The Indian central Cabinet, chaired by Prime Minister Narendra Modi has provided its approval to create a Project Development Fund (PDF) for catalysing the Indian economic presence in the CLMV countries such as Cambodia, Laos, Myanmar and Vietnam. The PDF will have corpus of Rs 500 Crore and shall be housed in Department of Commerce. It will be operated through the EXIM Bank.
The PDF will be governed by an Inter-Ministerial Committee under the chairpersonship of the Commerce Secretary. It will benefit India’s industrial community for business expansion in the CLMV countries. Besides it will also help to maintain cost competitive supply chains, besides integrating with global production networks.
The CLMV countries namely Cambodia, Laos, Myanmar and Vietnam have a unique position in the regional value chains in Southeast Asia region. These countries offer a gateway for market access to China, European Union (EU) and other markets due to various trade agreements. Thus, creation of PDF will provide key advantage position to India in securing regional value chains on a long term basis. Besides, it will also provide a dedicated market for the Indian raw materials and intermediate goods, with also providing a dedicated source of raw materials for Indian industry.
Importantly, despite plenty of opportunities in the CLMV region, Indian businesses in these countries so far have been constricted due to various factors such as limited information, infrastructure and other contingent risks.