India's Chief Economic Advisor, Arvind Subramanian said that India's trade relationship with south east Asian countries wasn't in the immediate future 'overwhelmingly important' compared to that of the United States or Europe. Subramanian was speaking at the first South Asia Economic Conclave in Delhi that saw several economists, technocrats and policy makers discuss ways to improve cooperation among South-East Asian countries.
Subramanian, who was a keynote speaker on panel discussing intra-regional cooperation said that if South East Asian trading nations such as Japan and South Korea were to form a trading bloc and exclude India, the impact on the country wouldn't be severe. " For the foreseeable future, it won't matter much but there is much to be gained in improving political cooperation and security issues," he added. He however clarified that such equations would dramatically change if China were to be part of the group.
Subramanian's comments come even as Prime Minister Narendra Modi wraps up a 4-day tour of the United States with meetings with the top technology companies in Silicon Valley.
Despite the contiguous borders, India's trade with south-east Asian countries is remarkably low. According to the South Asia Monitor, In 2013-2014, India’s trade with SAARC members was 2.6 percent of India’s total trade with the rest of the world. Compared to this, India’s trade with countries further away in terms of distance namely the United States (US) and countries in the European Union (EU) was much larger.
Moreover notwithstanding the low trade it showed no signs of picking up, inspite of India being at the confluence of trade routes connecting SAARC (South Asian Association for Regional Cooperation) countries. Within SAARC, a majority of India’s trade takes place with Bangladesh (33.3 percent), Sri Lanka (26 percent) and Nepal (20.6 percent).
Other dignitaries present at the inaugural averred that key sectors such as power and agriculture were imperative to improve trade among SAARC. Railway minister, Suresh Prabhu, urged the SAARC countries to learn from each other’s strengths in the agriculture sector, as well as adopt cropping patterns that are suited to the agro-climate zones of each of the countries. This would greatly enhance the overall agriculture productivity in the region.
He stressed on the need for deep regional cooperation in energy development, especially renewables like hydropower, wind energy, etc and cited the example of how Bhutan is now exporting hydropower to India in a win-win arrangement. He also urged the governments in South Asia to promote the documentation of traditional knowledge, especially with respect to biodiversity.
Ms Annette Dixon, Vice President – South Asia, The World Bank, stated in her address that closer regional cooperation will not only deliver economic benefits to the people but also help the member states to deal with natural disasters more effectively. Stating that South Asia is today the fastest growing region in the world, Ms Dixon said the SAARC states should find ways to promote intra-regional trade and reduce the cost of doing trade with each other. She pointed out that easier trade in electricity alone will deliver huge economic benefits to the entire region and help cut CO2 emissions.