M i
Moving
Forward
F
d with
ith ASEAN
ASEAN-INDIA
INDIA Connectivity
C
ti it
Financing and Supporting Mechanism:
Views from Exim Bank
November 27,
27, 2013
Bangkok
India – ASEAN Cooperation
Ê ASEAN is the second-largest trade partner of India after EU-27
Ê Closer linkages with ASEAN as part of India
India’s
s ‘Look
Look East Policy
Policy’
Ê India became a member of the ASEAN Regional Forum (ARF) in 1996. The bilateral
cooperation reached a new height when India-ASEAN relationship was upgraded to the
summit level in Nov 2001
Ê In October 2003, a Framework Agreement on Comprehensive Economic Cooperation was
signed between ASEAN and India, covering Free Trade Agreements (FTA) in goods,
services and investment, as well as areas of economic cooperation
ƒ
The agreement for freeing trade in goods has already been implemented with the
ASEAN on January 01, 2010
Ê The India-ASEAN FTA would eliminate tariffs for about 4000 products (which include
electronics,
l t
i
chemicals,
h i l machinery
hi
and
d textiles)
t til ) outt off which
hi h duties
d ti for
f 3200 products
d t will
ill
be reduced by December 2013, while duties on the remaining 800 products will be brought
down to zero or near zero levels by December 2016
Ê India-Malaysia
India Malaysia Comprehensive Economic Cooperation Agreement came into force from
July 01, 2011. This is India’s second bilateral CECA in ASEAN region, after Singapore
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India‐ASEAN Trade Relations
‹
Robust Trends in Bilateral Trade (US$ bn)
India – ASEAN trade flows
Exports
Imports
Ê Rise in total Indo‐ASEAN trade underlined by
buoyancy in both exports and imports
Total Trade
78.9
75.9
56.2
45.3
39.1
43.9
36.7
30.7
30.6
22.7
12.6
18.1 16.4
2006-07
2007-08
26.2
19.1
2008-09
25.8
42.9
42.2
33.0
25.6
2010-11
Ê India’s exports to ASEAN have grown at a
five‐year CAGR of 14.5%, while imports at
15.3%
Ê India’s trade deficit with ASEAN stood at US$
9.9 bn in 2012‐13
18.1
2009-10
Ê India’s trade with ASEAN accounted for a
significant 9.6% of India’s total trade in
2012‐13
2011-12
2012-13
Source: Ministry of Commerce & Industry, Government of India
Ê The India‐ASEAN
India ASEAN FTA is expected to further
provide the necessary impetus for boosting
trade relationship
3
Major Trade Partner in ASEAN Region
‹
Export Partners in ASEAN (US$ mn)
Source: Ministry of Commerce & Industry, Government of India
Import Partners in ASEAN (US$ mn)
4
India‐ASEAN Trade & Investment Opportunities
‹
ASEAN’s importance to India is not only for its large market (combined GDP
size of US$ 2305.5 billion in 2012), but also for their strategic location, in the
close
l
neighborhood
i hb h d off India.
I di
‹
Potential for Investment: Growing infrastructure needs in the ASEAN region,
especially
i ll the
th Mekong
M k
countries
ti
offers
ff
h
huge
potential.
t ti l Greater
G t amountt off
investments are needed in the transport sector, mostly road projects.
Improved infrastructure connecting these economies would help in realization
of the benefits of trade facilitation efforts.
efforts
‹
Border Trade between India and ASEAN, especially the CLMV countries
(through Myanmar) has special significance.
significance Immense potential due to the
geographical continuity with India and Myanmar sharing common border in
the North Eastern Region – with 4 states, namely, Mizoram, Manipur,
Nagaland and Arunachal Pradesh.
Pradesh
5
India‐ASEAN Trade & Investment Opportunities
‹
India’s trade with the Mekong Countries has increased over sevenfold, from US$ 2.1 bn in 2003 to US$ 16.5 bn in 2012. India
India’s
s share in
their global trade, however, was only 2.1% in 2012, which shows the
potential for increasing trade with the region.
‹
Increased trade & investment with ASEAN is of immense importance
from the perspective of India’s international trade and regional
integration.
integration
‹
High potential for enhancing bilateral trade relations. Improved
connectivity and trade facilitation can enhance the same.
same
‹
HOW CAN EXIM BANK SUPPORT?
6
Exim Bank of India
‹
India’s premier Export Finance Institution
‹
Established on 01 January 1982 under the Export-Import Bank of India
Act, 1981 for the purpose of financing, facilitating and promoting
foreign trade in India.
‹
Wholly owned by Government of India
‹
Board of Directors appointed by Government of India; comprises top
officials from key GOI Ministries, RBI, ECGC, commercial banks,
p o ess o a s
professionals
‹
Headquartered in Mumbai, we have 10 Domestic Offices in India and
8 overseas Offices ((Addis Ababa,, Dakar,, Dubai,, Johannesburg,
g,
London, Singapore, Washington and Myanmar).
7
Enhancing India–ASEAN Connectivity: Support Mechanism ‹
South East Asia region has been a focus region for Exim Bank,
Bank and
thus forms a critical component of the Exim Bank’s strategy to
promote and support two-way trade and investment
‹
Exim Bank provides comprehensive range of financing ,advisory and
support programmes to promote and facilitate India’s trade and
investment relations with the ASEAN Countries.
Countries
‹
Exim Bank plays the role of a catalyst for investment in ASEAN region
by extending loans to Indian companies for investment in the region
and entering into various collaborative programmes.
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Financing Programmes
Financing Programmes (Various Currencies)
Export Credit
Medium / Long Term
Lines of
Credit
Supplier’s
Credit
Buyer’s
Credit
Short Term
Pre / Post
Shipment
Credit
Import Credit
Import Loan for
capital goods
Bulk Import Loan
for Raw Materials
Loans for Exporting Units
Term Loans for expansion/
diversification / new projects/
export product development/
export marketing / research &
development
Term Loans for overseas equity
investment
Direct equity stake in Indian/
Overseas ventures of exporting
companies
9
Key Lending Programmes / Support Mechanism
Sovereign Lending Programs
Project Exports Financing
Overseas Investment Finance (OIF)
10
Sovereign Lending Programs
Lines of Credit (LOC) Programme
Ê A Line
Li
off Credit
C dit (LOC) is
i a financing
fi
i
mechanism
h i
through
th
h which
hi h Exim
E i Bank
B k extends
t d supportt for
f
export of projects, equipment, goods and services from India.
Ê LOC extended to Foreign Governments or their nominated agencies such as Central Banks, state
owned commercial banks and para
para-statal
statal organizations.
organizations
Ê LOCs enable buyers in those countries to import developmental
projects, equipment, goods and services from India, on deferred credit terms
and
infrastructural
Ê Credit offered is 100% of Contract Value.
Value Credit tenors could range upto 20 years
Ê LOCs are extended at the behest of Govt. of India and Exim Bank also extends its own LOCs to
regional development banks, overseas financial institutions, commercials banks etc.
Status of LOCs
No. of LOCs operative
:
179
No of countries covered
No.
:
75
Total amount of LOCs sanctioned
:
USD 9.67 billion
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Sovereign Lending Programs
‹
Lines of Credit operative in ASEAN
Borrower
Key Sectors/Projects covered
Cambodia
Electricity transmission line; Water development projects
Lao PDR
Electricity Transmission Line project; Irrigation Project;
Hydropower Projects
M
Myanmar
Railway
R
il
P j t / upgradation
Projects/
d ti
off Yangon-Mandalay
Y
M d l
Railway Systems, upgradation and maintenance of
workshops; Refinery Projects; Manufacturing Plant
Projects; Transmission Line project; Petrochemicals
Vietnam
Hydro Power Project
12
Sovereign Lending Programs
Buyer’s Credit under NEIA
Ê Exim Bank has introduced this product in conjunction with ECGC under GOI’s
p Insurance Account ((NEIA))
National Export
Ê Bank finances and facilitates project exports from India by way of extending
credit facility
y to overseas sovereign
g g
governments and g
government owned
entities for import of goods and services from India on deferred credit terms.
Ê Facility
ac ty to co
cover
e 85% o
of co
contract
t act value.
a ue C
Credit
ed t pe
period
od upto 15
5 yea
years
s may
ay be
considered.
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Exim Bank ‐ Supporting Overseas Projects
‹
Exim Bank plays a pivotal role in promoting & financing overseas projects.
‹
Projects
j
and services, broadlyy categorised
g
into:
Civil engineering
g
g
construction projects, Turnkey projects, Consultancy services, and Supply
contracts on deferred payment terms
‹
Exim Bank extends funded & non-funded
non funded facilities towards financing project
exports from India.
‹
Over the p
past two decades,, increasing
g number of contracts have been
secured by Indian companies in Asia, Sub Saharan Africa, CIS, Latin
America.
‹
Such
S
h projects
j t supplement
l
t the
th efforts
ff t off the
th host
h t country
t governments
t in
i
achieving their developmental objectives.
Projects Under Execution with Exim Bank
Bank’s
s Support (As on March 31,
31 2013)
No. of Contracts
:
293
Value of Contracts
: US$ 21.37 billion
No. of Countries
:
69
No of Indian companies
: 90
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Ongoing Project Exports Contracts: ASEAN
‹
Exim Banks has supported a number of Indian companies, by way of funded
and non-funded facilities for Projects
j
in ASEAN Region.
g
Illustrative list below:
Country
Key Sectors/Projects covered
Cambodia
Electricityy transmission line; Water development
p
p
projects
j
LAO PDR
Electricity Transmission Line project; Irrigation Project; Hydro electric
projects
M l
Malaysia
i
R il
Railway
Project,
P j t Gas
G pipeline,
i li
Telecom
T l
equipment
i
t
Myanmar
Engineering & Construction, Oil & Gas, transmission line, supply of
equipment
Singapore
Offshore drilling rigs, tunnel ventilation & environmental control systems
Thailand
EPC Contract for platform compression facilities, EPC for Gas pipeline
Vietnam
Hydropower project
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Promoting Investment – OIF Programme
‹
Comprehensive assistance
Î Pre investment advisory services
Î Finance through debt and equity
‹
Finance available for:
Î Greenfield projects;
Î Brownfield expansion;
Î Overseas acquisitions directly or through special purpose vehicles
‹
Direct equity participation in Indian ventures abroad.
abroad
‹
Joint investments by Indian and overseas company in third country markets.
‹
As on March 31, 2013, Exim Bank has provided finance to 436 ventures set up by
more than 352 companies in 71 countries.
countries
‹
In ASEAN region, Exim Bank has funded overseas ventures of Indian Companies in
Indonesia, Malaysia, Myanmar, Singapore and Vietnam.
‹
Investments sectors supported include coal mine acquisitions,
acquisitions textiles,
textiles shipping,
shipping
paper, Coffee, carbon black, abrasives, etc.
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Other Support Mechanisms
‹
Institutional Linkages : Exim Bank has a wide network of alliances with
financial institutions and investment p
promotion agencies,
g
market p
promotion
boards and service providers across the globe for assisting externally
oriented Indian companies in their quest for globalization.
‹
Exim Bank as a Consultant: Exim Bank is well positioned to share its
experience and expertise in the fields of capacity creation, institutional
strengthening, export development and export capability creation. The Bank
is thus well p
placed to p
provide a range
g of technical assistance in these fields.
‹
Asian Exim Bank Forum: With a view to enhance cooperation and forge a
stronger link among its member institutions, the first meeting of Asian Credit
Export Agencies (ECAs) was held in India in 1996 at the initiative of Exim
Bank , which led to the formation of the Asian ECA Forum. Members
comprise ECAs from Australia, China, India, Indonesia, Japan, Korea,
Malaysia, Philippines, Thailand and Vietnam. ADB is a permanent
Observer.
17
Other Support Mechanisms
‹
Research Studies: Exim Bank carries out research on areas related to
bilateral trade and investment, sector/product/country
p
y and regional
g
studies, as
also policy issues related to the external sector with a view to enhancing
competitiveness of Indian exporters. The published research studies related
to ASEAN include:
ƒ
ASEAN Countries: A Study of India’s Trade and Investment Potential
ƒ
BIMSTEC Initiative: A Study of India’s Trade and Investment Potential with Select
Asian Countries
ƒ
Enhancing India-Myanmar Trade and Investment Relations: A Brief Analysis
ƒ
India’s Trade and Investment Relations with Cambodia, Lao PDR, Myanmar, Vietnam
(CLMV): Enhancing Economic Cooperation
‹
Representative Offices: Exim Bank has two representative offices in the
ASEAN region - Singapore and Yangon. The representative offices play a
role in facilitating India’s economic cooperation with ASEAN countries
18
Moving
g Forward….
‹
Enhance infrastructure connectivity construction: Connectivity of railways,
roads sea routes,
roads,
routes telecommunication networks,
networks oil & gas pipelines in the
region.
‹
Increased participation of Indian Companies in various Infrastructure
connectivity construction.
‹
Development of roads and railway networks to connect India with ASEAN
countries will provide an avenue for cross-border
cross border trade and expedite economic
development in this region
‹
Increased credit support
pp to connectivity
yp
projects:
j
Explore
p
multilateral financing
g
cooperation mechanisms towards funding gaps, provide direct financing
support, value added services, project feasibility studies, consultancy etc.;
Companies may adopt various approaches including PPP, BOT, etc.
19
Moving
g Forward….
‹
Facilitate Trade and investment cooperation's through mechanisms such as
the Asian Exim Bank Forum. ECAs to build close cooperation
p
through
g jjoint
financing/guaranteeing projects.
‹
Strengthen Knowledge sharing activities amongst ECAs in the region,
information exchange, best practices etc.
‹
Closely work with Multilateral Institutions: Co-financing of Projects / Exim
Bank holds Business Opportunities Seminars with World Bank/ADB to
facilitate and
encourage more Indian companies to actively bid for
multilateral funded projects overseas / Consultancy Assignments
‹
Exim Bank ready to join hands with you towards greater contribution to
connectivity and increase trade & investment with ASEAN.
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THANK YOU
Meghana Joglekar
Resident Representative
Export Import Bank of India
Export-Import
20, Collyer Quay, #10-02,
Singapore 049319
Tel: ((65)) 65326464/5423
Email: meghanajoglekar@eximbankindia.in
Jasmeet Singh Narula
Resident Representative
Export-Import Bank of India
54-A |Ground Floor | Boyarnyunt Street |
Yangon | Myanmar
Tel : +95 1 389520
Email: jasmeet.n@eximbankindia.in
Website
www.eximbankindia.in
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