trade Area Framework Agreement

4|P a g e

InternationalDivision

BIMSTEC member countries agreed to establish the BIMSTEC Free Trade Area Framework Agreement in order to
stimulate trade and investment in the parties, and attract outsiders to trade with and invest in BIMSTEC at a higher
level. All members, except Bangladesh because of domestic procedure, became signatories to the Framework
Agreement in the 6th Ministerial Meeting, as witnessed by the Prime Minister of Thailand and BIMSTECs Foreign
Ministers.
Bangladesh later joined the Framework Agreement on 25 June 2004. The Trade Negotiating Committee (TNC) was
set up and had its 1st Meeting in Bangkok on 78 September 2004. As stated in the adopted Terms of Reference,
Thailand would be the permanent chair of TNC although the host country shall be rotated. The chair and each
countrys chief negotiator act as TNCs spokespersons, while TNCs chairperson will report the result via STEOM to
the Trade and Economic Ministerial Meeting. TNCs negotiation area covers trade in goods and services, investment,
economic cooperation, as well as trade facilitations and also technical assistance for LDCs in BIMSTEC. It was
agreed that once negotiation on trade in goods is completed, the TNC would then proceed with negotiation on trade
in services and investment.

Policy Making Body


BIMSTEC Summit:
Summit is the highest policy making and decision making body which is comprised of head of State or head of
government level delegation from member states.

Ministerial Meetings (MM):


Ministerial Meeting is divided into the area of foreign affairs (MM) and the area of trade and economic affairs
(TEMM). While the Foreign Ministerial Meeting acts as prime mover determining the overall policy as well as
recommendations for the Leaders' Summit, Trade and Economic Ministerial Meeting monitors the progress in the
Trade and Investment Sector as well as FTA policy.

Operational Body: Senior Officials' Meeting (SOM)


Senior Officials Meeting (SOM) is divided into the area of foreign affairs and the area of trade and economic affairs
(Senior Trade /Economic Officials Meeting - STEOM). Permanent secretaries of the foreign affairs and that of trade
and economic affairs will be the delegations to their respective forum. Senior Officials' Meetings (SOM) is assigned
5|P a g e

InternationalDivision

to monitor progress of the remaining sectors, which will be reported by the BWG, then forward to the Foreign
Ministerial Meeting.

Senior Trade/ Economic Officials' Meetings (STEOM):


Tasks belonging to the STEOM are the negotiation of the BIMSTEC FTA, cooperation in the Trade and Investment
Sector and its 15 sub-sectors, which are to be reported to the Trade and Economic Ministerial Meeting.

BIMSTEC Working Group


BIMSTEC Working Group in Bangkok is attended by the Director-General or Deputy Director-General of the
Department of International Economic Affairs of Thailand and the Ambassadors of BIMSTEC member countries to
Thailand or their representatives, as well as representatives from other concerned agencies. The meeting takes
place monthly at the Ministry of Foreign Affairs to follow up and push forward progress in each cooperation sector, as
well as to study prospects and policies of cooperation before reporting to the SOM. In this connection, the BIMSTEC
Center has been established in Bangkok since June 2004 to support works the BIMSTEC Working Group.

Joint Working Group


Joint Working Group would be formed to cover many thematic issues as identified in the areas of cooperation.
Director-General and experts from the member states on the subject matter take part in the JWG meeting.

6|P a g e

InternationalDivision

BANGLADESH

Geographic coordinates:

24 00 N, 90 00 E
total: 143,998 sq km

Area:

country comparison to the world: 95


land: 130,168 sq km

Land boundaries:

total: 4,246 km
$305.5 billion (2012 est.)

GDP (purchasing power parity):

country comparison to the world: 44


$288.1 billion (2011 est.)
$270.5 billion (2010 est.)

GDP (official exchange rate):

$118.7 billion (2012 est.)


6.1% (2012 est.)

GDP - real growth rate:

country comparison to the world: 43


6.5% (2011 est.)
6.4% (2010 est.
$2,000 (2012 est.)

GDP - per capita (PPP):

country comparison to the world: 194


$1,900 (2011 est.)
$1,800 (2010 est.)
agriculture: 17.3%

GDP - composition by sector:


7|P a g e

industry: 28.6%

InternationalDivision

Services: 54.1% (2012 est.)

In real terms Bangladesh's economy has grown 5.8% per year since 1996. Although more than half of GDP is
generated through the service sector, 45% of Bangladeshis are employed in the agriculture sector with rice as the
single-most-important product. Bangladesh's growth was resilient during the 2008-09 global financial crisis and
recession. Garment exports, totaling $12.3 billion in FY09 and remittances from overseas Bangladeshis, totaling $11
billion in FY10, accounted for almost 12% of GDP.
The country's economy is based on agriculture. Rice, jute, tea, wheat, sugarcane, and tobacco are the chief crops.
Bangladesh is the world's largest producer of jute. Fishing is also an important economic activity, and beef, dairy
products, and poultry are also produced. Except for natural gas (found along its eastern border), limited quantities of
oil (in the Bay of Bengal), coal, and some uranium, Bangladesh possesses few minerals.
Dhaka and Chittagong (the country's chief port) are the principal industrial centers; clothing and cotton textiles, jute
products, newsprint, and chemical fertilizers are manufactured, and tea is processed. In addition to clothing, jute, and
jute products, exports include tea, leather, fish, and shrimp

Economy of Bangladesh
The economy of Bangladesh is a rapidly developing market-based economy. According to the International Monetary
Fund, Bangladesh ranked as the 44th largest economy in the world in 2012 in PPP terms and 57th largest in nominal
terms, among the Next Eleven or N-11 of Goldman Sachs and D-8 economies, with a gross domestic product of
US$306 billion in PPP terms and US$153.6 billion in nominal terms. The economy has grown at the rate of 6-7% per
annum over the past few years. More than half of the GDP is generated by the service sector; while nearly half of
Bangladeshis are employed in the agriculture sector. Other goods produced are textiles, jute, fish, vegetables, fruit,
leather and leather goods, ceramics, ready-made good.
Selected Economic Indicators (%) - Bangladesh

2013

2014

GDP growth

5.7

6.0

Inflation

7.8

7.0

8|P a g e

InternationalDivision

Current
(share of GDP)

account

balance

2.0

1.0

Source: ADB estimates.


Economic forecasts for FY2013 and FY2014 rest on four assumptions. First, the central banks slight easing in
monetary policy announced in January 2013 will not stoke inflation, given the declining trend in international
commodity prices and a favorable domestic crop outlook. Second, the Government of Bangladesh will contain
subsidies by continuing to raise fuel and electricity prices and thus keep in check its need for bank borrowing. Third,
though political activity is expected to be volatile, social stability will be maintained. And, finally, weather will be
favorable. Principal Crops of Bangladesh are Rice, wheat, jute, cotton, tea, tobacco, sugarcane, pulses, oil seeds,
spices, potatoes, green vegetables, banana, mango, coconut.
GDP growth is projected to edge lower in FY2013 to 5.7%. Export demand, a major contributor to GDP growth in
Bangladesh, is expected to slacken slightly, reflecting the Asian Development Outlook's baseline assumptions that
the euro area economy stagnates and the recovery of the United States remains frail. Despite higher remittances,
growth in demand for private consumption is expected to weaken as households adopt a cautious approach to
spending because of political uncertainties ahead of parliamentary elections expected by early 2014. GDP growth is
projected to recover moderately to 6.0% in that year on the back of gradual rises in exports, consumer spending, and
investment.

Potential Sectors of Growth in Bangladesh


Bangladesh, traditionally known for jute and tea exports, has recently attracted world- wide attention for readymade
garments and leather exports. Bangladesh foresees an expansion of her agricultural sector, as well as increased
diversity in nontraditional industries and business. Below is a short account of a few potential investment areas.
Textile
Bangladesh is a land of nearly 112 million people with annual per capita income of US$ 386. Clothing being the
second basic need there exists a vast market for textile products in this country.
The readymade garments (RMG.) is the manufacturing success story in Bangladesh which exported total USD 19
billion worth of textile products which was around 6.5% of the USD 300 billion global market in 2012-13. Only knit
fabric for the knitted garments and hosiery are domestically produced. But the predominant raw materials for
readymade garments are woven fabrics, most of which are now imported. Due to lack of quality woven fabrics
9|P a g e

InternationalDivision

required by buyers, the readymade garments sector in Bangladesh. Currently 240 readymade garments units spend
approximately 65% of their export earnings on import of fabrics. It is estimated that in order to meet the demand gap
by the year 2015 additional investment in 256 spinning mills (each having 35000 spindles), 571 weaving mills (each
having 500 shuttles or 320 shuttles looms) and 671 dyeing, printing and finishing units (each having production
capacity of 10 million meters annually) will be required to setup.
Leather goods
There is already a substantial domestic leather industry, mostly export-oriented. The leather includes some
readymade garments, although that, aspect is confined mainly to a small export-trade in 'Italian made' garments for
the US market. Footwear is more important in terms of value added, accounting for over US$ 40 million exports in FY
2001-02. The figure rose at US$ 220 million in FY 2010-11. This is the fastest growing sector for leather products.
Bangladesh produces between 2 and 3 percent of the world's leather market. Most of the livestock base for this
production is domestic which is estimated as comprising 1.8 percent of the world's cattle stock and 3.7 percent of the
goat stock. The hides and skins (average annual output is 150 million sq.ft.) have a good international reputation.
Foreign direct investment in this sector along with the production of tanning chemicals appears to be highly
rewarding.
Having the basic raw materials for leather goods as well as for the production of leather shoe, a large pool of cheap
but trainable labor force together with tariff concession facility to major importing countries under GSP coverage
Bangladesh can be a potential off shore location for leather and leather products manufacturing with low cost but
high quality.
Frozen food
The frozen fish export sector is the second largest export sector of the country with annual turnover of US$ 27.02
billion in 2012-13. The average annual growth rate is 20%. This 100% export oriented industry includes the following
sub-sectors which need proper attention for augmentation of production and export earning. Hatcheries-sustainable
aqua-culture technology-feed meals plants-processing unit for value added products. Foreign investment with
technology in this potential sector has been recognized as most viable areas in Bangladesh. This sector has various
incentives for foreign investment/joint venture in one of the above mentioned areas or may be under a composite
project with potential high return.

10|P a g e

InternationalDivision

Jute goods
Bangladesh is one of the leading producers of jute in the world. At present the annual production is 890,000 MT. In
2012-13, Bangladesh exported raw jute and jute goods worth US$ 611 million in the form of sacking hessian, carpet
& carpet backing cloth, jute yarn/twine etc. This is one of the very prospective areas for investment with higher
technology.
Oil and Gas
Bangladesh has an estimated gas reserve of about 23 TCF. Out of this about 14 TCF is considered recoverable. So
far 57 wells have been drilled in 19 discovered gas fields and present production is about 280 BCF per annum. The
government of Bangladesh has decided that future exploration for oil and gas will be done through the private sector
to the maximum extent possible. With this end in view the first round of bidding took place in 1993 and 4 companies
eventually signed Production Sharing Contracts (PSCS) with Rexwood Okland, United Meridiam and Occidental.
Coal
Besides Oil and gas a contract has been signed to extract coal from Barapukuria coal mine in Dinajpur district with a
Chineses consortium designed to extract 1.0 million MT coal a year. Another contract has been signed with a North
Korean company for the extraction of 1.6 million MT hard rock per year at Madhyapara in the same district
Power
Bangladesh is still at a low level of electrification with only 46.5% of it population having access to electricity and per
capita generation is only 136 KW per annum. Hence, there is a great need and urgency to expand the electrification
programs. The government of Bangladesh has attached priority for the development of the power sector. The present
installed generation capacity is 8525MW. But the available generation capacity is about 8500 MW due to old age of
few power plants. The route length of transmission line is 3500 Km, the total length of distribution network is 1,28,000
KM and the number of consumers is 35,00,000 at present.
Bangladesh has amended its Industrial Policy and the power sector is open to private investment. The government
has approved the Private Sector Power Generation. Policy of Bangladesh to attract private investment in power
generation. Under the policy, the private power companies shall be exempted from corporate income tax for a period
of 15 years and the companies will be allowed to import plant and equipment without payment of custom duties and
VAT.Because of the favorable conditions for private investment a large number of Independent power producers
(IPPs) have shown interests for setting up power plants in Bangladesh. A Rural Power Plant is being implemented by
11|P a g e

InternationalDivision

RPC at Mymensingh. A Rural Power Company (RPC) has been created A 60 MW Gas Turbine Power Plant is being
implemented by RPC at Mymensingh. Contracts with four IPPs selected through competitive bidding have already
been negotiated and are expected to be signed shortly. Bids received for setting up a 360 MW combined cycle power
plant at Haripur and 450 MW combined cycle power plant at Meghna Ghat in the private sector are being evaluated.
There is need for more private investment in power generation to meet the increasing demand in future.
The government of Bangadesh has undertaken some reform measures with a view to achieving operational and
management efficiency and commercial characteristics in the power sector. Power Grid Company of Bangladesh
(PGCB) has been created. Initially PGCB will own the transmission lines associated with Meghna Ghat Power
Project. Ultimately it will take over the entire transmission system of the country. Dhaka Electric Supply Company
(DESCO) has been created to manage the distribution area of Mirpur. DESCO will eventually take over the entire
distribution responsibilities of Dhaka metropolitan city area.
Telecommunication
The recent revolution in information technology has opened up a new area for private investment in the
telecommunication sector. Previously in the public sector. this has now been opened up for private investment.
Bangladesh Telegraph and Telephone Board (BTTB) is developing communication facilities with modern technology,
Communications with the outside world are also being developed. Private sector operations in the rural
telecommunications, paging, cellular telephones and reverine radio trucking have already been allowed. BTTB has
already started providing VSAT (Very Small Aperture Terminals) facilities to the private sector. In the meantime two
private companies have been given license for providing telecommunication, till now they have covered 221 upazillas. So far licenses have been issued to four private operators for cellular or mobile telephone services in the
country.
Tourism
With growing international interest in travelling through Asia tourism is taking roots in Bangladesh. Bangladesh offers
a variety of historically significant and culturally unique sites for tourists. Sylhet's tea gardens, Cox's Bazar seabeach, the Royal Bengal Tiger, Deer and the Sundarbans, the largest mangrove forest in the world with unique biodiversity offer tourist attractions. Ancient mosques, Buddhist monasteries, Hindu temples, monuments and other
landmarks dot the countryside. Additional hotel and resort facilities could be created for attracting tourists from home
and abroad. Dhaka and Chittagong also have an unmet demand for additional hotel rooms, restaurants,
entertainment and recreational facilities.
12|P a g e

InternationalDivision

Agriculture
Raw jute, tea, tobacco, vegetables, spices and tropical fruits are the key potential products. Agiculture is the biggest
private sector operation contributing 35% of GDP. The government has gradually removed the contsraints imposed
by state intervention deregulated and liberalised the markets to allow further private participation particularly in the
supply of imputs and distribution of outpus. The govenment has drastically rediced duties and taxes on a rage of
agriculture imputs. Fertizer is exempted from customs duties and VAT.Bangladesh continues to grow about 2 percent
of the world's tea in some 150 plantations on the North-East region of Sylhet. Tropical fruits and vegetables are
grown seasonlly and have recently begun to be exported in various forms. Tobacco farming is also well established.
Agro based industries
Bangladesh has the basic attributes for successful agro based industries, namely, rich alluvial soil, a year-round frost
free environment, an adequate water supply and an abundance of cheap labour. Increased cultivation of vegetables,
spices and tropical fruits now grown in Bangladesh could supply raw materials to local agro processing industries for
both domestic and export markets. Progressive agricultural practices, improved marketing techniques and modern
processing facilities would enable the agro processing industry to improve its quality and expand production levels
significantly. Computer software development, data entry & data processing. Availability of substantial number of
unemployed qualified young people in various branches of engineering, science and technologies have opened up
the scope of profitable investment in these sectors. Comparatively short training period and low investment have
made such ventures highly profitable.
.

13|P a g e

InternationalDivision

BHUTAN
Geographic coordinates:

27 30 N, 90 30 E

Area:

total: 38,394 sq km
country comparison to the world: 137
land: 38,394 sq km
water: 0 sq km

Natural resources:

timber, hydropower, gypsum, calcium carbonate

GDP (purchasing power parity):

$5.036 billion (2012 est.)


country comparison to the world: 171
$4.591 billion (2011 est.)
$4.23 billion (2010 est.)

GDP (official exchange rate):

$2.196 billion (2012 est.)

GDP - real growth rate:

9.7% (2012 est.)


country comparison to the world: 12
8.5% (2011 est.)
11.7% (2010 est.)

GDP - per capita (PPP):

$6,800 (2012 est.)


country comparison to the world: 142
$6,200 (2011 est.)
$5,800 (2010 est.)

GDP - composition, by sector of origin:

agriculture: 16.7%
industry: 45.4%
services: 37.9% (2011 est.)

GDP - composition, by end use:


14|P a g e

household consumption: 36.3%

InternationalDivision

government consumption: 22.5%


investment in fixed capital: 63.6%
investment in inventories: 0%
exports of goods and services: 37.4%
imports of goods and services: -59.9%

Bhutan's economy is based on agriculture and forestry, which provide the main livelihood for more than 40% of the
population. Agriculture consists largely of subsistence farming and animal husbandry. The economy is closely
aligned with India's through strong trade and monetary links. Model education, social, and environment programs
are underway with support from multilateral development organizations. Each economic program takes into account
the governments desire to protect the country's environment and cultural traditions.
The 2010 FDI Policy of Bhutan is more liberal than the earlier one. It allows foreign investors 100 percent equity in
many of the priority activities in the service sector. In other priority sectors foreign investors are allowed to hold up to
74 percent equity. In keeping with the policy of promoting only high end tourism in Bhutan, they encourage
investment in hotels and resorts that are rated five stars and above. 100 percent equity is allowed for investment in
these high end facilities. The equity ceiling for 4 star hotels is 74 percent. On the other hand, 3 star hotels and below
fall in the negative list of our FDI Policy and building such facilities are discouraged.
They believe that the peace and political stability in the country against the backdrop of a pristine natural environment
with clean, fresh air makes Bhutan an ideal place to establish high quality educational institutions as well as high end
hospitals and wellness centers. Accordingly, investors are allowed up to 100 percent equity in establishing high
quality schools and colleges. Investors can also hold 100 percent equity in establishing specialized medical services.
Investors are also welcome to build industrial estates, knowledge cities, special economic zones, IT parks, dry ports,
outdoor sports and recreation centers like golf courses and sports cities with up to 100 percent equity on a publicprivate partnership model.
Investment in activities where foreign equity is allowed up to 74 percent include construction services, waste
management services, recycling of domestic waste, water supply and management, urban water treatment and
supply and consultancy services. Investment in agro based production such as organic farms, agro processing,
poultry, fisheries, floriculture, health food, dairy and horticulture are also encouraged with up to 74 percent foreign
15|P a g e

InternationalDivision

equity holding. 74 percent foreign equity is also allowed in manufacturing activities such as electronics, computer
hardware and building materials. While Bhutans population is too small to be a significant market, there are several
advantages for those who are interested in exploring business opportunities in my country. Goods manufactured and
produced in Bhutan will have easy access to the large Indian market and through India to other neighbouring
countries and beyond. We enjoy peace and political stability and our natural environment is largely unspoiled. English
is spoken widely. Infrastructure is improving and there is reliable power supply at a very good price compared to
anywhere else in the world. For Indian investors, there is also the additional incentive

Economic performance
Economic growth moderated to 7.5% in fiscal year 2012 (ended 30 June 2012) from 10.0% a year earlier. The
slowdown reflected credit measures taken by the Royal Monetary Authority (RMA) to curb Bhutan's escalating
balance of payments deficit with India and alleviate the rupee liquidity crunch. Both general and specific credit
restrictions were implemented to constrain imports that are a large component of consumer and investment
spending. Reflecting the measures, growth in consumption, which accounts for about three-fifths of gross domestic
product (GDP), slowed to 7.8% in FY2012 from 10.0% in FY2011.
Selected Economic Indicators (%) - Bhutan 2013

2014

GDP growth

8.6

8.5

Inflation

9.3

7.4

-20.0

-20.0

Current
(share of GDP)

account

balance

Source: ADB estimates.


Growth is expected to recover in FY2013 and reach 8.6%, driven mainly by hydropower and tourism. The
contribution of the service sector to growth is expected to improve as the government develops the Bhutans tourism
potential. As this trend is likely to continue, 8.5% growth is expected in FY2014.

Potential Sectors of Growth in Bhutan


Bhutan has a competitive advantage to investors for the India companies to invest in Bhutan. Political and economic
stability, peace and security, and zero tolerance to corruption are some of the advantage investors can enjoy in

16|P a g e

InternationalDivision

Bhutan. Education, health, tourism and hospitality, IT and financial services are some of the sectors investors can
invest.
There is immense scope to further deepen the level of economic cooperation at the business-to-business level as
well as in partnership with the government to participate meaningfully in the industrialization process of Bhutan and to
reap mutual benefits, said the Prime Minister.
About 4/5th of imports into Bhutan are from India and India is engaged meaningfully in the energy sector but the
enormous hydel potential of Bhutan to the tune of 33,000 mega watt (MW) of which about 1,400 MW has been
harnessed and whatever more India do their in the sector that will actually change the numbers when it comes to
trade with more power getting exported to India and connecting to our grids and that would bring in a very healthy
economic partnership.

Information technology (IT)

ITeS (information technology enabled services),

Manufacturing,

Engineering for infrastructure development,

Hydropower

Are certain areas where Bhutan can further take the engagement for benefit and shared prosperity of people
Bhutan is extremely keen to attract more investments from India and they have made FDI (foreign direct investment)
regulations more conducive to Indian investors by permitting investment in Indian rupees and by allowing them for
majority shareholding.
The Kingdom of Bhutan, a tiny Himalayan nation with a population of just under 800,000, has long remained isolated
from global trade and foreign investment. Although Bhutans economy is one of the worlds smallest, it posted 9.9%
GDP growth in 2012 and is forecasted by the IMF to achieve 13.5% GDP growth in 2013. This economic expansion
is being driven by Bhutans sizeable hydropower potential, agriculture and forestry products, and tourism appeal. The
country has also pioneered the concept of Gross National Happiness and has taken measures to ensure that its
economic development aligns with its goals for environmental conservation, social well-being, and educational
attainment. With duty-free access to the vast Indian market and comparatively cheap energy costs, Bhutan is a
compelling frontier economy with a unique focus on sustainability.
17|P a g e

InternationalDivision

Hydropower Potential
o

Prioritized in Bhutans Five-Year Plan, hydropower exports to India have steadily grown

Hydropower generates over half of the governments annual revenues and accounts for 12% of
GDP

Current installed capacity is only 6% of Bhutans total potential hydropower capacity

Duty-Free Access to India


o

Bhutan is surrounded on three sides by India, with 190 million people living near its southern
border

Treaty of Friendship allows free trade between India and Bhutan and duty-free exports to the
Indian market

History of close bilateral economic, political, and military ties

Advantageous Location & Geography


o

Bordered by India, one of the worlds economic engines and a key trade partner

Growing regional trade ties with Bangladesh, Hong Kong, Japan

Extensive hydropower potential; movement to brand Bhutan as an organic producer

71% of the country has forest cover; opportunities to export medicinal plants, oils, and nuts

Attractive Destination for High-End Tourism


o

Bhutans tourism policy of low volume, high quality attracts well-heeled travelers

Average tourist spending is $1,300 versus the world average of $982

Prime destination for groups focusing on ecological, cultural, and religious attractions

Government aims to attract 100,000 tourists by 2013; opportunities for boutique hotels and ecolodges

Favorable Policies towards Foreign Investment


o

Liberal foreign ownership laws; 10-year corporate tax-holiday for exporters

Repatriation of invested capital and capital gains

Historic lack of FDI; government is eager to attract investment in priority industries

18|P a g e

InternationalDivision

Positive Political and Demographic Signs


o

Transitioning to democracy; stable government (monarchy is still loved)

Good governance, low corruption (ranked in worlds top quartile on Corruption Perceptions Index)

Proponent of Gross National Happiness Index; defense expenditure <1% of GDP

Free public education and healthcare; all schools are taught in English

The Role of Private Equity


Bhutan has historically been isolated and its economy has been constrained by a lack of foreign investment.
Although small and medium enterprises (SMEs) have accounted for 93% of newly-established businesses in Bhutan
over the past five years, financing is hard to come by Bhutan ranks in the bottom 1/3 of all countries in terms of
access to credit. This shortage of financing makes it difficult for local firms to achieve economies of scale and
capitalize on the duty-free access Bhutanese producers have to the huge Indian market.
However, private equity firms can address these problems by working as strategic partners and serving as catalysts
for greater capital inflow. PE firms can provide attractive funding alternatives such as risk sharing equity positions
that are often preferred by entrepreneurs over exorbitantly high debt rates. In addition, optimal capital structures help
create sustainable business models. In the case of Bhutan, private equity firms can facilitate knowledge transfers and
support SMEs by providing capacity development, strategy coaching, and management and technical assistance.

19|P a g e

InternationalDivision

Myanmar

Geographic coordinates:

22 00 N, 98 00 E
total: 676,578 sq km

Area:

country comparison to the world: 40


land: 653,508 sq km

Land boundaries:

total: 5,876 km
$89.23 billion (2012 est.)

GDP (purchasing power parity):

country comparison to the world: 77


$84.02 billion (2011 est.)
$79.67 billion (2010 est.)

GDP (official exchange rate):

$54.05 billion (2012 est.)


7.6% (2013 est)

GDP - real growth rate:

6.2% (2012 est.)


country comparison to the world: 39
5.5% (2011 est.)
5.3% (2010 est.)
$1,400 (2012 est.)

GDP - per capita (PPP):

country comparison to the world: 203


$1,300 (2011 est.)
$1,300 (2010 est.)

20|P a g e

InternationalDivision

agriculture: 38.8%
GDP - composition by sector:

industry: 19.3%
services: 41.8% (2012 est.)

Burma is a resource-rich country and has initiated notable economic reforms. In October 2011, 11 private banks were
allowed to trade foreign currency. On April 2, 2012, Burma's multiple exchange rates were abolished and the Central
Bank of Myanmar established a managed float of the Burmese kyat. In November 2012, President THEIN SEIN
signed a new Foreign Investment Law. Despite these reforms, the Burmese government has not yet embarked on
broad-based macro-economic reforms or addressed key impediments to economic development such as Burma's
opaque revenue collection system. Key benchmarks of economic progress would include steps to ensure the
independence of the Central Bank, provide budget allocation for social services, and enact laws to protect intellectual
and real property. The most productive sectors will continue to be in extractive industries - especially oil and gas,
mining, and timber - with the latter two causing significant environmental degradation. In July 2012, as a result of
reforms undertaken by President THEIN SEIN and his nominally civilian government, the US broadly eased
restrictions on new investment in and the export of financial services to Burma. In November 2012, the US eased the
import bank on Burmese products to the US with the exception of jadeite and rubies. Although the Burmese
government has good economic relations with its neighbors, significant improvements in economic governance, the
business climate, and the political situation are needed to promote serious foreign investment. Natural gas, Jade,
Timber, Pulses & Beans Marine products, Raw Rubber, Garment, Rice. Main Imports: Petroleum products,
Machinery, Iron & Steel, Plastic raw, Palm oil, Vehicles & spares, Pharmaceuticals, Cement, Fertilizer.

Economic performance
Growth in Myanmar's gross domestic product (GDP) quickened to an estimated 6.3% in fiscal year 2012 (ended 31
March 2013) compared with an average of 5% in the previous 5 years. The pickup reflects business optimism buoyed
by the governments steps since 2011 to liberalize the economy and prospects for further reform. A modest
slowdown in agricultural growth in FY2012, partly reflecting floods in August 2012, was more than offset by increases
in industrial output and services.

21|P a g e

InternationalDivision

(Official national accounts data are available only on an annual basis with a 2-year lag and they show considerably
higher rates of GDP growth, which are inconsistent with correlates of growth such as energy use.)
Selected Economic Indicators (%) - Myanmar 2013

2014

GDP growth

6.5

6.7

Inflation

5.1

5.1

-4.2

-4.4

Current
(share of GDP)

account

balance

Source: ADB estimates.


( US $ in million )
Sr.

Existing Enterprises
Particulars

No.

No.

Approved

Amount

Oil and Gas

64

13665.028

41.54

Power

13207.921

40.15

Mining

2304.496

7.00

Hotel and Tourism

32

1335.475

4.06

Manufacturing

166

1528.472

4.65

Real Estate

275.000

0.84

Industrial Estate

179.113

0.54

Agriculture

156.670

0.48

Transport & Communication

137.676

0.42

22|P a g e

InternationalDivision

10

Livestock & Fisheries

87.712

0.27

11

Other Services

22.127

0.07

Total

316

32899.690

100.00

Economic prospects
Economic growth is forecast to rise gradually to 6.5% in FY2013 and 6.7% in FY2014. Projections assume the
government will maintain momentum on policy reform over the medium term.
Growth will get a lift from the European Unions proposed reinstatement of preferential access for Myanmars exports
under the Generalized System of Preferences and the United States suspension of its ban on imports from
23|P a g e

InternationalDivision

Myanmar. Two large gas fields, Shwe and Zawtika, are expected to come online in FY2013, more than doubling gas
production and raising exports to the People's Republic of China (PRC) and Thailand. Higher gas exports, greater
access to international markets, and faster economic growth in key markets such as the PRC will support growth in
exports. Visitor arrivals are likely to post further large gains.

Potential Sectors in Myanmar


Livestock and Fishery
a long sea coastline of 2,832 kilometers associated with 229,000 square kilometers of continental shelf and 486,000
square kilometers of exclusive economic zone potential in fresh water fisheries.
Fishing right is not granted to foreign investors Foreign investors are allowed for breeding in livestock and fisheries
sector such as freshwater fisheries and marine fisheries production of value added products together with ice plant,
processing plant and cold storage are allowed either in the form of hundred percent foreign- owned or joint venture
Production of animal feed products. Value-added marine products industries are very promising.
Forestry
Very rich in forest. Myanmar teak is highly reputable in the world market. It has a large variety of timber species with
some lesser known species. Production of value added wood based products is a prosperous business area for
investment
Mining
Rich in mineral resources such as copper, gold, lead, zinc, silver, tin and tungsten, antimony, chromium and nickel.
Energy Business
Rich natural energy resources. Abundant hydropower potential. FDI welcome from South Asian countries for energy
cooperation. Private companies to invest in offshore and onshore oil and gas exploration projects.
Hydropower projects
Several power plants are under implementation which respectively are located in Mandalay, Magway, Bago divisions,
and Rakhine state as well as Chindwin river valley.
Location
24|P a g e

InternationalDivision

Myanmar is the largest country on mainland Southeast Asia, sharing borders with Bangladesh, India, China,
Laos and Thailand

Strategically located as the gateway to a potential market of 2 billion consumers, Myanmar links Southeast
Asia, China and the Indian sub-continent

Existing well-established trade channels link Myanmar to China, Singapore, Japan, Thailand, Malaysia and
India and further regional links are being developed

Myanmar has a long coastline, with access to major Indian Ocean shipping lanes. It is developing new
deep-sea ports to take advantage of this. Ports development is being integrated with the enhancement of
regional trade corridors

Natural resources endowment

Much of Myanmar's economic development will be the result of the country's stock of natural resources

Substantial reserves of relatively untapped natural resources exist, including petroleum, timber, tin, zinc,
coal, lead, marble, natural gas, hydropower and precious gems, such as rubies and jade

25|P a g e

InternationalDivision

NEPAL

Geographic coordinates:

28 00 N, 84 00 E
total: 147,181 sq km

Area:

country comparison to the world: 94


land: 143,351 sq km

Land boundaries:

total: 2,926 km
$40.49 billion (2012 est.)

GDP (purchasing power parity):

country comparison to the world: 102


$38.7 billion (2011 est.)
$37.25 billion (2010 est.)

GDP (official exchange rate):

$19.42 billion (2012 est.)


4.6% (2012 est.)

GDP - real growth rate:

country comparison to the world: 71


3.9% (2011 est.)
4.8% (2010 est.)
$1,300 (2012 est.)

GDP - per capita (PPP):

country comparison to the world: 209


$1,300 (2011 est.)
$1,200 (2010 est.)
agriculture: 38.1%

GDP - composition by sector:


26|P a g e

industry: 15.3%

InternationalDivision

services: 46.6% (2012 est.)

In Nepal agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and
accounting for a little over one-third of GDP. Industrial activity mainly involves the processing of agricultural products,
including pulses, jute, sugarcane, tobacco, and grain. Nepal has considerable scope for exploiting its potential in
hydropower, with an estimated 42,000 MW of feasible capacity. The economic structure of Nepal is also changing
gradually with a decreasing trend of contribution of agriculture and industry to the GDP while that of services sector
increasing. In 2012, agriculture accounted for 35.3%, services 50.3%, and industry 14.4% of Nepal's GDP.
Agriculture employs 76% of the workforce, services 18% and manufacturing/craft-based industry 6%.
Nepal's largest trading partner is India. The share of exports and imports of Nepal with India is very high. According
to Nepal Rastra Bank data in Fiscal Year 2010/11, share of Nepals trade with India is 67.5% of total trade while
share with other countries is 32.5%. Share of total Exports of Nepal to India is 66.9% and to other countries is 33.1%.
Likewise, the share of total Imports from India is 67.6% and from other countries is 32.4%.
Nepals Top 20 Exports and Imports Partner countries are the following:

Exports: India, USA, Bangladesh, Germany, China P.R., UK, France, Italy, Canada, UAE, Japan,
Singapore, Turkey, Australia, Belgium, Hong Kong, Switzerland, Netherlands, Denmark, Spain.

Imports: India, China P.R., Saudi Arabia, Indonesia, Singapore, Thailand, UK, Argentina, Japan, Malaysia,
USA, UAE, Korea R, France, Australia, Germany, Ukraine, Switzerland Taiwan, Hong Kong.

Nepalese export of major commodities to India are Textiles, Thread, Cardamom, Noodles, Polyster yarn, Juice, Zinc
sheet, Jute goods, M.S.pipe, Copper wire, tooth paste, Catechu, Herbs etc. Export of major commodities to other
countries are Pulses, Cardamom(large), Medicinal Herbs, Woollen goods, Nepalese paper, Carpets, readymade
Garments, Handicrafts, Ornaments and pashmina.
Import of selected commodities from India are Petroleum Products, Transport Equipments, M.S. Billet, Medicine,
Cement, Agricultural Spare Parts, Other Machinery Spare parts, Hot and Cold Roll sheet, M.S. ware Rod etc.
Likewise imports of selected commodities from other Countries are Gold, Electrical goods, Medicine, Transportation
equipments, Computer parts, Telecommunication accessories, Crude palm and Soybeans oil, Cloths, Aeroplane
spare parts etc.

27|P a g e

InternationalDivision

Economic performance
Gross domestic product (GDP) rebounded to 4.6% in fiscal year 2012 (ended 15 July 2012), boosted by a favorable
monsoon and robust services growth despite a slowdown in industry and lingering political uncertainties. Agricultural
output grew by 4.9%, the highest rate in 4 years, while the 5.1% advance in services reflected a pickup in tourism
and remittances-backed consumer spending.
Selected Economic Indicators (%) - Nepal 2013

2014

GDP growth

3.5

4.2

Inflation

10.5

9.0

Current account balance


(share of GDP)

-0.5

-1.8

Source: ADB estimates.

Economic prospects
The economic outlook for Nepal hinges on how political uncertainties are resolved, the weather, and remittance
inflows. Investor confidence is depressed by concerns over the political transition, now in its fifth year, following the
dissolution in May 2012 of the Constituent Assembly, which failed to agree on a constitution. Recently, the political
parties agreed to form a caretaker government led by the Chief Justice.
In view of the unfavorable monsoon, the lack of a parliamentary-approved full budget, and subdued growth in India,
GDP is projected to slow to 3.5% in FY2013. Production of paddy is projected to fall by 11.3%, maize by 8%, and
millet by 2%. While the industry sector performance is expected to remain weak, services growth is expected to
continue to grow at around 5.4%. With a favorable monsoon, adequate fertilizer supplies, the timely adoption of a
budget, and moderate expansion of remittances, GDP growth would rebound to 4.2% in FY2014.

Potential Sector in Nepal


Sectors
Nepal has has great potential for investment, and the country is pursuing a liberal Foreign Direct Investment (FDI)
policy to create an investment-friendly environment to attract FDI. The major areas of investment include
hydropower, manufacturing, services, tourism, construction, agriculture, and mineral and mining.
28|P a g e

InternationalDivision

Hydropower
Nepal has the capacity to generate 83,000 MW of hydroelectricity, of which about 43,000 MW is techno-economically
feasible. At the end of 2011, only about 700 MW was generated from hydropower projects. Of that total, 174.53 MW
(24.9%) was generated through private investment. Nepalese industries and consumers suffer from huge power cuts
each year. The annual domestic energy demand is estimated at 4,833.35 GW, of which 3,850.87 GW is generated
from various sources and the remaining 982.48 GW is cut as load shedding. Nepal is unable to meet the demand,
and approximately 694.05 GW is imported from India annually.
The Government of Nepal (GON) has already declared a national power crisis. So far, the Nepal Electricity Authority
(NEA) has signed Power Purchasing Agreements (PPAs) worth 714.77 MW during 2011, which is almost double the
total capacity of power purchase agreements signed in the past. The total capacity of PPAs signed has reached
1118.35 MW
Tourism
Nepal's abundance of natural resources, diverse culture and ethnicity, numerous archaeological and heritage sites,
and diverse topography, including eight of the worlds ten highest peaks (including Mt. Everest), are some of the
attractions for potential investment.
World heritage sites such as Lumbini (the birth place of Buddha), Chitwan National Park, Sagarmatha National Park,
Pashupatinath, Swayambhunath, Bouddhanath, Changu Narayan, Kathmandu Durbar Square, Bhaktapur Durbar
Square, and Patan Durbar Square are attractions to tourists worldwide.
Nepal offers a variety of interests to tourists, ranging from cultural tourism, nature/eco-tourism, adventure tourism,
health and education tourism and religious tourism. The Himalayas, foot trails, rafting, paragliding, fauna, religious
sites, eco-tourism and biodiversity are potential areas for investment.
Industrial Manufacturing
The GON has promulgated a new Industrial Policy 2010 to develop the industrial sector and to provide protection and
facilities to investors. Similarly, the draft of a Foreign Investment Policy has been prepared. Industrialization is
considered one of the most vital indicators of economic growth and prosperity of the nation. Therefore, the GON is
committed to supporing industrialization by establishing industries based on agriculture and local resources in rural
sector, and establishing and developing industrial zones in urban areas.
Steelrolling mills, cement, cigarettes, jute, sugar, tea, beer, carpets, garments, textiles, oilseed mills, and food mills
are some of the most viable areas for investment in manufacturing and production industries in Nepal.
Agriculture
29|P a g e

InternationalDivision

Agriculture isthe mainstay of the Nepalese economy, contributing approximately one-third of total GDP. A total of
74% of the total population still depends on agriculture for their subsistence. However, the growth rate of agriculture
has not been encouraging, due to low investment both by the GON and the farmers themselves.
Nepal has great potential in tea, ginger, cardamom, and sugarcane production, which have high demand in the
international market. Rice, wheat, and maize are the main food crops, and mustard, soybean and sunflower are the
major oilseeds. Potato, lentil, tobacco and jute are the major cash crops, which have high demand in local market.
The Terai, Hills, and Mountains are suitable for various types of agriculture. There is considerable scope for
commercial farming, tea, cardamom, coffee, honey, and ginger.
Mine and Minerals
The GON has formulated acts and regulation to promote mineral exploration and development in the country. Two
separate acts and corresponding regulations exist to deal with different minerals. These are categorized into:
1. All mineral resources (except petroleum)
2. Petroleum
There are several areas in which to invest in commercially viable mining and mineral industries. Limestone, dolomite,
quartz, talc, coal, peat, precious and semiprecious stones, and brine water (salt) are some of the economic minerals
used by cement, soap, marble, paper, dead burnt magnesite, and agriculture lime industries. The promotion of gum
industries is highly recommended. Ruby, sapphire, tourmaline, aquamarine, garnet, kyanite, and quartz crystals also
have high potential in Nepal. International companies can invest in cement, coal, petroleum exploration and
production, and precious and semiprecious stone.

Service
Possible sectors for investment in service industries inclue medical colleges, schools, hospitals, and IT businesses.
Information and Communication
IT includes telecommunications, electronic media, print media, postal services, and the development and production
of motion pictures in Nepal. The tele-density per hundred persons is 27, which includes the involvement of the private
sector. At present, 70% of the population has access to television; however, a much larger percentage has access to
mobile phone services. Difficulties have arisen in the expansion and development of these services to rural areas
due to geographical complexities and the lack of infrastructure development.
30|P a g e

InternationalDivision

The GON aims to promote national unification by providing access to all in the IT sector. The government plans to
establish a optical fiber network in all 75 districts of Nepal by 2015. Therefore, there is the increased opportunity for
private sector investment in this sector.
Infrastructure Development
Highways, airways, and rural roads connect all districts of Nepal. Hydroelectricity projects of varying scopes are in
process and construction, and various international organizations are engaged. Plans to build a fast-track road linking
the capital city to international airports and other locations are being formulated

31|P a g e

InternationalDivision

Sri Lanka

Geographic coordinates:

7 00 N, 81 00 E
total: 65,610 sq km

Area:

country comparison to the world: 122


land: 64,630 sq km

Land boundaries:
$125.3 billion (2012 est.)
GDP (purchasing power parity):

country comparison to the world: 67


$118.2 billion (2011 est.)
$109.2 billion (2010 est.)

GDP (official exchange rate):

$59.2 billion (2012 est.)


6% (2012 est.)

GDP - real growth rate:

country comparison to the world: 44


8.3% (2011 est.)
7.8% (2010 est.)
$6,100 (2012 est.)

GDP - per capita (PPP):

country comparison to the world: 145


$5,800 (2011 est.)
$5,400 (2010 est.)
agriculture: 12%

GDP - composition by sector:


32|P a g e

industry: 30.1%

InternationalDivision

services: 57.9% (2012 est.)

Sri Lanka continues to experience strong economic growth following the end of the 26-year conflict with the
Liberation Tigers of Tamil Eelam (LTTE). The government has been pursuing large-scale reconstruction and
development projects in its efforts to spur growth in war-torn and disadvantaged areas, develop small and medium
enterprises and increase agricultural productivity. Fiscal consolidation efforts and strong GDP growth in recent years
have helped bring down the government's fiscal deficit. Growth slowed to 3.5% in 2009. Economic activity rebounded
with the end of the war and an IMF agreement, resulting in two straight years of 8% growth in 2010-11. Growth
moderated to about 6% in 2012. Agriculture slowed due to a drought and weak global demand affected exports and
trade. In early 2012, Sri Lanka floated the rupee, resulting in a sharp depreciation, and took steps to curb imports. A
large trade deficit remains a concern. Strong remittances from Sri Lankan workers abroad have helped to offset the
trade deficit.

Economic performance
After growing at a robust 7% in the first half of 2012, economic growth slowed in the second half to record annual
expansion of 6.4%. This was the first time growth fell below 8% since the civil conflict ended, largely reflecting weak
external demand, tight monetary conditions, and bad weather, as 15 of Sri Lanka's 25 districts suffered drought that
affected agriculture and hydropower generation.
Selected Economic Indicators (%) - Sri Lanka 2013

2014

Gross Domestic Product (GDP) growth

6.8

7.2

Inflation

7.5

6.5

-5.0

-4.5

Current
(share of GDP)

account

Source: ADB estimates.

33|P a g e

balance

InternationalDivision

Economic prospects
Private consumption expenditure, which accounts for about 70% of GDP, will remain the main engine of economic
expansion, fuelled by rising incomes and remittances from Sri Lankans abroad. Investments are expected to expand
further in 2013, with higher growth in construction buoyed by large infrastructure projects. Slow recovery in the euro
area, Sri Lankas largest export market, would continue to constrain growth potential somewhat. Exports will have to
wait at least another year for a stronger recovery because weak external demand will continue in 2013. From the
supply side, expansion is expected in services, led by the hotels and other tourism-related activities, along with
growth in external and domestic trade. Agriculture is expected to improve with normal weather.
Economic growth will be subject to constraint from the balance of payments. Larger imports associated with high
economic growth will worsen the trade deficit and - unless financed by exports, workers remittance, and capital
inflow - depreciate the currency. Because of the need to address inflation, the monetary policy stance set at the end
of 2012 is not expected to be relaxed, which will restrain economic growth. As such, growth of Sri Lanka's gross
domestic product is expected to edge up to 6.8% in 2013 and then advance by 7.2% in 2014 on better external
conditions.

Tourism & Leisure


34|P a g e

InternationalDivision

The tourism sector has been experiencing an impressive growth both in terms of tourist arrivals and in foreign
exchange revenues after the restoration of peace and normalcy in the country in 2009. Achieving another remarkable
milestone in the country's booming tourism industry, tourist arrivals reached one million in 2012, an increase of 17%
over 2011 and foreign exchange earnings exceeded US$ 1 billion, an increase of 16% over 2011.
The Sri Lankan government has identified the Tourism sector as a key growth area in post-conflict development with
an ambitious target of attracting 2.5 million visitors by 2016. The Board of Investment (BOI), the agency tasked with
attracting Foreign Direct Investments (FDI) to Sri Lanka, has been playing a pivotal role in executing this strategy, by
attracting top tier tourism and hotel investors to the country. Companies that have already committed major
investments include the premier Asian luxury hotel chain, the Shangri-La Group (Hong Kong/Singapore), India's
upscale ITC Group, Thailand's Minor Group, Spain's RIU Hotels & Resorts, Singapore's Aman Resorts, Banyan Tree
Group Singapore and the Mustafa Group of Singapore
Infrastructure
The massive infrastructure development drive currently in progress is expected to support the country to maintain a
high and sustainable growth in the medium and long term. Timely development of economic infrastructure will help to
increase economic efficiency while expanding the production capacity of the economy, facilitate productivity
enhancement and reduction of regional disparity. In 2012, the economic infrastructure development programme of
the government focused on all areas of infrastructure; development of roads, water supply and sanitation, ports and
aviation, transport, housing and urban development, establishment of industrial zones, hospitals and warehousing
and logistic centres etc.
Sustaining the high growth momentum recorded during the past year, the construction sub sector recorded an
impressive growth of 21.6 per cent compared to 14.2 per cent in 2011. This is the highest growth registered by the
sub sector in the past ten years. The sub sector contributed to 8.1 per cent of the overall GDP and 23.9 per cent of
the change in GDP growth from 2011 to 2012 becoming the growth driving sub sector in the Industry sector.
Agriculture
There are significant opportunities for investors in the agriculture sector both for the domestic market and for value
added exports. The agriculture sector plays a key role in the country's economic development and its new role has
been redefined in the light of the development goals of the nation.
The agriculture sector contributes 11.1% to the GDP of the country, 23.9% of total export earnings and 31% of
national employment in the year 2012.
The three main traditional export crops from Sri Lanka are Tea, Rubber and Coconut. Since these industries are
already well established, the main focus of BOI is in terms of developing other agricultural crops particularly by
35|P a g e

InternationalDivision

enhancing domestic value addition. The government looks for specialised investment to improve productivity, level of
technology innovation, access to international markets, use of quality seeds and planting materials and improve
overall value addition.
Education
The role of especially Higher Education is a major driver of economic development in Sri Lanka. Higher Education in
the country is now in a unique position, as Sri Lanka's future in the global knowledge economy depends critically on
the country's human capital.
As the country is geared to take off and advance as a fast growing middle income country, it is critically important that
Sri Lanka has the human capital needed to compete with the global knowledge economy. Thus Sri Lanka needs a
higher education system which can produce skilled, hard working and enterprising graduates. Also the country needs
a research an innovation capacity capable of promoting dynamic economic development.
The knowledge hub initiative will help to develop Sri Lanka as a destination for investments in Higher Education and
position the nation as a centre of excellence and regional hub for learning and innovation.

36|P a g e

InternationalDivision

THAILAND

Geographic coordinates:

8 00 N, 30 00 E
total: 644,329 sq km

Area:

country comparison to the world: 42


total: 5,413 km

Land boundaries:
$9.664 billion (2012 est.)
GDP (purchasing power parity):

country comparison to the world: 153


$21.47 billion (2011 est.)
$21.16 billion (2010 est.)

$11.45 billion (2012 est.)


GDP (official exchange rate):
-55% (2012 est.)
GDP - real growth rate:

country comparison to the world: 220


1.4% (2011 est.)

$900 (2012 est.)


GDP - per capita (PPP):

country comparison to the world: 220


$2,200 (2011 est.)
$2,500 (2010 est.)

37|P a g e

InternationalDivision

GDP - composition by sector:

With a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export
industries, Thailand achieved steady growth due largely to industrial and agriculture exports - mostly electronics,
agricultural commodities, automobiles and parts, and processed foods. Thailand is trying to maintain growth by
encouraging domestic consumption and public investment to offset weak exports in 2012. Unemployment, at less
than 1% of the labor force, stands as one of the lowest levels in the world, which puts upward pressure on wages in
some industries. Thailand also attracts nearly 2.5 million migrant workers from neighboring countries. The Thai
government is implementing a nation-wide 300 baht ($10) per day minimum wage policy and deploying new tax
reforms designed to lower rates on middle-income earners. The Thai economy has weathered internal and external
economic shocks in recent years. The global economic crisis severely cut Thailand's exports, with most sectors
experiencing double-digit drops. In 2009, the economy contracted 2.3%. However, in 2010, Thailand's economy
expanded 7.8%, its fastest pace since 1995, as exports rebounded. In late 2011 growth was interrupted by historic
flooding in the industrial areas in Bangkok and its five surrounding provinces, crippling the manufacturing sector.
Industry recovered from the second quarter of 2012 onward with GDP growth at 5.5% in 2012. The government has
approved flood mitigation projects worth $11.7 billion, which were started in 2012, to prevent similar economic
damage, and an additional $75 billion for infrastructure over the next seven years with a plan to start in 2013.

Economic performance
The economy rebounded last year from flooding that swamped industrial estates, farmland, and parts of the capital
Bangkok in late 2011. GDP rose by 6.4% in 2012 compared with just 0.1% in the previous year.
Private consumption increased by 6.6% to contribute about half of total GDP growth. Consumption was stimulated by
demand to replace household items after the floods and by several government policies. These included increases in
minimum wages by up to 40% in seven provinces and in public service salaries, a tax rebate to first-time buyers of
domestically made cars, which some 1.2 million car buyers took advantage of, tax breaks for first-time buyers of
houses, and a government decision to buy unmilled rice from farmers at prices well above international levels.
Growth in employment and wages supported consumption, as average wages rose by 11.8% and employment by
1.2%. The unemployment rate fell to just 0.5% by year-end.

38|P a g e

InternationalDivision

Fixed capital investment rose by 13.3%, propelled by the reconstruction of flood-damaged factories, houses, and
other infrastructure and the replacement of capital equipment. Public construction was spurred by the building of
mass rapid transit projects in Bangkok and mobile telecommunications networks.
However, external demand weakened last year due to sagging economic growth in major markets and disruption to
export-oriented manufacturing caused by the floods. Net exports of goods and services acted as a drag on GDP
growth.
Selected
Thailand

Economic

Indicators

(%)

2013

2014

GDP growth

4.9

5.0

Inflation

3.2

3.1

0.8

0.1

Current
(share of GDP)

account

balance

Source: ADB estimates.

Economic prospects
After the rebound in 2012, economic growth is expected to moderate to about 5% this year and next, the pace seen
in the 3 years leading up to the global financial crisis. Projections assume the government follows through with large
public investments it plans in water management and transport infrastructure during the forecast period.
Private consumption will continue to benefit from a tight labor market and the minimum wage increases, which were
extended throughout the country from January 2013. A study by the Thailand Development Research Institute found
that last years 40% increase in minimum wages in seven provinces did not cause significant layoffs.

Potential Sectors in Thailand


Agriculture, forestry and fishing
Thailand is the world's second-largest exporter of gypsum (after Canada), although government policy limits gypsum
exports to support prices. Thailand produces more than 40 different minerals, with an annual value of about
$740 million.
Industry and manufacturing

39|P a g e

InternationalDivision

The most important subsector of industry is manufacturing, which accounted for 34.5 percent of GDP. Thailand is
becoming a center for automobile manufacturing for the Association of Southeast Asian Nations (ASEAN) market.
Automobile production reached 930,000 units, more than twice as much as in 2001. Toyota and Ford are active in
Thailand, and the expansion of the automotive industry has increased domestic steel production. Thailand's
electronics industry faces competition from Malaysia and Singapore, and its textile industry faces competition from
China and Vietnam.
Energy
Thailand is a net importer of oil and natural gas; however, the government is promoting ethanol to reduce imports of
petroleum and the gasoline additive methyl tertiary butyl ether.
The country's daily oil consumption of 838,000 barrels per day (133,200 m3/d) exceeded its production of 306,000
barrels per day (48,700 m3/d). Thailand's four oil refineries have a combined capacity of 703,100 barrels per day
(111,780 m3/d). The government is considering a regional oil-processing and transportation hub serving south-central
China
Services
The service sector (which includes tourism, banking and finance), contributed 44.7 percent of GDP and employed
37 percent of the workforce. Thailand's service industry is competitive, contributing to its export growth

Tourism
Tourism contributes significantly to the Thai economy, and the industry has benefited from the baht's depreciation
and Thailand's stability Tourism makes a larger contribution to Thailand's economy (typically about six percent of
GDP) than that of any other Asian nation. Tourists come to Thailand for a variety of reasons, primarily for recreation
on its beaches. With ongoing insurgency in the deep south, Bangkok has seen a large increase in tourism in recent
years. An increase in tourism from other Asian countries has contributed to the country's economy, although the baht
has recently strengthened relative to other currencies.

Banking and finance


The government is considering reforms, including an integrated financial regulatory agency which would enable the
Bank of Thailand to focus on monetary policy. In addition, the government is attempting to strengthen the financial
sector through the consolidation of commercial, state- and foreign-owned institutions. The 2004 Financial Sector
Reform Master Plan provides tax breaks to financial institutions engaging in mergers and acquisitions. The reform
program has been deemed successful by outside experts.
40|P a g e

InternationalDivision

INDIA
20 00 N, 77 00 E
Geographic coordinates:
total: 3,287,263 sq km
Area:

country comparison to the world: 7


land: 2,973,193 sq km
water: 314,070 sq km

Total: 14,103 km
Land boundaries:

border countries: Bangladesh 4,053 km, Bhutan 605 km,


Burma 1,463 km, China 3,380 km, Nepal 1,690 km,
Pakistan 2,912 km

$4.761 trillion (2012 est.)


GDP (purchasing power parity):

country comparison to the world: 4


$4.579 trillion (2011 est.)
$4.25 trillion (2010 est.)
note: data are in 2012 US dollars
$1.825 trillion (2012 est.)

GDP (official exchange rate):


6.5% (2012 est.)
GDP - real growth rate:

country comparison to the world: 34


7.7% (2011 est.)
11.2% (2010 est.)

41|P a g e

InternationalDivision

$3,900 (2012 est.)


GDP - per capita (PPP):

country comparison to the world: 168


$3,800 (2011 est.)
$3,600 (2010 est.)
note: data are in 2012 US dollar
agriculture: 17.4%

GDP - composition by sector:

industry: 26.1%
services: 56.5% (2012 est.)

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic
liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced
controls on foreign trade and investment, began in the early 1990s and have served to accelerate the country's
growth, which averaged fewer than 7% per year. India's diverse economy encompasses traditional village farming,
modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than
half of the work force is in agriculture, but services are the major source of economic growth, accounting for nearly
two-thirds of India's output, with less than one-third of its labor force. India has capitalized on its large educated
English-speaking population to become a major exporter of information technology services, business outsourcing
services, and software workers. In late 2012, the Indian Government announced additional reforms and deficit
reduction measures to reverse India's slowdown, including allowing higher levels of foreign participation in direct
investment in the economy.
South Asias largest economy, India, is expected to see growth moderate to 5.8% in 2013 against the earlier
projection of 6.0%. While this is higher than the 5.0% posted in 2012, growth remains constrained by supply-side
bottlenecks, as reflected in the continued slowdown in fixed capital formation, weakness in the industrial sector, and
sluggish progress in pushing through badly needed structural reforms. However, growth in India is expected to
accelerate in 2014 as slower inflation provides some scope for monetary easing that could boost investment and
consumption. Growth will be further boosted by pre-election spending, and the pickup in growth of the United States
economy will support Indian tech companies and related service sectors.

42|P a g e

InternationalDivision

2013
GDP Growth (%)

2012

2014

ADO
2013

Revised

ADO
2013

Revised

India

5.0

6.0

5 .8

6.5

6.5

South Asia

5.0

5.7

5.6

6.2

6.2

Source:; ADB estimates.


With expected declines in commodity prices and decelerating growth, inflationary pressures within developing Asia
will be generally less acute than anticipated in the Asian Development Outlook 2013-. India has bene-fited from a
favorable monsoon that pushed down domestic food prices, such that overall price increases should average 6.5%
this year.

Economic performance
Economic growth in fiscal year 2012 (ended 31 March 2013) decelerated to 5%, its lowest in a decade, from 6.2% in
FY2011. While tepid industrial growth and a downdraft in investment continued from FY2011, the downturn was
exacerbated by a slump in services activity, weakening consumption, and contracting exports.

Potential Sector in India


Infrastructure Roads
India has the second largest road network in the world (3.3 million kilometers). Roads carry about 65% of the freight
and 80% of passenger traffic. Highways / Expressways constitute about 66,000 km (2% of all roads) and carry 40%
of the road traffic. The union Cabinet approved the 12th five year plan that seeks an average annual economic growth
of 8.2 percent and identifies infrastructure, health and education as thrust areas. The Indian Government, via the
National Highway Development Program (NHDP) is planning more the 200 projects representing around 13,000 km
of roads. The average project size is expected to US$ 150 to US$ 200 million. Larger projects are likely to reach the
US$ 700 to US$ 800 million range. 100% FDI under the automatic route is permitted for all road development
projects.
Indian Ports
India has 12 major ports and 187 minor ports along 7,517 km long Indian coastline. Of the 12 major ports, 11 ports
are run by Port Trusts while the port at Ennore is a corporation under the Central Government. Major ports handle
74% of the total traffic.
43|P a g e

InternationalDivision

Two major government projects underway :


1. Project Sethusamundram: Dredging of the Palk Strait in Southern India to facilitate maritime trade through it.
2. Project Sagarmala: US$22 billion project for the modernisation of major and minor ports.
Major ports to operate largely as landlord ports - international port operators have been invited to submit competitive
bids for BOT terminals on a revenue-sharing basis. Significant investment in port terminals on BOT basis by foreign
players include Maersk (Mumbai), Dubai Ports International (Mumbai, Chennai, Vizag and Kochi), and PSA
(Tuticorin, Chennai).100% FDI under the automatic route is permitted for port development projects.

Infrastructure Power
India has the fifth largest electricity generation, coupled with a transmission and distribution network of 6.6 million
circuit kilometers (the third largest in the world). Coal fired plants constitute 54% of the installed generation capacity,
followed by 25% from hydel power, 10% gas based, 3% from nuclear energy and 8% from renewable sources.
It is estimated that India will require an additional 78,000 MW of generation capacity and an additional 60,000 circuit
km of transmission network by 2012. This translates to an investment opportunity of about US$ 200 billion. It is
estimated that the total demand of electricity in India will cross 950,000 MW by 2030. Large demand-supply gap: All
India average energy shortfall of 9% and peak demand shortfall of 14%. Private sector participation possible through
JV and 100% equity mode. 100% FDI permitted in Generation, Transmission & Distribution - the Government is keen
to draw private investment into the sector. Major local players include: National Thermal Power Corporation, National
Hydro Electric Power Corporation, Tata Power, Reliance Energy, and RPG Group CESC.
Alternative Energy and Clean Tech
Alternative Energy and Clean Tech is an important area of possible cooperation between India and Israel. India aims
at becoming a world leader in solar energy, and the target of adding 20,000 MW of solar energy generation capacity
by 2020 has become a high priority.
Civil Aviation and Airports
India has 454 airports and airstrips; of these, 16 are designated international airports. Currently 97 airports are
owned and operated by the Airports Authority of India (AAI). The government aims to attract private investment in
aviation infrastructure. India is the 9th largest aviation market in the world. Passenger traffic is projected to grow at a
CAGR of over 15% in the next 5 years. Vision 2020 envisages creating infrastructure to handle 280 million
passengers by 2020.
44|P a g e

InternationalDivision

Investment opportunities of US$110 billion envisaged up to 2020 with US$80 billion in new aircraft and US$30 billion
in development of airport infrastructure.
Real Estate
Merril Lynch forecasts that the Indian real estate industry will grow to US$ 90 billion by 2015. Demand for housing,
retail and commercial space is driving 30% per year growth in real estate. The projected demand for 370 million
square feet of commercial space, 20 million new housing units and 100,000 hotel rooms and other amenities by 2020
represents an opportunity worth US$ 50 billion. 100% FDI is allowed in real estate development subject to minimum
scale norms of either: 25 acres in case of serviced plots or integrated townships; or 50,000 sq. mtrs of built-up area
for construction development projects. Initial investment is locked-in for a 3 year period. Top local players in the Real
Estate and Construction Industry in India include: Unitech, DLF Ltd, HDIL, and Ansal Properties.
Retail Market
The Indian retail market, which is the fifth largest retail destination globally, has been ranked as the most attractive
emerging market for investment in the retail sector by AT Kearney's eighth annual Global Retail Development Index
(GRDI), in 2009. India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by
2018, at a compound annual growth rate (CAGR) of 10 per cent. The organised retail sector, which currently
accounts for around 5% of the Indian retail market, is all set to witness maximum number of large format malls and
branded retail stores in South India, followed by North, West and the East in the next two years. Number of shopping
malls is expected to increase at a CAGR of more than 18.9 per cent from 2007 to 2015. Top players in the retail
industry include: Future Group, Raheja Group, Tata Group, RPG Retail, and the Birla Group.

IT and IT enabled services


The industry has 3 broad categories of companies:
1. Indian IT and ITeS companies ranging from large companies (Tata Consultancy
to small niche companies.

Services, Infosys, Wipro, HCL)

2. Global IT companies such as IBM, Dell, Microsoft, HP, Accenture, etc. all of whom have set up development
centers in India.
3. Captive back office operations of large global corporations like JP Morgan, American Express, GE, HSBC, British
Airways, etc.

45|P a g e

InternationalDivision

Automobiles
India is the second largest two-wheeler market, the 4th largest commercial vehicle market and the 11th largest
passenger car market in the world. According to the International Yearbook of Industrial Statistics released by United
Nations Industrial Development Organisation (UNIDO), India ranks 12th in the list of the worlds top 15 automakers.
The growth rate for overall domestic sales for 2011-12 was 12.24 percent amounting to 17,376,624 vehicles. In the
month of only March 2012, domestic sales grew at a rate of 10.11 percent as compared to March 2011. Total Two
Wheelers sales registered a growth of 14.16 percent during April-March 2012. During April-March 2012, the industry
exported 2,910,055 automobiles registering a growth of 25.44 percent. Passenger Vehicles registered growth at
14.18 percent in this period. Commercial Vehicles, Three Wheelers and Two Wheelers segments recorded growth of
25.15 percent, 34.41 percent and 27.13 percent respectively during April-March 2012. For the first time in history car
exports crossed half a million in a financial year.

Agriculture (including Water Technologies)


Agriculture in India is a major sector which offers huge opportunities for the foreign investor. India ranks second
worldwide in farm output. India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger,
turmeric and black pepper. It also has the world's largest cattle population (281 million). It is the second largest
producer of wheat, rice, sugar, groundnut and inland fish. It is the third largest producer of tobacco. India accounts for
10% of the world fruit production with first rank in the production of banana and sapota. With a population of over
1.17 billion, India is constantly looking for new and innovative technologies in Irrigation Systems, Greenhouses,
Seeds, Dairy Farms, Poultry Farms, Water Technologies, Fertilizers, and Plant Protection in order to better utilize its
resources.
Healthcare
The Indian healthcare industry is expected to reach US$ 160 billion by 2017. On the back of continuously rising
demand, the hospital services industry is expected to be worth US$ 81.2 billion by 2015. The Indian hospital services
sector generated revenue of over US$ 45 billion in 2012. This revenue is expected to increase at a compound annual
growth rate (CAGR) of 20 per cent during 2012-2017. The Indian healthcare sector which employs around 4 million
people. The large domestic market is complemented by the inflow of medical tourists. The Number of medical tourists
has increased almost 20 folds from 10,000 in year 2000 to about 180,000-200,000 till now.
The industry is fragmented with a large number of independent, privately run hospitals and healthcare centers.
Private sector corporate entities like Apollo Hospitals, Wockhardt Hospitals and Fortis Healthcare have aggressive
expansion plans. 100% FDI is permitted for all health related services under the automatic route.
46|P a g e

InternationalDivision

Medical infrastructure forms the largest portion of the Indian healthcare sector. Beds in excess of 1 million need to be
added in order to reach the ratio of 1.85 per thousand at an investment of US$ 78 billion. The Indian medical
equipment industry is around US$ 2.17 billion and is growing at 15% per year.
Pharmaceuticals
India is now among the top five pharmaceutical emerging markets globally and is a front runner in a wide range of
specialties involving complex drugs' manufacture, development, and technology. The Indian pharmaceutical industry
is a highly knowledge based industry which is growing steadily and plays a major role in the Indian economy. As a
highly organised sector, the number of pharmaceutical companies are increasing their operations in India.
The domestic pharma market has reported total sales of Rs 6,370 crore (US$ 1.03 billion) in the month of May 2013,
registering a growth of 6.8 per cent.
According to some estimates, the Indian pharmaceutical industry is expected to reach US$ 30 billion in 2020. The
Pharmaceuticals industry in India is fragmented with over 3,000 small/medium sized generic pharma manufacturers.
There are about 34 foreign drug companies engaged in the Indian pharmaceutical industry. International
pharmaceuticals majors like Pfizer, Johnson & Johnson, Novartis, and Glaxo SmithKline have established presence
in India. Major local players include Ranbaxy, Dr. Reddys, and Cipla.

Biotechnology and Nanotechnology


The Indian Biotechnology industry which is estimated at around US$ 2.5 billion includes over 700 companies. Some
of these companies already either export to Israel biotechnology related products, utilize Israeli technologies and
cooperate with Israeli Biotechnology and Pharmaceutical companies. International majors like Monsanto, Syngenta
and Aventis are already in India and are focusing on the Bio-agriculture segment. Major opportunities in the
Biotechnology sector in India are in the areas of Bio-informatics, Bio-pharma, Bio-agriculture and Bio-services.
Nanotechnology is one of the main new developing areas recognized by the Indian government in past 5 years. The
Indian Nanotechnology industry which is still in its infancy is estimated at around US$ 200 million and is estimated to
grow at 35% per year.
Home Land Security (HLS)
After 26/11 (the terror attack in Mumbai in 2008), there is an increased awareness in India about home land security
(HLS) needs. India is aware that Israels HLS and Security manufacturers have gained expertise and a worldwide
reputation for developing leading-edge security solutions. The expertise developed by the Israeli companies based
on their experience and know how acquired through decades of combating internal security and terror threats can be
replicated for Indian conditions.
47|P a g e

InternationalDivision

Conclusion
Indian Prime Minister Dr Manmohan Singh said The 21st century belongs to Asia. Asia will be the engine of the
world economic growth. BIMSTEC is an important part of the wider Asian community. It has the potential of playing a
vital role in the Asian community of nations linked by effective road, rail, air and shipping services across which there
would be free movement of people, capital, ideas and goods
Nepal's Deputy Prime Minister Narayan Kaji Shrestha said, "This century may well see economic power shift to Asia
with new powers continuing to grow and making the presence felt in the global arena."
The BIMSTEC agreement aimed to create a free trade zone where tariffs would be brought down to zero by 2014.
Bangladesh and Myanmar, the two least developed countries of the forum given extra time to drop their tariff rates to
zero level by the year 2017. This agreement opens new vistas for economic and commercial links amongst the
member nations. It highlights the necessity of interdependence among member nations in the presently fast
globalized economy of the world. The BIMSTEC would facilitate improvement in the trade at institutional and people
level, most of the member countries are suffering from the menace of corruption, so the trade links at institutional and
private level be positively resulted in enhanced trade links.

48|P a g e

InternationalDivision

ASSOCHAM International Division


The international Division of ASSOCHAM leads business communitys efforts to shape global policy. The division is a
powerful advocate for international economic engagement. The division evaluates newer opportunities for Indian
industry to access newer markets. ASSOCHAM has been taking initiatives to strengthen Indias International
economic relation. The chamber, by providing advisory, consultative and representation services to private sector
and government, has been undertaking activities to consolidate these relations by mounting business delegations,
organizing exhibitions worldwide, hosting delegations and releasing studies regularly on Indias economic relations.
ASSOCHAM has been taking initiatives to strengthen Indias international economic relation. The scope of work in
the international arena has been enlarged to CIS, BIMSTEC, Latin America, ASEAN, SAARC and the neighboring
countries. ASSOCHAM recently mounted business delegations to Kazakhstan, Uzbekistan, Zambia, Malawi, Israel,
Canada, Japan, Mauritius etc. ASSOCHAM organized India Pavillion of Indian exhibitors in International exhibitions.
ASSOCHAM coordinated visits of the delegation coinciding with the visit of Honble President of INDIA to various
countries such as Cyprus, China, UAE, Syria, Mauritius, South Korea, Mongolia, Switzerland, Austria, Seychelles,
South Africa etc.
During the visit of VVIPs to India, in honour of the visiting dignitaries ASSOCHAM jointly with other chambers
organized meetings with VVIPs and the accompanying delegations from different countries. The chamber has also
hosted many business delegations from various countries.

49|P a g e

InternationalDivision

About- ASSOCHAM
THE KNOWLEDGE CHAMBER
Evolution of Value Creator ASSOCHAM initiated its endeavor of value creation for Indian industry in 1920. It has
witnessed upswings as well as upheaval of Indian Economy and contributed significantly by playing a catalytic role in
shaping up the Trade, Commerce and Industrial environment of the country. The Chamber has 300 Chambers as
members and represent over 4, 00,000 large, medium and small scale industrial units.
ASSOCHAM derives its strength from the following Promoter Chambers: Bombay Chamber of Commerce and
Industry, Mumbai; Cochin Chamber of Commerce and Industry, Cochin; Indian Merchant's Chamber, Mumbai; The
Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New Delhi.

VISION
Empower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the barrier less technology
driven global market and help them upscale, align and emerge as formidable player in respective business segment

MISSION
As representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs and interests of its
members. Its mission is to impact the policy and legislative environment so as to foster balanced economic
industrial and social development. We believe education, health, agriculture and environment to be the critical
success factors.

GOALS
To ensure that the voice and concerns of ASSOCHAM are taken note of by policy makers and legislators. To be
proactive on policy initiatives those are in consonance with our mission. To strengthen the network of relationships of
national and international levels/forums. To develop learning organization, sensitive to the development needs and
concerns of its members. To broad-base membership. Knowledge sets the pace for growth by exceeding the
expectation, and blends the wisdom of the old with the needs of the present.

50|P a g e

InternationalDivision

ASSOCHAM REGIONAL OFFICES


ASSOCHAM Southern Regional Office
No. 3524, First Floor, 17th Main
Service Road, HAL 2nd Stage
Indiranagar, Bangalore - 560 008
Mobile: +91-90352 63457
Landline: +91-80-4094 3251-53, Fax: +91-80-4125 6629
E-mail: events.south@assocham.com, events@assocham.com
director.south@assocham.com

ASSOCHAM Western Regional Office


4th Floor, Heritage Tower, B/h, Visnagar Bank, Ashram Road
Usmanpura, Ahmedabad - 380 014
Tel: +91-79-2754 1728/ 29, 2754 1867 Fax: +91-79-3000 6352
Email: assocham.ahd1@assocham.com, assocham.ahd2@assocham.com

ASSOCHAM Eastern Regional Office


88A, 3rd Floor, Sarat Bose Road, Kolkata - 700026
Tel: +91-33-6614 1600/1601 Fax: +91-33-6614 1601
E-mail: kolkata@assocham.com

The Associated Chambers of Commerce and Industry of India


5, Sardar Patel Marg, Chanakyapuri, New Delhi - 110 021
Tel: 011-4655 0555 (Hunting Line) | Fax: 011-23017020
Email: assocham@nic.in | Website: www.assocham.org

51|P a g e