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India-Eurasia Trade Cooperation

India-Eurasia Trade Cooperation. Mohit Singla Chairman, TPCI. Eurasian economy – An Overall Trade & Investment Perspective. EU’s Export to Eurasian region was USD 145 Bn in 2017. China’s Export to Eurasian region was USD 72.2 Bn in 2017. EU’s Investments of 450 Bn.

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India-Eurasia Trade Cooperation

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  1. India-Eurasia Trade Cooperation MohitSingla Chairman, TPCI

  2. Eurasian economy – An Overall Trade & Investment Perspective EU’s Export to Eurasian region was USD 145 Bn in 2017 China’s Export to Eurasian region was USD 72.2 Bn in 2017 EU’s Investments of 450 Bn Outward Direct Investment USD 70.5 Billion 1200+ Firms functional in Eurasian Region (including Russia) 70 + COMPANIES Turkey’s Export to Eurasian was USD 10.3 Bn in 2017 Investment of USD 11.5 Bn 40 + COMPANIES

  3. Eurasian economy : Investments & Trade snapshot India’s export to Eurasia is 2.17 USD Bn EU’s Export to Eurasian region was USD 145 Bn in 2017 China’s Export to Eurasian region was USD 72.2 Bn in 2017 Eurasian exports to India is USD 9.4 Bn EU’s Investments of 450 Bn Outward Direct Investment USD 70.5 Billion India’s Trade Balance with Eurasia is -6.83 USD Bn 1200+ Firms functional in Eurasian Region (including Russia) 70 + COMPANIES Turkey’s Export to Eurasian was USD 10.3 Bn in 2017 Investment of USD 11.5 Bn 40 + COMPANIES

  4. Eurasia’s Import Basket – EU / China / Turkey / India Europe INDIA China 0.6% Turkey Others Share in Eurasia’s Imports

  5. Top 10 Import sectors of Eurasia EU China Turkey India Machinery and Mech Appliances 21% Machinery and Mech Appliances 16.6% Machinery and Mech Appliances 13% Machinery and Mech Appliances 9.7% Automobiles and components 9.7% Automobiles and components 3.6% Automobiles and components 5.1% Automobiles and components 5.7% • Electric Machinery and Equipment 8.1% Electric Machinery 13.8% Electric Machinery 6.6% Electric Machinery 2.4% • Pharmaceuticals 7.7% Iron and Steel 3% Base Metals 2.4% Pharmaceuticals 21.6% Plastics 3.8% Garments 7.1% Iron and Steel 5.8% Iron and Steel 3.3% Chemical Products 2.2% Plastics 3.4% Garments and Fabrics 4.6% Garments 2.1% Cosmetics and Perfumery 2.1% Furniture 2.7% Plastics 6.0% Coffee and Tea 6.5% Medical and Optical Devices 3.1% Footwear 6.5% Furniture 4% Organic Chemicals 6.1% Minerals Fuels and Minerals Oils 2.1% Fur and Skins 4.1% Edible Fruits and Nuts 8.1% Marine 2.9% Toys and Games 2.9% Pearls and Stones 2.8% Meat 2.8% Aircrafts and Spacecraft 2%

  6. EU China Turkey India Potential for india Machinery and Mech Appliances 5.1 Bn 55.8 Bn 6.1 Bn 18.6 Bn 3.2 Bn 25.3 Bn Automobiles and components Electric Machinery India’s potential in most popular Imports 1.9 Bn 899.8 Mn 156.5 Mn 170.5 Mn 483.3 Mn 838.2 Mn 32.4 Bn 3.5 Bn 8.1 Bn Pharmaceuticals Chemical Products Garments and Fabrics Medical and Optical Devices Footwear Fur and Skins Edible Fruits and Nuts 789.1 Mn 580.6Mn 49.8 Mn 620 Mn 1.5 Bn

  7. India's exports to world Imports from world Competitiveness Machinery and Mech Appliances 62686.3 16652.3           37267.4 8800.6 Automobiles and components 30300.7 16226.7 Aircrafts and Spacecraft Electric Machinery 15307.6 12895.5 Edible Fruits and Nuts India’s expertise in most popular Eurasia Imports Pharmaceuticals 5925.6 14465.0 Iron and Steel Chemical Products 19372.9 18357.0 7139.3 2310.8 6141.7 1837.1 Plastics Organic Chemicals 5696.0 3711.3 4900.5 13571.8

  8. Investments scenario in Eurasia - Flow INDIA Europe 0.05% China Turkey Others Share in Eurasia’s FDI Inflow

  9. Top sectors for investment in Eurasia Region EU China Turkey Wholesale Retail and Trade Mining and Quarrying Energy Sector Trade Repair and Motor Vehicles Business Activities Finance Wholesale and retail trade Transport and Storage Manufacturing Financial Activities Construction Textiles and clothing Insurance Activities Hotels and Restaurants Metals and Products Mining and Quarrying Processed food and beverage Real Estate Construction

  10. Perspective of EU, China and Turkey on Eurasia EU economies are exporting high value added technological products to Eurasia, & also investing in High tech manufacturing. China is exporting low value added necessity Products Turkey smartly exports both high value added products and socially accepted/necessity products to Eurasian economies.

  11. India-Eurasia Available Trade Routes Moscow Hamburg Kazhakistan Bosforous Route Beijing Kyrgyzstan Turkey Uzbekistan Hamburg Route New Delhi Chabahar Route (INSTC) Chabahar Port Beijing Dostek Moscow

  12. It’s a hard reality that India will not be competitive enough to trade with Eurasian countries Why?

  13. India is always on the loosing side with Eurasia & The Biggest Factor for keeping it isolated are - 1. Expensive freight 2. Underexploited business opportunities

  14. Acceptability of Indian Products in Eurasian Region We may not be ‘socially analogous’ to Eurasian economies but our trade basket is definitely complimenting The big phenomenon is that “Made in India” tag sells but is not currently selling

  15. Big Reality .. India is a “TRUSTED QUALITY” supplier in Eurasian countries & Easily Ranks above China* in the list of most trusted suppliers * Industrial feedback as received by our trade interactions

  16. Lets look at the total availablePossible Options for bolstering Market Presence !! Proliferating Exports Private Large scale investments Government investments Not a viable option as observed India is not an active ODI player & little government influencing capacity Already active in following the global Trend of investing in natural resources

  17. Our suggestion: Only available option is to instigate: Private SME Investments To manufacture in Eurasian Region to access the local market & utilizing Indian expertise for availing: Market acceptability Market Access Trade Competitiveness • Can we manufacture using the local or imported raw material in cleverly identified SEZ locations to substitute the European & Chinese imports of the Eurasian market and establish an Indian product locally made phenomenon ? • The idea is heavily synergized with the Eurasian policy of import substitution in over 18 sectors & 800 products

  18. Predominant SEZ setups of Eurasian region St. Petersburg SEZ- Russia Travel time through air route from New Delhi : 9 hrs 30 mins (approx.) Tomsk SEZ Tomsk Region- Russia Travel time through air route from New Delhi : 6 Hours approx Zelenograd SEZ- Russia Travel time through air route from New Delhi: 6 hrs 20 mins (approx.) Bishkek SEZ- Kyrgyzstan Travel time through air route from New Delhi : 3 hrs 10 mins (approx.) DubnaSEZ Moscow Region- Russia Travel time through air route from New Delhi : 6 hrs 20 mins (approx.) Tashkent SEZ- Uzbekistan Travel time through air route from New Delhi : 3 hrs (approx.)

  19. All Ingredients for making a SME Success story emerge in force: • Easy accessibility of raw materials • Competitive Logistics • Free Corridor Movements between SEZ’s & Ports • Product price Competitiveness for the local market • Business friendly regulations and tax benefits • Utilization of Manufacturing Expertise • Multiple Market Access – East & West access • Financial security through common economic markets • Adding to GNP of the country & earning foreign exchange

  20. How Government can buttress? DPA model: • Can the government consider an idea of promoting industrial presence of Indian companies in strategic overseas markets by providing shared financial assistance to the investor ? • Can such assistance be considered an activity categorized under the approach of Development partnership Assistance with the partner nations? • The benefits accrued are mutually fruitful in the long term • Aggressive physical presence in local market will be the need of the future business expansion for Indian enterprise.

  21. How Government can buttress? Chabahar model Re-Visited: • Government may not invest in funding foreign infrastructure & logistics but get it for free from the partner countries. • Instead channelize the funding in aiding the industry setups and creating massive Indian industrial presence. • At 2cr average per investor, 250 manufacturing units will emerge in an investment of 500 crores & can add upto 15000 crores of immediate business

  22. Indian made Eurasian Product • Aggressive Branding will add to global enthusiasm, which will further augment the acceptability of “Indian” Products globally. • Countering Chinese aggression- Low cost credit created huge manufacturing bases pumping competitive products vis a vis Indian expertise decentralized in strategic centers and adding value for local business presence. • “Made in Eurasia by India” Kind of concept needs to be promoted through Government Initiatives. • Country-specific special economic zones (SEZs) are not common but given Uzbekistan’s push to its India policy, Tashkent is setting up an SEZ exclusively for Indian companies – Win Win condition for Indian SMEs to capture market share

  23. Thank you

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