New Delhi: With an idea to facilitate manufacturing so that Indian firms create their own value chains, the centre is planning to set up a company to acquire land in CLMV (Cambodia, Laos, Myanmar and Vietnam) countries and create an ecosystem for investment by Indian enterprises in these countries.
The company will essentially be a project development Special Purpose Vehicle (SPV) and while speaking to the English daily Indian Express, a govt official said that the finance ministry is likely to set aside a grant of up to Rs 100 crore in Union Budget 2015-16.
The SPV will invest money to buy land and develop it into Special Economic Zones (SEZs) if proposed by the four countries.It will then allocate plots to Indian producers and thereby recover costs.
According to the newspaper, the SPV will be in the nature of a PPP (public private partnership) initiative. A few large, private sector companies have evinced interest in contributing to the paid up capital of the SPV.
Similarly, Vietnam offers great advantages for India, especially in catering to demand from China. Vietnam enjoys a free trade agreement with China.
"If we create a manufacturing ecosystem for Indian companies in Vietnam, they can tap China and other Trans-Pacific Partnership (TPP) countries like Australia, Japan as well,” the official said.
Indian companies in agriculture, pharmaceutical and textiles sectors, using Vietnam as a base, can export semi-finished products from their Indian units to their factories in Vietnam and complete the manufacturing.
India suffers a large trade deficit with China. In 2013-14, the trade deficit topped $40 billion and is projected to only increase in the coming years. Despite sustained engagement with various Chinese authorities to gain access to markets in sectors including textiles, agriculture and pharmaceuticals, India has not been able to make any significant headway.
Vietnam, Myanmar are keen to get Indian companies. But Indian companies are keen on building scale and want to cater to the global market. So, the government will facilitate this,” an official said.
